Definition of Expense
An expense is a cost that a company incurs, uses up, or has expired.
Examples of Expenses
A few examples of the many expenses that a company incurs when operating a business are:
- Cost of goods sold
- Sales commissions expense
- Delivery expense
- Rent expense
- Salaries expense
- Advertising expense
Definition of Loss
A loss could have several meanings. The following examples illustrate how the term is used.
Examples of Losses
Losses include:
- The sale of a long-lived asset for an amount that is less than the asset’s book value
- An unfavorable settlement of a lawsuit against the company
Loss is also used to describe write-down of inventory from cost to its net realizable value.
Finally, loss is also used to describe the bottom line of an income statement when expenses exceed revenues.
