Expense vs Expenditure

The key difference between Expense vs Expenditure is that Expense refers to the amount spent by the business organization for the ongoing operations of the business in order to ensure the generation of the revenue, whereas, the expenditure refers to the amount spent by the business organization for the purpose of purchasing the fixed assets or for increasing fixed assets value.

Difference Between Expense vs Expenditure

Expense vs. Expenditure – In simple words, expenses are the costs that incur to earn revenues. Whereas, expenditure is the cost spent on purchase or growth of fixed assets.

In this article, we look at Expense vs. Expenditure in detail.

What is the Expense?

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What is Expenditure?

Expense vs. Expenditure Infographics

Here are the top 7 differences between Expense vs. Expenditure

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Expense vs. Expenditure Key Differences

The critical differences between Expense vs. Expenditure are as follows –

Expense vs. Expenditure Head to Head Differences

Now, let’s have a look at the head to head differences between Expense vs. Expenditure.

BasisExpenseExpenditure
Meaning of the termsExpenses are those costs that incur to earn revenues.Expenditure is the cost that is spent on the purchase or growth of fixed assets.
Effect on Financial StatementExpense affects the Profit and Loss statement of a company as they appear as costs incurred to earn revenue.Expenditure does not have any implication on the financial statements and is not usually recorded.
TermAn expense is generally for short-term costs of the organization.Expenditure is usually the long-term costs of the organization.
A number of times suffered.An expense incurs multiple times.Expenditure is incurred once in a period.
Purpose of spendingAn expense is done for general expenses. Expenses are done by an organization so that it can run on a day to day basis.Expenditure is done for Capital and Revenue expenditure. Expenditures are done by an organization to establish it so that it can operate.
ExamplesSalary paid, rent paid, wages, etc. are expenses.Purchase of new land, purchase of new plants for business, etc. are examples.
ExpectationExpenses are high and very frequently expected.Expenditures are not expected in that frequent manner.

Conclusion

Both the terms expense and expenditure, though used widely in the accounting conceptsAccounting ConceptsAccounting concepts are the principles, assumptions, and conditions that govern accounting's foundation. They ensure that the accounting is done in a way that the financial statements present a true and fair view.read more, differ from each other. Expense refers to short-term costs incurred by the company. Whereas, expenditure refers to the long-term costs incurred by the company for its establishment and operations. Both the terms are valuable in the accounting equation since both have specific contributions and meanings. In comparison, expenses have a direct effect on the profit and loss statement of a company and record as the costs incurred to generate revenues. Expenditures do not directly affect the financial statements of the company and are not recorded.

This article has been a guide to Expense vs. Expenditure. Here we discuss the top 9 differences between Expense and Expenditure along with infographics and comparison table. You may also have a look at the following articles –

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