Question
Distinguish between cost and expenses.
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S.No.
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Basis
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Cost
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Expenses
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1.
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Meaning
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A cost is a derived value of money consumed to produce a current or future outcome; hence, costs provide management a decision supporting view to improve business economics. Costs are expressed as a value measured in relationship to a causal volume of consumption.
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Technically, an expense is a specific accounting event related to the outflow of cash. Expense simply records the event and is used to understand what happened from an accounting perspective.
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2.
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Costs are derived.
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Expenses are incurred.
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