To contrast cost and expense, consider a purchase of raw materials for cash. Because net assets are unaffected, there is no expense. The firm’s resources are simply converted from cash to materials. The materials are acquired at some cost, but they are not yet an expense. When the firm later sells the output into which the raw materials have been incorporated, the cost of the materials is written off among expenses on the comprehend sive income statement. Every expense is a cost, but not every cost is an expense; assets are costs, for example, but they are not (yet) expenses.