Difference Between Loss and Expense

Differences between Loss and Expense

The term of Loss and expenses are opposite to each other But normally these terms are used interchangeably, which is wrong. So, to know the Difference Between Loss and Expense, First of all, we have to clear the meaning of both terms. These are explained below: 

The Content covered in this article: –

  1. Meaning of Loss
  2. Meaning of Expenses
  3. Chart of Differences
  4. Download links of format jpg and pdf
  5. Conclusion

Meaning of Loss: –

The is that amount which is left after deduction of total expenses from the total revenue of the particular period. The losses can be subcategories in three types shown as following: 

  1. Gross Loss 
  2. Operating Loss 
  3. Net Loss 

The formula of Calculation of Profit Or loss: –

After calculation with the formula, we got values in negative then it will be known as a loss:-

“Gross Profit/Loss =  Total Sales – COGS”

“Operating Profit/Loss =  Gross Profit/Loss – Operating Expenses”

“Net Profit/Loss = Operating Profit/Loss – Interest – Taxes”

Examples: –

The total amount of Sale is Rs 10,00,000, COGS is Rs 6,00,000 and Operating Expenses is Rs 4,50,000,Interest on Loan Rs 20,000 in last taxes is Rs 30,000. Now calculate the amount of Gross Profit/ Loss

The formula of Calculation of Revenue: –

“Gross Profit/Loss =  Total Sales – COGS”
= 10,00,000 – 6,00,000
Gross Profit = 4,00,000

“Operating Profit/Loss =  Gross Profit/Loss – Operating Expenses”
= 4,00,000 – 4,50,000
Operating Loss = – 50,000/-

“Net Profit/Loss = Operating Profit/Loss – Interest – Taxes”
=-50,000 – 20,000 – 30,000
Net Loss = -1,00,000/-

Meaning of Expenses: –

Expenses mean the amount spent by the business for running the business operation. The expenses are also known as Revenue Expenditure. In other words, The amount spends on running the process of production and purchase of goods. The Expenses can be divided into two subcategories, these are shown as following: 

  1. Direct Expenses
  2. Indirect Expenses

Details amount Expenses Please check out from the following Link:

What are Expenses – its types and examples

Chart of Difference between Losses and Expenses: –

Basis of Difference

Losses

Expenses

Meaning

The is that amount which is left after deduction of total expenses from the total revenue of the particular period. Expenses mean the amount spent by the business for running the business operation. The expenses are also known as Revenue Expenditure.

Method of Calculation 

“Loss =  Revenue – Expenses & losses”
(If the amount of Expenses is more)
Total the all expenses

Dependency on Each other

It is dependent on Expenses. if expenses more then a loss is more and vice versa.   It is not dependent on loss.

Categories  

  1. Gross Loss
  2. Operating Loss
  3. Net Loss
  1. Direct Expenses 
  2. Indirect Expenses

Need to calculate 

Calculation of the total amount of losses is needed to know the performance of the business Calculation of the total amount of Expenses is needed to know the profit or losses of the business for a particular period.

Download the chart:

If you want to download the chart please download the following image and PDF file

Chart of Difference Between Loss and Expense 283x300 - Difference Between Loss and Expense
Chart of Difference Between Loss and Expense
application pdf - Difference Between Loss and Expense
Chart of Difference between Loss and Expense

 

The conclusion of the Difference: –

The Loss of any particular period depends on low revenue and high expenses. If revenue gets by the business is less then it expenses during the particular period then this amount will be known as loss. 

Thanks for reading the topic of Difference between Loss and Expense, 

please comment your feedback whatever you want. If you have any question please ask us by commenting. 

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