Expense
In accounting, expense means outflows or using up of assets, or incurrences of liabilities, from delivering goods or services — recognized when incurred, not when paid.
- Layer
- Lexicon
- Defined in
- Lexicon
- Components
- 2
Authority
This definition follows CON 8, Ch. 4, ¶E81.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
The lessons that teach this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
- 03Accounts, and the five typesEvery account belongs to exactly one of five types, and its type decides which side increases it. Get the type right and the entry writes itself.9 min
- 10The income statementTwo of the five account types, arranged so each subtotal answers a different question about how the month went.10 min
Expense, in use
Quoted from the 10 documents that use the word — what it does to an interface, in the spec's own sentence.
An accrual that doesn't reverse double-counts the expense when the real invoice arrives and is coded to expense.
Schedules, accruals & roll-forwards — 3. Accrued liabilities
Derive it from class — asset and expense are debit-normal, liability, equity and revenue are credit-normal — then invert it for contra accounts: accumulated depreciation, allowance for doubtful accounts, treasury stock, sales returns and discounts.
Lopifi APIs: Xero, QuickBooks Online, NetSuite — What actually differs
Travel, expense, and card unified in one flow instead of three products.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Company cards and receipts: coding, matching, reconcilingCompany cards without the month-end receipt chase: how to code card spend, match receipts, handle missing ones and reconcile the card to its statement.
- Payroll journal entries, from gross to netGross wages, employer taxes, withholding and net pay as journal entries: what each payroll run books, how to accrue it at month end, and where benefits go.
- Employee expense reimbursements and accountable plansHow to reimburse employees tax-free under an IRS accountable plan: business purpose, timely receipts, excess returned, mileage and sales tax on receipts.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- cost unqualified
- spend
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
Also in Foundations
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- CapEx vs OpExCapital expenditure buys an asset that will serve for more than a year and is depreciated over that life; an operating expense is consumed in the period and hits the P&L in full immediately.Compare
- Journal entry for credit card expensesFor each company card charge, debit the expense it paid for and credit Credit card payable. When the statement is paid, debit Credit card payable and credit Cash.Entry
- Journal entry for payrollOn payday, debit Wages and salaries for gross pay, credit Cash for net pay and credit liabilities for everything withheld. Book the employer's own taxes separately — debit Payroll tax expense, credit Payroll taxes payable — and clear both payables when they are remitted.Entry
- Journal entry for stock-based compensationEach month of the service period, debit Stock-based compensation expense and credit Additional paid-in capital for the grant-date fair value of the awards divided over the vesting period. No cash moves and no liability is created for equity-classified awards.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.