Why do expense accounts also have debit balances?

1 answer

Answer

1269715

2026-07-07 16:35

+ Follow

Expense accounts typically have debit balances because they represent costs incurred by a business, which ultimately reduce equity. When expenses are recorded, they are debited, increasing the total expenses on the income statement. This debit balance reflects the outflow of resources, as expenses must be paid to support operations. Thus, a higher expense leads to a higher debit balance, indicating the company's investment in various operational activities.

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.