What are the three basic types of expenses?

• Fixed expenses. Fixed expenses are the easiest to budget for. Because they are fixed, they are easy to predict. ...
• Periodic expenses. Periodic expenses are similar to fixed expenses. ...
• Variable expenses. As the name suggests, variable expenses can fluctuate a lot.

• Location costs. Location expenses are the costs it takes to secure a business location. ...
• Utilities. Utilities include heat, water and electricity. ...
• Telephone and internet. ...
• Business insurance. ...
• Office equipment. ...
• Employee salary and benefits. ...
• Marketing expenses. ...
• Taxes.

• Housing. Whether you own your own home or pay rent, the cost of housing is likely your biggest monthly expense. ...
• Utilities. ...
• Vehicles and transportation costs. ...
• Gas. ...
• Groceries, toiletries and other essential items. ...
• Internet, cable and streaming services. ...
• Cellphone. ...
• Debt payments.

What are the 4 types of expenses?

If the money's going out, it's an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far).

How many types of expenses are there in an income statement?

Expenses: Expenses are the costs that the company has to pay in order to generate revenue. Some examples of common expenses are equipment depreciation, employee wages, and supplier payments. There are two main categories for business expenses: operating and non-operating expenses.

What is the meaning of basic expenses?

Basic living expenses means the cost of basic food, shelter, and any other expenses of the common household.

What are normal expenses in accounting?

Normal Balance

To increase an expense account, it must be debited. To decrease an expense account, it must be credited. The normal expense account balance is a debit. In order to understand why expenses are debited, it is relevant to note the accounting equation, Assets = Liabilities + Equity.

What are examples of personal expenses?

Personal expenses include necessities like laundry, cell phone service, clothing, personal care products, prescriptions, car insurance and registration, recreation, and more.

What are the largest categories of expenses?

What are expenses within a business?

The day to day costs of running a business are categorised into: General • Operating • Capital • Inventory. General expenses are all of the costs incurred in managing a business, while selling expenses include marketing, salaries, supplies, rent, utilities, maintenance, repair, car, fuel and operating expenses.

What are 3 non essential expenses?

For example, expenses such as rent, mortgage, utilities, groceries, or medication are essential ones that you need to pay for living. However, things such as clothes, shoes, makeup, video games, gym membership, and, yes, even the Netflix subscription, are non-essentials. So, essential expenses are, well, essential.

What is the difference between a cost and an expense?

The key difference between Cost and Expense is that cost refers to the amount spent by the business organization to acquire an asset or to create the assets. In contrast, the expense refers to the amount spent by the business organization for the ongoing operations of the business to ensure revenue generation.

What are the two main types of operating expenses?

There are two common categories of expenses that businesses have to pay: fixed and variable costs. Both have a very important role in the normal operations of any company.

What are current expenses?

A current expense is one that usually recurs after a short period. For example, the cost of painting the exterior of a wooden house is a current expense.

Which is not an example of an expense?

Answer and Explanation: The answer is b. Dividends. Dividends are paid from the firm's net income, which is not a business expense.

What income and expenses are?

Income is money that you make and an expense is the money that you spend. In this lesson, you will learn about what your income and expenses are, and how to start making a plan that helps you save money. This video is about 8 minutes long.

What are the three common expense accounts shown on an income statement?

They include the cost of goods sold (COGS); selling, general, and administrative (SG&A) expenses; depreciation or amortization; and research and development (R&D) expenses. Typical items that make up the list are employee wages, sales commissions, and expenses for utilities such as electricity and transportation.

What are monthly expenses called?

° Fixed expenses: Expenses, like bills, that must be paid each month and generally cost the same amount. Some fixed expenses, like a utility bill, may also be variable because the amount changes each month depending on usage. ° Variable expenses: Expenses that change in amount from month to month.

What is the 50 30 20 rule?

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.

What are unnecessary expenses called?

A discretionary expense is a cost that a business or household can survive without, if necessary. Discretionary expenses are often defined as nonessential spending. This means a business or household is still able to maintain itself even if all discretionary consumer spending stops.

What bills are unnecessary?

What is a mandatory expense?

Mandatory spending is simply all spending that does not take place through appropriations legislation. Mandatory spending includes entitlement programs, such as Social Security, Medicare, and required interest spending on the federal debt.

What is the biggest expense of every company?

Labor costs can account for as much as 70% of total business costs; this includes employee wages, benefits, payroll and other related taxes.