Representation Expense - entertainment costs for customers, employees and owners. Repairs and Maintenance - cost of repairing and servicing certain assets such as building facilities, machinery, and equipment Rent Expense - cost paid or to be paid to a lessor for the right to use a commercial property such as an office space, a storeroom, a building, etc. Decrease in equity, other than distributions to equity participants - There are only two elements that decrease equity: distributions to owners (i.e., withdrawals or dividends) and expenses.It may also incur in a liability in cases of accrued expenses ( unpaid expenses). Besides cash, the company may also use other assets in paying expenses. When a company incurs an expense, it pays cash thereby decreasing assets. Decrease in assets or increase in liabilities - The decrease in economic benefits mentioned above could be in the form of a decrease in assets or an increase in liabilities.Decrease in benefits during the accounting period - Expenses are measured from period to period, and results in a decrease in economic benefits.Expenses Explainedįrom the technical definition of expense, we can draw the following points: Technically, expenses are "decreases in economic benefits during the accounting period in the form of decreases in assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants". Refer to costs incurred in conducting business.
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