Expense

An expense is an outflow or consumption of resources incurred to generate revenue.

Expenses include costs such as salaries, rent, utilities, and depreciation, and they reduce profit during the reporting period.

- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.

- Example: Accountants use **Expense** when recording transactions and preparing the trial balance.

- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.