Expense
In one sentenceA cost whose benefit was used up during the period to generate revenue or run the business, such as salaries, rent and electricity; it reduces profit.
Simply put
An expense is what has “used up its benefit” in the period: the month's rent, salaries and electricity. It appears in the income statement and is deducted from revenue.
Note the difference between an expense and buying an asset: the price of an air conditioner that serves you for years is an asset to be depreciated, while its routine maintenance is an expense.
Worked example
A service office's operating expenses for one month.
Rent10,000 SAR
Salaries25,000 SAR
Electricity and telecom3,000 SAR
Expenses for the month (10,000 + 25,000 + 3,000)38,000 SAR
Don't confuse it with
AssetSomething whose benefit remains for the future, such as equipment; it is not charged entirely to the period of purchase.
Owner's drawingsWhat the owner takes for personal use; it is not an expense of the business.