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Expense management refers to the systems deployed by a business to process, pay, and audit employee-initiated expenses. These costs include, but are not limited to, expenses incurred for travel and entertainment.
These expenses are recorded when incurred, even if the payment will happen later. For instance, a company may receive services in one period but pay for them in the next. The uncertainty surrounding the timing or exact amount of accrued expenses is usually minor compared to provisions, which account for larger uncertainties. [1]
An expense account is the right to reimbursement of money spent by employees for work-related purposes. [1] Some common expense accounts are Cost of sales, utilities expense, discount allowed, cleaning expense, depreciation expense, delivery expense, income tax expense, insurance expense, interest expense, advertising expense, promotion expense, repairs expense, maintenance expense, rent ...
Reimbursement is the act of compensating someone for an out-of-pocket expense by giving them an amount of money equal to what was spent. [1]Companies, governments and nonprofit organizations may compensate their employees or officers for necessary and reasonable expenses; under US [2] [3] law, these expenses may be deducted from taxes by the organization and treated as untaxed income for the ...
The company will not pay these wages until the next Friday of the following month on July 3; to make sure the company's report remains correct an adjustment must be made. Wage Expense $1000.00 Cash $1000.00 Wage Expense $200.00 Accrued Wages Payable $200.00
A deferred expense (also known as a prepaid expense or prepayment) is an asset representing costs that have been paid but not yet recognized as expenses according to the matching principle. For example, when accounting periods are monthly, an 11/12 portion of an annually paid insurance cost is recorded as prepaid expenses .
Such expenses are incurred for output generally and not for particular work order; e.g., wages paid to watch and ward staff, heating and lighting expenses of factory, etc. Overheads are an important cost element, alongside direct materials and direct labor. [2] Overheads are often related to accounting concepts such as fixed costs and indirect ...
Per diem (Latin for "per day" or "for each day") or daily allowance is a specific amount of money that an organization gives an individual, typically an employee, per day to cover living expenses when travelling on the employer's business. A per diem payment can cover part or all of the expenses incurred. For example, it may include an ...