Expenditures VS Expenses

Expenditures and Expenses are used in a particular sense. Expenditure term is used in case of Non-Profit Organization while Expense Term is used for Business Organizations. Expenses are used for earning Revenue while expenditures are used for acquiring Fixed Assets or Non Current Assets, increasing profits, paying liabilities, Deferred Expenditures like development expenditures, advertisement expenditures, etc.

Expenditure is a wider term while Expense is a narrow term. So Expense is a subset of Expenditure. In other words, Expenditures include those Expenses which are used for the purpose of earning revenues for the business. These Expenditures are called Expenses or Revenue Expenditures.

You my also be interested in

Explain the Difference Between Capital and Revenue Items of Expenditure and Income

Expenditure can be treated as expense or not depends upon the accounting treatments. If we makes expenditure for the purpose of earning revenue and maintaining working capital of the business, then it is treated as Expense or Revenue Expenditure but if we makes expenditure for the purpose of acquiring Fixed Assets or Non Current Assets to use in the business or to increase Profits, paying liabilities,etc., then it is treated as Expenditure or Capital Expenditure but not an expense. Examples are Purchase of Furniture & Equipment, Additions to Furniture or Equipment, etc.

Expenses are incurred for the purpose of earning revenue for the business. Examples are Salaries, Electricity Bills. Day To Day Expenses, etc.