Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

What is the difference between expense and expenditure?

user-image
Question added by Muhammad Irfan Safdar , Chief Accountant , Mimar Projects LLC
Date Posted: 2013/06/23
Musawar Ali
by Musawar Ali , Admin Assistant , Engro Polymers & Chemicals Karachi

 Expense are necessary to meet the day to day business operations and has direct impact over the financial staement of any organisation

Where as Expenditure is a form a expense that occurs when a company purchase new properties and equipments to enhance the production capabilities of a bussines

One major difference is that in expenses no tax is being paid where as in expenditure you have to pay tax.

Arslan Ahmad Bhutta
by Arslan Ahmad Bhutta , Accountant Cum Admin officer , ASSOCIATE CONSULTANT ENGINEERS PVT. LTD

Expenditure: those expenses which are done for the long run and can be en-cashed, though at a loss, when needed, are termed as expenditure.

For example, buying a property is an expenditure, which can be converted into cash again when needed, but at a lower price.

Expenses: the money incurred to meet out the daily and current financial needs of business, generally for short term, and which can't be converted into cash again is called expense.

For example, paying rent for a property is an expense and can't be en-cashed.

manaf almas
by manaf almas , Auditor , DAR AL NUZUM PUBLIC ACCOUNTANTS

expense is the outflow from profit oriented organisation and expenditure is the outflow from non profit organisation

Mohammad Usman akhtar
by Mohammad Usman akhtar , Senior Accountant , GTA Accounting Professional Corporation

An expense is reported on the income statement.
An expense is a cost that has expired, was used up, or was necessary in order to earn the revenues during the time period indicated in the heading of the income statement.
For example, the cost of the goods that were sold during the period are considered to be expenses along with other expenses such as advertising, salaries, interest, commissions, rent, and so on.
An expenditure is a payment or disbursement.
The expenditure may be for the purchase of an asset, a reduction of a liability, a distribution to the owners, or it could be an expense.
For instance, an expenditure to eliminate a liability is not an expense, while expenditures for advertising, salaries, etc.
will likely be recorded immediately as expenses.
Here’s another example to illustrate the difference between an expense and an expenditure.
A company makes an expenditure of $255,500 to purchase equipment.
The expenditure occurs on a single day and the equipment is placed in service.
Assuming the equipment will be used for seven years, the cost of the equipment will be reported as depreciation expense of $100 per day for the next2,555 days (7 years of service with365 days each year).

More Questions Like This

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.