Costs vs Expenses: Understanding the Differences When it comes to managing finances, it is important to understand the difference between costs and expenses. While these terms are often used interchangeably, they have distinct meanings and implications for businesses and individuals. In this article, we will explore the definitions of costs and expenses, their differences, and why it is crucial to differentiate between them. 1. Definition of Costs Costs refer to the monetary value of resources used or consumed in the production or acquisition of goods and services. They are associated with the manufacturing or procurement process of a product or service. Costs can be further classified into two categories: 1.1…