What is expenses incurred

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Disposition Expenses means reasonable out-of-pocket expenses incurred by the Servicer in connection with the sale at auction or other disposition of a Leased Vehicle by the Servicer. Tax Expenses means all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof , which shall be paid or accrued during any Expense Year without regard to any different fiscal year used by such governmental or municipal authority because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof.

Transaction Expenses means any fees or expenses incurred or paid by the Borrower or any of its Subsidiaries in connection with the Transactions, this Agreement and the other Credit Documents and the transactions contemplated hereby and thereby. Allowable Expenses means the Usual and Customary charge for any Medically Necessary, Reasonable, eligible item of expense, at least a portion of which is covered under a plan. When some Other Plan pays first in accordance with Section An incurred expense is a cost that your business owes when receiving goods or services.

Paid expenses are incurred expenses that you have paid for. For example, when you actually pay off the credit card used to buy supplies, the incurred expense becomes a paid expense.

In business, the phrase "incurred expenses" typically refers to costs incurred that have not been paid. If a small-business owner uses his credit card to buy supplies for his company, the amount he puts on the credit card is an incurred expense because he has to pay it back at some point in the future.

Oftentimes, expenses are paid almost immediately after incurring them. Not every transaction requires an immediate exchange of cash for goods and services. Sometimes, especially when there is a prolonged history of ongoing transactions between two parties, formal invoicing and payment requirements can occur after the expense associated with the transaction has been recognized.

For example, assume a reseller receives goods from a supplier that it is able to immediately resell. However, the billing for those goods does not require payment for another month. Since the supplier delivered the goods and the reseller already generated revenues from the sale of those goods, it must recognize the associated expense.

So the associated expense must be listed as a liability to be paid at some point in the future. A deferred expense is an asset that represents a prepayment of future expenses that have not yet been incurred.

Deferred expense is generally associated with service contracts that require payment in advance. The service has not yet been delivered, so the business cannot recognize the expense yet. The provider then delivers on his service each month, requiring the business to recognize the associated expense. Privacy Policy. Skip to main content.

Detailed Review of the Income Statement. Search for:. Expense Recognition. Expense Recognition Expense recognition is an essential element in accounting because it helps define how profitable a business is in an accounting period. Key Takeaways Key Points Expenses are outflows of cash or other assets from a person or company to another entity.

It is important to note that cash or property distributions to a business owner do not count as expenses. Credit cards: Businesses charge expenses on credit to help control the flow of cash out of a company's account.

Setting a monthly date for payment also helps accountants track expenses to create budgets and financial reports. Payroll: The price of labor is considered an incurred expense since an employee performs a service before they are paid. Most businesses pay employees every two weeks. In the time between recurring payments, employee labor is an incurred cost. Rent: Between payments, rent is considered an incurred cost to a business. If companies purchase their own building, a mortgage becomes an incurred expense as well — unless they pay cash.

Materials: Up-front like the materials needed by a company either for production like raw materials like metal or wood used in manufacturing or daily business use like office supplies are considered incurred costs. Manufacturing: Companies incur costs making a product.

This includes the overhead for any machinery used, power and distribution. Companies usually pay these costs once the product is sold. Utilities: The daily costs of phones, the internet, power and air conditioning or heating are all incurred expenses because they are paid on a monthly basis. Loans: Businesses incur expenses when they borrow money. Until the loan is paid off, it will be considered part of this category. The difference between incurred and paid expenses. Why companies pay attention to incurred expenses.

Incurred expenses FAQ. How do you record incurred expenses? Is depreciation considered an incurred expense?