Finance - Module 3 - Expenses

expense

Any cost incurred by a business or organization for its operations, including purchases, services, salaries, and utilities.

Operating Expense:

Day-to-day expenses required for running a business, excluding the costs related to production (such as rent, utilities, and salaries).

Capital Expense (CapEx):

Funds used to acquire, upgrade, or maintain physical assets such as property, buildings, or equipment. These are long-term investments.

Salary Expense:

The cost of wages paid to employees, typically expressed as a fixed annual amount for salaried staff.

Benefits Expense:

The cost incurred by a company to provide employee benefits such as health insurance, retirement plans, paid leave, and other perks.

Supply Expense:

The cost of materials, supplies, and consumables necessary for operations, such as office supplies or medical equipment.

Purchase Service Expense:

The cost incurred for services outsourced to external vendors, like cleaning, consulting, IT support, or maintenance.

Utilities Expense:

The cost for essential services such as electricity, water, gas, and internet required to operate a business.

Rent Expense:

The cost of leasing property or equipment used for the organization's operations.

Depreciation Expense:

A non-cash expense that represents the reduction in value of a company's assets over time, such as equipment or buildings.

Exempt Employee:

An employee who is not entitled to overtime pay under the Fair Labor Standards Act (FLSA) due to their role, typically salaried employees in managerial, professional, or administrative roles.