Why expenses goes to debt side instead of credit side?

1 answer

Answer

1104047

2026-03-03 11:45

+ Follow

Expenses are recorded on the debit side of an accounting ledger because they represent a decrease in equity or resources of a business. When an expense is incurred, it reduces the overall profit, which in turn affects retained earnings, a component of equity. In accounting, debits increase expenses and losses, while credits increase revenue and gains, thus maintaining the balance in the accounting equation.

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.