In an organization that aims to make money, an expense is any cost incurred as a result of the acquisition of any goods, services, facilities, or other costs. Payroll, bonuses, presents, travel reimbursements, stationery, equipment purchases, tea/coffee costs, dinners, and other expenses are typical in a business. The accounting department uses either the accrual basis or the cash basis to report costs. Companies who comply with IRS (Internal Revenue Service) regulations are able to deduct tax-deductible costs on their ITR.
Most typical categories of costs
- Cost of Goods Sold (COGS)
- Operating Costs
- Non-Prudential Charges
- Financial Outlays
- Extraordinary Costs
- Non-Cash Charges
