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An expense is the term given to those business costs which are day to day running costs such as rent, heat and light, insurance, wages, etc - sometimes known as overheads. Expenses are deducted from gross profit in the the profit and loss account

Drawings is the term given to money withdrawn from the business for the owners personal use - NOT the same as wages however, because the owner is NOT an employee of the business and they can take as much or as little in way of drawings as they wish. Drawings are deducted from the owners capital in the balance sheet

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