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Expanse and expenditure

Expanse and expenditure

In accounting expanse is a cost that have been expired and involve with earning revenue. The expanse is a cost to earn revenue.  Expenditure may be an expanse with certain condition.  Expenditures is a payment and disbursement. The expenditures includes payment,  reduction of liabilities,  distribution.  Expenditure sometimes may be consider as expanse.  Sometimes it may not considered as expanse. 

Expenditures to eliminate or reduce liabilities is not considered as expanse.  On the other hand salaries,  advertisements etc can be consider as expanse. 


Another example can be given when an expenditure turns into expanse.  Purchased equipment by a company is the expenditures. Exactly,  when the equipments are purchased then it is considered as an expenditure. But the equipment is used during six accounting period.  Under the straight line method of depreciation will be happen.  The depreciation during six accounting period may be considered as expanse.

The above example is appropriate to distinguish expanse and expenditure as well as can explain how an expenditure become expanse.


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