Impact of Accounting Expenses

Accounting Expenses plays a vital role in profitability of any business. To learn any accountancy software, the best practice is to become familiar with the basic of accountancy.If you have not read the basic principles of accountancy, then working on any accounting software, will  put you in a place to seek help from someone! Knowing basic will help you to prepare and understand a balance sheet

Accounting Expenses |Impact on Accounts

Accounting is just a method of recording income and must familiar with the impact of Accounting Expenses to become an expert of Accounts.

Basically, we all are aware that an expense will cut the profit however there is more room to expand our understanding in this regard.

Accounting Expenses

Accounting Expenses will decrease the asset or increase the amount of liability in other words it cut the share of owner’s capital.

For example, an expenses for filling petrol in vehicle, will cut the cash (assets in the balance sheet side) and on the same hand, it will cut the profit of the owner (from the liability side of the balance sheet)

It will be a fun for you to play with various expenses like how the depreciation or a prepaid insurance will affect your balance sheet ?

If you have tried some above example, then post in a balance sheet along with your answer and I will let you know if your assumption and knowledge in this regard is true or false

Accounting Expenses | Final thought

Accounting Expenses not only reflects in the assets or liabilities, Abut it will the credit balance in the Owner Capital account of a sole proprietorship, or will cut the credit balance in the Retained Earnings account of a corporation.

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  1. PRABHU PATIL November 10, 2010
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