Total expenditure

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Total expenditure
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Total expenditure - financial phenomena defined as funds outlay, which may occur in the form of (Kahn A. 2002, s.39):

  • cash turnover derived from checkout,
  • cashless turnover from bank account.

Expenditures might be understood as the use of own funds for materials or products purchase as well as the payment for usage for service of other companies. It should be remembered, that not all of the expenditures make a cost for enterprise i.e. loan repayment. Nevertheless, each cost entail expenditure (Kahn A. 2002, s.39).

Expenditures classification

The expenditures might be divided into (Busatto L.M., 2011, s.7-8):

  • expenditures which not comprise costs – expenditures are not connected with defray of commitment which base forms legal regulation as well as financial or lending activities.
  • expenditures which comprise costs – expenditures destined for defray of commitment arisen via machines and devices serving for production purchase, which during its wear pose a cost.

According to expenditures which comprise costs, we can distinguish following situations in view of time criterion (Shah A. 2005, s.39):

  • expenditure transpire before cost – i.e. materials for production purchase,
  • expenditure transpire after cost – i.e. payment for materials raddled in production,
  • expenditure at the same time as cost – i.e. salaries payment.

Expenditures and cash flow

The next division of expenditures relies on calculation of cash flow. In this group we can distinguish (National Council of Educational Research and Training 2013, s. 247):

  • operational expenditures – i.e. salaries,
  • financial expenditures – i.e. interest rate from bank loan,
  • capital expenditures – i.e. machines purchase.


Author: Justyna Zalewska