Is an expense account a credit?
Jackson Reed
Updated on February 12, 2026
Expense accounts normally carry a debit balance, so a credit appears as a negative number. If one of the $600 payments is debited to Insurance Expense (or another account) instead of Prepaid Insurance, the monthly adjusting entries will cause the balance in the Prepaid Insurance account to become a credit balance.
Are expense accounts debit?
Expenses normally have debit balances that are increased with a debit entry. Since expenses are usually increasing, think “debit” when expenses are incurred. Examples of expense accounts include Salaries Expense, Wages Expense, Rent Expense, Supplies Expense, and Interest Expense.
Why is an expense account a debit?
In short, because expenses cause stockholder equity to decrease, they are an accounting debit.
What type of account is an expense account?
Expenses accounts are equity accounts with a debit balance. Expense accounts are considered contra equity accounts because their balance decreases the overall equity balance. In other words, debiting an expense account increases the balance instead of decreasing it like most other equity accounts.
What does a credit to an expense account mean?
Definition of expense accounts A debit to an expense account means the business has spent more money on a cost (i.e. increases the expense), and a credit to a liability account means the business has had a cost refunded or reduced (i.e. reduces the expense).
Is insurance expense a debit or credit?
Account Types
| Account | Type | Debit |
|---|---|---|
| INSURANCE EXPENSE | Expense | Increase |
| INSURANCE PAYABLE | Liability | Decrease |
| INTEREST EXPENSE | Expense | Increase |
| INTEREST INCOME | Revenue | Decrease |
Where does a debit and a credit go in an expense account?
Expenses and Losses are Usually Debited. Expenses normally have their account balances on the debit side (left side). A debit increases the balance in an expense account; a credit decreases the balance. Since expenses are usually increasing, think “debit” when expenses are incurred.
Why do expenses need to be debited in accounting?
Liabilities and owner’s equity are on the right side of the accounting equation and the balances in the liability and owner’s equity accounts are normally on the right side of the accounts. Balances on the right side of an account are credit balances. Since expenses cause a decrease to the owner’s equity credit balance, a debit entry is required.
What is the difference between a debit and a credit?
Accounts Receivable is an asset account and is increased with a debit; Service Revenues is increased with a credit. A debit increases the balance in an expense account; a credit decreases the balance.
What’s the difference between a debit and an account receivable?
Accounts Receivable is an asset account and is increased with a debit; Service Revenues is increased with a credit. Confused? Send Feedback Expenses normally have debit balances that are increased with a debit entry. Since expenses are usually increasing, think “debit” when expenses are incurred.
