yes
True
Which account is not classified as a selling expense?
No, advertising expenses are not considered a liability. Instead, they are categorized as an operating expense on the income statement. Advertising expenses represent the costs incurred to promote a company’s products or services, which are recorded in the period they are incurred. While they do affect cash flow, they do not create a future obligation like liabilities do.
When an expense is incurred but not yet paid, it should be credited to an "Accounts Payable" or "Accrued Expenses" account, reflecting the obligation to pay in the future. The corresponding debit should be recorded in the relevant expense account, such as "Rent Expense" or "Utilities Expense." This ensures that the financial statements accurately represent the company's liabilities and expenses in the period they were incurred.
No. Accumulated depreciation is depreciation accumulated every year and it will only increase and won't decrease. Depreciation expenses is incurred every year.
it is considered as a deferred expense.
An increase in expenses will typically result in a debit entry on the financial statement. This means that the expense account will be debited, reflecting the increase in expenses incurred by the business.
True
Which account is not classified as a selling expense?
No, advertising expenses are not considered a liability. Instead, they are categorized as an operating expense on the income statement. Advertising expenses represent the costs incurred to promote a company’s products or services, which are recorded in the period they are incurred. While they do affect cash flow, they do not create a future obligation like liabilities do.
No. Accumulated depreciation is depreciation accumulated every year and it will only increase and won't decrease. Depreciation expenses is incurred every year.
The expense account will be debited and capital will be credited by the same ammount
interest expense
Selling expense is any type of expense incurred to try to sell an item. Advertising, holding fees, and the purchase price that you paid for the item are all selling expenses.
Yes, as the expense and the corresponding liability accumulate over the period, an adjusting entry is necessary to increase the expense (with a debit) and increase the corresponding liability (with a credit).
A debit to an equity account, or in this case an expense account, will increase the expense account. An increase to this account means the more expenses you have. The more expenses mean the less money you earn and therefore you make less money in your income statement because revenues - expenses = income
A Drawing account is used for withdrawals by owners of the entity. This is commonly used in sole proprietoships and partnerships. The withdrawals are the distribution of the profits to the owners. In corporations dividends declared reduce retained earnings in a similar manner because dividends are distributions of profits to the stockholders. An expense account is used for costs incurred by the entity such as salaries, depreciation, rent, interest, insurance, advertising, and taxes.