Expense

Expenses are a fundamental part of financial management, representing the money spent on goods, services, or obligations. They are essential for running a business or managing personal finances.

Expenses can be broadly classified into:

• Fixed Expenses: Costs that remain constant (e.g., rent, salary)
• Variable Expenses: Costs that change with usage or activity (e.g., electricity, raw materials)
• Operating Expenses: Day-to-day business costs (e.g., marketing, utilities)
• Capital Expenses: Long-term investments (e.g., machinery, equipment)

In accounting, expenses are deducted from revenue to calculate profit:
Profit = Revenue − Expenses

Managing expenses effectively helps improve savings, increase profitability, and maintain financial stability.

"A business spends ₹50,000 on rent, ₹20,000 on salaries, and ₹10,000 on utilities. These are all expenses that reduce its overall profit."