GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Expense


Synonyms:cost, expenditure
Filed Under: financial-banking, investments, taxation
Tags: banking, investment, taxes
 

Definition of expense

expense
1. The costs sustained by a company through its business operations in order to produce revenue. As it relates to cash flow, there are three main categories of expenses: operational expenses (ongoing costs from maintenance, office supplies, employee salaries, etc.), capital expenditures (onetime costs from the purchases of assets), and financing expenses (ongoing costs from interest on loans, bonds, and other forms of financing). Businesses try to lower expenses without negatively impacting revenue in order to maximize profit. Also known as an "expenditure."

Related Terms and Acronyms:

  • accounting period (AP)   The time period used in a set of accounting books or financial statements, often 12 months.
  • capital cost allowance (CCA)   Capital Cost Allowance is a method of expensing depreciable assets as defined by the Canadian Income Tax Act (ITA).
  • capital expenditure   The cost of making an improvement to a property.
  • financing expenses   Expenses sustained from interest payments, financing, and dividends to shareholders.
  • loss   When expenses are larger than revenues.
  • moving expenses   Expenses incurred when you moved in connection with your job and are deductible if they are the reasonable costs of moving yourself, your family and your possessions. You can no longer deduct the cost of meals while moving.
  • operating cash flow (OCF)   The money a company generates from its business operations. This revenue excludes costs from certain investments.
  • other income/expenses   Any income or expenses earned or disbursed by a business that are not clearly associated to its core operations.
  • profit   When revenues exceed expenses.
  • solvency   To be able to meet one's financial liabilities in the short or long term.

More Related Terms and Acronyms

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