what is difference between cost and expenditure?


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  • Cost means expenditure incurred to manufacture a product or rendering of services. Expenditure means any expenses incurred with a object of earning something in the future.

  • simply in layman's, cost is from seller's perspective n expenditure is from buyer's perspective.

  • ·       Cost is used on something that has returns, while expenses are expenditures used on things that depreciate.
    ·       Cost is reported in the balance sheet because it means more funds will come to the balance sheet after the expenditure. Expense on the other hand, is reported on the income sheet because it will be taking away funds from the income sheet in making the expenditures.
    ·       Cost is used when one is buying assets while expense is used on buying liabilities or things that eventually expire.

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