Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 29

What is the difference in meaning between the terms cost and expense?

Step 1 of 2

Cost:-

The term “cost” is related to sacrifice of resources. In layman terms, what we are sacrifice to acquire any product or service.

Expense:-

The term “expense” is a cost that is charged against from revenue in an Accounting period. In layman terms, it is just a deduction from revenue in that Accounting period.