What is the normal balance for expense accounts?

Expense accounts typically carry a debit balance because they represent costs that a business incurs in the course of its operations to generate revenue. When expenses are recorded, they increase the overall expenses on the income statement, which is why a debit entry is made to these accounts. A higher balance in expense accounts indicates that more resources have been consumed, which is essential for providing a clear picture of a company’s financial health.

In accounting, each type of account has a normal balance, which is the side (debit or credit) that increases that account. Since assets and expenses normally have debit balances, they increase with debits, which aligns with the fundamental principle that expenses reduce equity. Therefore, recognizing that the normal balance for expense accounts is a debit balance is crucial for accurate financial statement preparation and understanding the flow of transactions in accounting.