In accounting, an expense refers to any cost that contributes to a company’s overall cost of doing business. That is, any costs incurred as a result of a company’s attempted or successful revenue production. Expenses may include cash, cash equivalents, and depreciation.
Some common examples of expenses include:
- Employee wages
- Rent or property lease
- Utility bills
- Cost of goods sold
Every company faces unavoidable expenses, meaning costs that are necessary to maintain normal business operation. A more general expense definition is any cost an individual or organization incurs within a specified period.