Explain the Difference Between an Expenditure and an Expense

question 56

Essay

Explain the difference between an expenditure and an expense. 

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Definitions:

FIFO

FIFO (First-In, First-Out) is an inventory cost valuation method assuming that the oldest items of inventory are sold first and newer inventories last, affecting the cost of goods sold and ending inventory valuation.

LIFO

Last In, First Out, an inventory valuation method that assumes goods purchased last are the first to be used or sold, affecting cost of goods sold and inventory value.

Average

A statistical measure that denotes the central value of a set of numbers.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle but measures inventory in dollar amounts rather than in physical units.