What are debit expenses?
Sarah Martinez
Updated on February 16, 2026
Debits: money taken from your account to cover expenses. Liability, expense. Credits: money coming into your account. Asset accounts, equity, revenue.
Why is expense in debit?
Expenses cause owner’s equity to decrease. Since owner’s equity’s normal balance is a credit balance, an expense must be recorded as a debit. (At a corporation, the debit balances in the expense accounts will be closed and transferred to Retained Earnings, which is a stockholders’ equity account.)
What is included in debit?
Debit Balance in Accounting Accounts that normally have a debit balance include assets, expenses, and losses. Examples of these accounts are the cash, accounts receivable, prepaid expenses, fixed assets (asset) account, wages (expense) and loss on sale of assets (loss) account.
Is general expenses debit or credit?
Recording changes in Income Statement Accounts
| Account Type | Normal Balance |
|---|---|
| Liability | CREDIT |
| Equity | CREDIT |
| Revenue | CREDIT |
| Expense | DEBIT |
Where do debits come from in an expense account?
Expense accounts receive their debits mostly from two respective journals. If you are unsure of what this is referring to here, then please read Lesson 3 explaining ledgers and journals. From above, the primary expense in the overhead section (expense types of accounts) is management payroll.
Why do expenses need to be debited at the end of the year?
Since expenses cause a decrease to the owner’s equity credit balance, a debit entry is required. However, at the time that the expense is recorded, the amount is entered as a debit in an expense account. (At the end of the year the debit balances in the expense accounts will be closed/transferred to an owner’s equity capital account.)
Which is the third type of an expense?
The third type of expense is Variable expenses. These are also known as discretionary expenses. While they can be challenging to budget for, this is my favorite category because this is where we have all the control. These are the expenses that we can influence with our behaviors.
Which is an example of an expense account?
Increase (debit) your Checking account and decrease (credit) your Inventory account. Expenses are costs your business incurs during operations. For example, office supplies are considered expenses. Examples of sub-accounts that fall under the expense account category include:
