What are expenses?

The term egreso comes from the Latin voice left which means exit. In financial terms, expenses are defined as any outflow of money that occurs in a company or society. An output is therefore the output of financial resources in order to meet a payment commitment. But it is also understood by outflow the outflow of money caused by other reasons such as making an investment. The term expenses has its antonym in the word entry.

In an accounting way, we can distinguish various kinds of expenses in a company or commercial company. Fixed expenses, variable expenses and extraordinary expenses.

Types of expenses

Among the expenses we can find:

  • Fixed expenses: This type of expense is not related or linked to the activity or level of production of the company. It remains constant permanently. Within this type of expenses we can include the expenses of Supplies, services and maintenance. Such as electricity, water, telephone, rents, which must be paid regardless of the production that the company has.
  • Variable expenses: Variable expenses are those that depend on the level of production of the company or society. In this type of expenses, the higher the volume of production, the greater the amount of variable expenses. They are, therefore, expenses that are made in order to produce. Here we would include the expenses for materials, packaging materials, or expenses related to salaried personnel that increase as the volume of work in the company increases.
  • Extraordinary expenses: Extraordinary expenses are understood to be expenses that occur in the company in an unforeseen way that do not respond to a greater volume of work or to the usual maintenance of the company. Within this type of expenses we would include fines and penalties or some types of repairs.

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