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In accounting expenditure and expenses are similar terms. Expenses like rent, employee wages would come under overhead cost. Direct labour and direct material would come under prime cost. Expenses could be fixed like overhead or variable with production for direct expenses. But they are all expenditure and deductable from total income of the company.
· Personal expenses of the owners cannot be deducted for revenue (total income) but they come under drawings.
· Purchases can be made in cash and credit. For cash purchases Immediate payment has to be made. For CREDIT purchases PAYMENT can be made at a future date.
