Expense

Definition: An expense is a decrease in economic benefits during an accounting period in the form of outflows or depletions of assets or incurrences of liabili…

An expense is a decrease in economic benefits during an accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants. Expenses are recognized under the matching principle: they should be recorded in the same period as the revenues they help generate. Major categories include cost of goods sold, operating expenses (selling, general and administrative), interest expense, and income tax expense. Expenses are increased by debits and decreased by credits.