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  • Difference between Cost and Expense

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    Wasim Ahmed Qadri
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    1. Cost refers to cash outflows that provide some financial benefit, like fuel for pizza delivery. Expense refers to cash outflows with no financial return, like window shopping. 2. The difference is that expenses are costs used up during revenue-generating activities, like paper goods for a catering event. Costs can include expenses and assets not fully used yet, like extra paper goods stored for future events. 3. Expenses are amounts where the economic benefit has been received, like goods sold. Expenditures are amounts where the benefit has not been fully received yet, like machinery purchased for long-term use.

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    DIFFERNECE Expence,Expenditure,Cost

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    1. Cost refers to cash outflows that provide some financial benefit, like fuel for pizza delivery. Expense refers to cash outflows with no financial return, like window shopping. 2. The difference is that expenses are costs used up during revenue-generating activities, like paper goods for a catering event. Costs can include expenses and assets not fully used yet, like extra paper goods stored for future events. 3. Expenses are amounts where the economic benefit has been received, like goods sold. Expenditures are amounts where the benefit has not been fully received yet, like machinery purchased for long-term use.

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    8 views2 pages

    Difference between Cost and Expense

    Uploaded by

    Wasim Ahmed Qadri
    1. Cost refers to cash outflows that provide some financial benefit, like fuel for pizza delivery. Expense refers to cash outflows with no financial return, like window shopping. 2. The difference is that expenses are costs used up during revenue-generating activities, like paper goods for a catering event. Costs can include expenses and assets not fully used yet, like extra paper goods stored for future events. 3. Expenses are amounts where the economic benefit has been received, like goods sold. Expenditures are amounts where the benefit has not been fully received yet, like machinery purchased for long-term use.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 2

    DIFFERENCE BETEEN COST AN EXPENDITURE

    1) Basically both are cash outflow but in case of cost we have some financial
    advantage .Cost is a value of any item

    For instance: Cost will be a cash outflow that may bring you benefit. Gasoline for
    delivering service to a customer by Pizza Hut delivery service.

    2) In case of expenditure there is no financial advantage. Expense to mean a cost that


    has being used up while a company is doing its main revenue-generating activities.

    For instance: Expenditure is a cash outflow that will only cost you money but not giving
    you any feedback, for example: your taxi fare to a shopping mall for window shopping, it
    only cost you money but do not bring you financial benefit

    DIFFERENCE BETWEEN COST & EXPENCE

    3) Expense to mean a cost that has being used up while a company is doing its main
    revenue-generating activities.

    Difference Between Cost And Expense Can Be Better Understand Through


    Following Example

    Let’s say you are running a Catering business and will cater its bigger event this
    evening. So you will purchase 125% paper goods and you believe that this will be used
    in the event, you are purchasing 25% for future events and also to ensure that you don’t
    run out of these items in this evening. Total cost of 125% is $125, only $100 paper
    goods were used in evening’s event. Remaining 25% were put in your store room for
    future events. In this example, cost $125 consist of $100 expense and $25 assets.

    DIFFERENCE BETWEEN EXPENCE & EXPENDITURE

    4) Expenses: These are those amounts the economic benefit of which has already
    taken by the business.

    For instance: 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.
    5) Expenditure: These are those amounts the economic benefit of which has
    not yet completely or partially taken by the business like capital expenditure
    for example machinery purchased

    For Instance: Expenditure to eliminate a liability is not an expense, while


    expenditures for advertising, salaries, etc. will likely be recorded immediately as
    expenses.

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