What is an expense in accounting?

An expense is a type of expenditure that flows through the income statement and is deducted from revenue to arrive at net income. Due to the accrual principle in accounting, expenses are recognized when they are incurred, not necessarily when they are paid for. As the diagram above illustrates, there are several types of expenses.

What is an example of an expense on an income statement?

For instance, if a business were to acquire a printer for $5,000 and pay for it in two weeks’ time, it would be recorded as an expenditure on the income statement today (not when the cash payment is made.) In the income statement, expenses are costs incurred by a business to generate revenue.

What are some common expenses recorded in the income statement?

Some of the common expenses recorded in the income statement include equipment depreciation, employee wages, and supplier payments. Expenditure vs. Expenses: Expenditures denote the amount of money that a business uses to purchase a fixed asset or for increasing fixed asset value.