Expense Accounts
Q: What is
Expense?
Expenses - refers to the costs incurred in conducting
the firm activities. Normally belongs to the debit balances.
Some common expense accounts:
- · Cost of sales – refers to the value of merchandise sold.
- · Supplies Expense – the amounts of supplies used by the firm during the period.
Example: Used
office supplies, Inks, Ball pen, Pencil, Bond paper, etc.
- · Salaries and Wages Expense- refers to the amount paid to services rendered by the employees in the operation of the firm.
- · Insurance Expense – refers to the amount of insurance policy incurred during the current period.
Example: Premiums
of building insurance, life insurance, plant insurance, etc.
- · Taxes and Licenses Expense – the cost of local as well national taxes that are incurred and required to paid in connection with the conduct of the firm.
Example: Cost to acquire mayor’s permit, registration
cost of the firm, percentage tax on sales etc.
Estimated Expenses
- · Doubtful Accounts Expense –refers to the estimated amount o losses from the uncollectible accounts arising from the credit sales of the current period. May also know as “Bad Debts Expense or Uncollectible accounts Expense”.
- · Depreciation Expense – refers to the current periodic cost for using depreciable plant assets. In accordance with the systematic cost allocation principle, the acquisition cost of depreciable plant asset should be allocated as expense over its useful life.
Walang komento:
Mag-post ng isang Komento