An expense is reported on the income statement.

An expense is a cost that has expired, was used up, or was

necessary in order to earn the revenues during the time period indicated in the heading of the income statement. For
example, the cost of the goods that were sold during the period are considered to be expenses along with other
expenses such as advertising, salaries, interest, commissions, rent, and so on.

An expenditure is a payment or disbursement. The expenditure may be for the purchase of an asset, a reduction of a
liability, a distribution to the owners, or it could be an expense. For instance, an expenditure to eliminate a liability is
not an expense, while expenditures for advertising, salaries, etc. will likely be recorded immediately as expenses