An expense:
A)will decrease the amount of net income on the income statement.
B)will decrease the amount of contributed capital on the balance sheet.
C)will be increased with a credit to the account.
D)normally has a credit balance.

Question

Quizplus · Accepted Answer

An expense is a cost incurred by a business to generate revenue. It will decrease the amount of net income on the income statement, as it represents a reduction in revenue or an increase in expenses. Expenses are normally debited, not credited, and have a debit balance. Therefore, option C and D are incorrect. Option B is also incorrect as contributed capital is a part of the equity section of the balance sheet, and is not affected by expenses.

An Expense