Expenses

Definition of Expenses as it relates to Business, Accounting Principles, Accounting Standards

"Expenses" in the context of Business, Accounting Principles, and Accounting Standards, refers to the costs incurred in the course of earning revenue. These expenses are reported on a company's income statement and can include items such as salaries, rent, utilities, and supplies. Expenses are recorded when they are incurred, regardless of whether or not cash has changed hands. This is known as the accrual basis of accounting. The matching principle requires that expenses be matched with the revenue they helped to generate in the same period. The accounting standards provide guidelines for how to classify and report expenses, ensuring consistency and comparability between different companies' financial statements.

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