BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Asset accounts normally have debit balances and are debited to increase their balances. Supplies Expense should be debited. Except for special situations (correcting entries, closing entries, and some adjusting entries) expenses are always debited.

Detailed explanation-2: -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).

Detailed explanation-3: -Expenses and Losses are Usually Debited Expenses normally have debit balances that are increased with a debit entry. Since expenses are usually increasing, think “debit” when expenses are incurred. (We credit expenses only to reduce them, adjust them, or to close the expense accounts.)

Detailed explanation-4: -In short, because expenses cause stockholder equity to decrease, they are an accounting debit.

Detailed explanation-5: -Generally, income will always be a CREDIT and expenses will always be a DEBIT – unless you are issuing or receiving a credit note to reduce income or expenses. Let’s look at some examples of typical business transactions and how they might impact your accounts.