Saturday, June 21, 2014

Is interest expenses an asset or a liability?

Is interest expenses an asset or a liability?
In accounting, interest and other expenses are neither; they are a contra-equity account. This means that as expenses increase, the owners have less equity.

Expenses should normally be treated as a debit account, so as you record interest expenses, you should be crediting either an asset or a liability at the same time.

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