Expenses

July 31, 2017 by Alexa Cleek -

The cost a business incurs during operations in order to generate revenue. In normal circumstances, most of these are cash expenses; examples include wages, payments to vendors, and rent. Other expenses are non-cash, like depreciation, which decreases net revenue, but is not a cash outlay. These are governed by FASB and IRS accounting standards.⁶

Income Statement

Alexa Cleek

Definitioner

Expenses

The cost a business incurs during operations in order to generate revenue. In normal circumstances, most of these are cash expenses; examples include wages, payments to vendors, and rent. Other expenses are non-cash, like depreciation, which decreases net revenue, but is not a cash outlay. These are governed by FASB and IRS accounting standards.⁶

Depreciation

An expense recorded to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases free cash flow while decreasing the amount of a company’s reported earnings.³
This term refers to the gradual loss in value of currency, stocks, and material goods. For example, biotechnology can “depreciate” over the course of 4 years.⁴