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business expensesComprehensive Analysis
In economics, business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate profit. The etymology of "business" refers to the state of being busy, in the context of the individual as well as the community or society. In other words, to be busy is to be doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the general usage (above), the singular usage to refer to a particular company or corporation, and the generalized usage to refer to a particular market sector, such as "the record business," "the computer business," or "the business community" -- the community of suppliers of goods and services. The singular "business" can be a legally-recognized entity within an economically free society, wherein individuals organize based on expertise and skills to bring about social and technological advancement. In predominantly capitalist economies, businesses are typically formed to earn profit and grow the personal wealth of their owners. Notable exceptions to this rule include many cooperatives, non-profit organizations, and government institutions. In other words, the owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for their work — that is, the expense of time, energy, and money. However, the exact definition of business is disputable as is business philosophy; for example, most Marxists use "means o..." 2) "Expenses" -- As to business expenses1ex·pensePronunciation: ik-'spen(t)s Function: noun Etymology: Middle English, from Anglo-French or Late Latin; Anglo-French, from Late Latin expensa, from Latin, feminine of expensus, past participle of expendere 1 archaic : the act or an instance of expending : EXPENDITURE 2 a : something expended to secure a benefit or bring about a result b : financial burden or outlay : COST <built the monument at their own expense> c : an item of business outlay chargeable against revenue for a specific period 3 : a cause or occasion of expenditure <an estate is a great expense> 4 : a loss, detriment, or embarrassment that results from some action or gain : SACRIFICE <everyone had a good laugh at my expense> -- usually used in the phrase at the expense of <develop a boy's physique at the expense of his intelligence -- Bertrand Russell> Pronunciation Symbols In accounting, an expense represents an event in which an asset is used up or a liability is incurred. In terms of the accounting equation, expenses reduce owners' equity. The official definition of expense used by International Accounting Standards Board is (quotation from IFRS Framework):
One specific use of the term in accounting is whether a particular expenditure is classified as an expense, which is reported immediately to the investing public in the business's income statement; or whether it is classified as a capital expenditure or an expenditure subject to depreciation, which is not. These latter types of expenditures are reported as expenses eventually, but not immediately, by businesses that use accrual-basis accounting, meaning all large businesses. The most common interpretation of whether an expense is of capital or income variety depends upon its term. Viewing an expense as a purchase helps alleviate this distinction. If, soon after the "purchase", that which was expensed holds no value then it is usually identified as an income expense. If it retains value soon and long after the purchase, it will be viewed as capital with life that should be amortized/depreciated and retained on the Balance Sheet. In investing, one controversy that mounted throughout 2002 and 2003 was whether companies should report the granting of stock options to employees as an expense on the income statement, or should not report this at all in the income statement, which is what had previously been the norm.
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