Which of the following statements is true of expenses?
A)Expenses increase equity,so an expense account's normal balance is a credit balance.
B)Expenses decrease equity,so an expense account's normal balance is a credit balance.
C)Expenses increase equity,so an expense account's normal balance is a debit balance.
D)Expenses decrease equity,so an expense account's normal balance is a debit balance.

Question

Quizplus · Accepted Answer

Expenses decrease equity, so an expense account's normal balance is a debit balance. This means that when an expense is incurred, it is recorded as a debit to the expense account, and the corresponding credit entry is made to either cash if the expense was paid in cash or accounts payable if the expense is to be paid in the future.

Which of the Following Statements Is True of Expenses