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2 years ago

Expenses retained earnings; therefore, to increase any expense, one would the expense account.

Business

1 answer:

Liula [17]2 years ago

6 0

Expenses decreases retained earnings; therefore, to increase any expense, one would debit the expense account

What does retained earnings mean?

Retained earnings are profits retained in the business for reinvestment and for expansion purposes, in essence, expenses would reduce the retained earnings, the higher the expenses, the lesser the retained earnings become.

From a double entry point of view, an increase in expenses would be debited to expense account and a decrease is credited instead.

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Expenses ______ retained earnings; therefore, to increase any expense, one would ______ the expense account.

Expenses retained earnings; therefore, to increase any expense, one would the expense account.