Expenses

Expenses are one of the five financial statement elements.

The characteristic of expenses is that they represent activities that ‘use up’ or ‘sacrifice’ value. Students commonly confuse the expense activity (e.g. cleaning) with the expenditure (e.g. using up cash). In accounting, these are entirely different concepts.

The nature of expenses

Expenses are a perfect illustration of how accounting uses common language in specific and uncommon ways. …Read more

Interior of engineering works at London and North Western Railway, Crewe, Cheshire

The nature of depreciation

Paul Jennings gives some tips on how to explain the nature of depreciation. …Read more