| Expenditure | Expenses | |
| Example | Purchase of goods, purchase of machinery, purchase of furniture etc. | Rent, Salary, Wages, Electricity bill, telephone charges, Deprecation, etc. |
| Meaning | Spending money or incurring a liability for some benefit, service or property received is called EXPENDITURE. | Cost incurred by a business in the process of earning revenue are known as EXPENSES |
| Tenure | Long term and short term both | Short term only |
| Types | Capital Expenditure and Revenue Expenditure | Direct Expense andIndirect Expenses |
| How to identify. | If the benefit of expenditure is exhausted within a year, it is treated as an expense (also called revenue expenditure)On the other hand, the benefit of an expenditure lasts for more than a year, it is treated as an asset (also called capital expenditure) | Expenses are measured by the cost of assets consumed or services used during an accounting period. |
Sarita Chugh M.Com, B.Edan is Accounts and Economics teacher having more than 30+ years of experience. She is Edupreneur and founded Unique Learning Academy in 2004. She believes that every child has the right to affordable education.
