Understanding Expenses for Business Owners

The video tutorial explains what an expense is, defining it as the cost of an asset or service used to earn revenue. It emphasizes the importance of recognizing when an expense occurs, which is when the asset or service is used. The tutorial provides examples such as electricity and internet bills as business expenses. It also discusses the timing of expensing items, using the example of stamps, which are only expensed when used. The key takeaway is understanding when to expense items in a business context.

What is the definition of an expense according to the text?

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When does something become an expense?

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Can you provide an example of an expense related to electricity?

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Why are stamps not considered an expense until they are used?

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What is the importance of determining when something needs to be expensed?

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