Does an expense decrease owners equity and are recorded as debits?

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1245747

2026-07-22 00:10

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Yes, an expense decreases owner's equity because it reduces the net income of the business, which ultimately impacts retained earnings within equity. Expenses are recorded as debits in accounting, which increases the total expenses on the income statement. This decrease in net income leads to a corresponding decrease in owner's equity on the balance sheet.

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