Expenses are amounts paid for resources or merchandise throughout the course of business. Under the cash basis method of accounting, expenses are recorded when making the purchase. Differing from the cash basis method is the accrual basis method of accounting. Under the accrual basis method of accounting, expenses are matched with the revenues required to performed the service or provide the goods, even if cash has not been received.
Expenses will usually have a debit balance.
Expenses can be allocated between operating expenses and non-operating expenses depending on their use.
For more information on debits and credits, see the article “What is a debit and a credit?”
For more information on the cash versus accrual basis method of accounting, see the article “What is the Cash versus Accrual Method?”
To find out what method is right for your business it is smart to consult with an accountant, tax professional, or CPA to further discuss the matter. If you would like to find a professional, please refer to our partner program to find a Crunched Partner nearest you.