Expenditure
From Economypedia.com
Expenditure is defined as a payment or a promise of future payment. Alternatively, it is described as actual cash payment or cash-equivalent payment for services and goods against funds available in an obligation settlement. This is attested by an appropriate document like receipt, voucher and invoice. [1] [2]
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[edit] Capital expenditure
It is money that is spent to improve or purchase physical assets like machinery and buildings. This category of expenditure is done by companies to maintain or enlarge their operational scope. Quantum of capital expenditure depends on an industry it operates in. Telecommunication, utility and oil are more capital intensive sectors.
[edit] Advertising sales ratio
It is total advertising expenditure divided by aggregate sale over a period of time. Advertising sales ratio are valuable in determining effectiveness of a company's advertising campaign at sales generation. Lower advertising sales ratio leads to better expenditure.
[edit] Adjusting entry
It is a bookkeeping entry done at end of an accounting period. Adjusting entry assigns expenses and income to a dissimilar period. Entries are made beneath accrual accounting so that it correctly reflects expenditure and income timings. Examples of adjusting entries are accounts payable, amortization and depreciation.
[edit] Capital consumption allowance
It is GDP percentage that is due to depreciation. Capital consumption allowance subtracted from GDP equals net national product. It assesses quantum of expenditure that a country requires to maintain its productivity.
[edit] Deferred charge
It is an expenditure that is regarded as an asset until it becomes crucial to business. For example, prepaid rent is regarded as an asset. This remains until rent becomes officially due.
[edit] Capital rationing
It is restricting new investments of a company. This is done either by setting a ceiling on portions of a capital budget or by utilizing a higher cost of capital when judging merits of probable investments. Capital rationing is usually done when a company has a history of bad returns from investment. [3]
