Editing Expense (section)

==Cash flow==
In a [[cash flow statement]] (flow of funds statement), expenditures are divided into three categories:

* Operating: [[Operating expense|Operational expense]] – salary for employees
* Investing: [[Capital expenditure]] – buying equipment
* Expenditures (financial) [[corporate finance|Financing expense]] – [[interest expense]] for [[loans]] and [[Bond (finance)|bonds]]

Whether a particular expenditure is classified as an expense, which is reported immediately on the business's [[income statement]] or whether it is classified as a [[capital expenditure]] (or an expenditure subject to [[depreciation]]), which is not an expense flow of funds statement. Though, these latter types of expenditures are reported as expenses when they are depreciated by businesses that use [[Cash-basis versus accrual-basis accounting|accrual-basis accounting]]- as most large businesses and all [[C corporation]]s do.

Defining an expense as capital or income using the most common interpretation depends upon its term.

When an expense is seen as a purchase, it alleviates this distinction. Soon after the purchase (that which was expenses holds no value), it is usually identified as an expense. It will be viewed as capital with life that should be [[Amortization (business)|amortized]]/[[depreciation|depreciated]] and retained on the balance sheet if it retains value soon and long after the purchase.