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Difference between loss and expense?5 points |
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Answer» If the benefit of an expenditure is exhausted within a year it is called expense whereas excess of expenses of a period over it\'s related revenues is termed as loss Loss is a decrease in net incom that is outside the normal operations of the business.For example, if a person buys some goods fot 1000 rs and due damage in some goods he sells them all to a retailer for 950 rs.An expense is a cost used up in earning revenues in a company\'s main operations. ... Expenses also include costs used up during the accounting period such as interest expense, insurance expense, and depreciation expense.For example a soap company spends money for the advertisement of the product to attract customers and earn profit. \tBasis of\xa0DifferenceLossesExpensesMeaningThe amount that is left after the deduction of total expenses from the total revenue of the particular period.Expenses mean the amount spent by the business for running the business operation. The expenses are also known as Revenue Expenditure.Method of Calculation\xa0“Loss = Revenue – Expenses & losses” (If the amount of Expenses is more)Total the all expensesDependency on Each otherIt is dependent on Expenses. if expenses more then a loss is more and vice versa. It is not dependent on loss.Categories Gross LossOperating LossNet LossDirect Expenses\xa0Indirect ExpensesNeed to calculate\xa0Calculation of the total amount of losses is needed to know the performance of the businessCalculation of the total amount of Expenses is needed to know the profit or losses of the business for a particular period.\t |
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