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Explain the Accounting for Expenses.

Explain the Accounting for Expenses.

Answers

Expenses involve amounts incurred in furtherance of generating revenue for a business. Expenses are paid out for services rendered other than those paid for purchases. Expenses may include; Electricity bill, Salaries and wages, Bank charges, Motor vehicle expenses, Rent and rates, Telephone bills, Advertising etc.
- Accounting Treatment for Expenses
Debit : Expenses Account
Credit : Cash/ Bank Account or Account Payable

NB:
- Each expense should have an individual account.
- Expenses decrease the capital of a business thus this being the reason as to why they are posted on the debit side of their respective accounts.

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Kavungya answered the question on August 17, 2021 at 07:42

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