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What is a recurring expenditure?

2012-06-22   Views:1

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“Expenditure” is an accounting term. It can be roughly equated to costs, or outgoings. The opposite of expenditure is revenue. Profit is revenue minus expenditure, or, income minus costs. Many accounting terms are easy to understand. Becoming familia

What is a recurring expenditure?

“Expenditure” is an accounting term. It can be roughly equated to costs, or outgoings. The opposite of expenditure is revenue. Profit is revenue minus expenditure, or, income minus costs. Many accounting terms are easy to understand. Becoming familiar with terms like “recurring expenditure” makes dealing with accounts, and following instructions for budgeting a lot easier.

Recurrence

Something that recurs comes back, or repeats. A recurring event is something that happens over and over again. There is an implied regularity in the word and also an implied frequency. Something that happens two or three times at random intervals is not usually referred to as “recurring.”

Definition

“Recurring” means “repeating” and “expenditure” means costs. Therefore “recurring expenditure” means “repeating costs.” These expenses are likely to happen on a weekly or monthly appearance and become a regular feature of each month’s payments.

Examples

Daily life incurs recurring expenditure, which is made up of recurring expenses. For example, anyone who travels to work by public transport is likely to buy some form of periodic pass, like a bus pass or a rail pass. Whether you buy a monthly, quarterly or annual pass, you will have to pay again once the bought period expires. This means that the cost of travel comes back to be paid again - it recurs, and so it is a recurring expense.

Businesses

Most costs come back, but certain costs are categorised as recurring expenses, while others are not. A manufacturer will have to buy materials in order to produce goods to sell. However, the cost of supplies is not classified as an occurring cost, even though the company has to buy supplies again and again. This is because of the implied regularity of recurring expenses. Business recurring expenditure includes things like rent, interest on loans and power. In short, any service that presents an invoice every month for the same service is a recurring expense.

What is a recurring expenditure?

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Category:MoneyRelease time:2012-06-22Views:130

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