Question: What Is Expenditure Method?

What are the three types of expenditure?

The 3 types of expenses include: fixed, variable and periodic.

Fixed expenses occur in predictable amounts and are usually paid in monthly intervals.

Periodic expenses also occur in predictable amounts and intervals, but are much less frequent (i.e.


What is expenditure with example?

Expenditure definitions The definition of an expenditure is the act of spending money or time and it is something on which you spend money. An example of an expenditure is the money spent on office equipment that you have purchased. … The amount of money, time, etc. expended; expense.

What is expenditure simple words?

An expenditure is money spent on something. Expenditure is often used when people are talking about budgets. It is the government’s job to decide what to do with tax money collected, or in other words, to determine the expenditure of public funds. The word is more than a long way of saying expense.

What is difference between expenditure and expense?

Expenditure will generate future economic benefits for the company, but the expenses will generate the benefit for the current period only. The major difference between Expense vs Expenditure is that the expenditure is a single time investment of money. … Conversely, Expenses are of the shorter term.

What is the formula of expenditure method?

expenditure approach: The total spending on all final goods and services (Consumption goods and services (C) + Gross Investments (I) + Government Purchases (G) + (Exports (X) – Imports (M)) GDP = C + I + G + (X-M). depreciation: The measurement of the decline in value of assets.

What are the 4 major categories of expenditure?

Consumption, investment, government, and net exports make up the four types of expenditures.

What is expenditure in accounting?

An expenditure represents a payment with either cash or credit to purchase goods or services. An expenditure is recorded at a single point in time (the time of purchase), compared to an expense. … To record the occurrence of an expenditure, an accountant must show evidence of the transaction occurring.

What is the total expenditure?

The sum of the price paid for one or more products or services multiplied by the amount of each item purchased.

What is included in autonomous expenditure?

An autonomous expenditure refers to spending that is necessary. You might think all spending is necessary, but in macroeconomic terms, it is expenses that must be made such as for food, shelter, clothing or anything else where the need doesn’t change no matter what your income is.

What is the relationship between price elasticity of demand and total expenditure?

Elasticity is more than One (Ed > 1): When demand is elastic, a fall in the price of a commodity results in increase in total expenditure on it. On the other hand, when price increases, total expenditure decreases. It means, in case of highly elastic demand, price and total expenditure move in the opposite directions.

Is an expenditure an expense?

Expense refers to short-term costs incurred by the company. Whereas, expenditure refers to the long-term costs incurred by the company for its establishment and operations.

Is expenditure an asset?

An expenditure is not necessarily the same as an expense, since an expense represents the reduction in value of an asset, whereas an expenditure simply indicates the procurement of an asset. Thus, an expenditure covers a specific point in time, while an expense may be incurred over a much longer period of time.

What are the examples of government expenditure?

Federal expenditures fall into five main categories: health insurance (Medicaid and Medicare), retirement benefits (Social Security), national defense, interest on the debt and “other spending” (a broad category that covers spending on education, housing, transportation, agriculture, etc.).

What are the sources of expenditure?

Expenditure can include living expenses (e.g. food, clothing, entertainment), accounts (e.g. water, electricity, telephone), fees (e.g. school fees), insurance (e.g. for a car or house), taxes and loan repayments (e.g. to pay off your store account).