Asked in Business & FinanceAuto Loans and FinancingSmall Business LoansBusiness Accounting and Bookkeeping
Is interest expenses an asset or a liability?
February 27, 2008 3:16AM
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.