Definition
Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims.
Three Criteria of Definition
- Decrease in assets or increase in liabilities
- Leading to a decrease in equity
- For reasons other than distributions to the owner
Examples
- Wages
- Rent
- Electricity
- Insurance
Debit and Credit
Increased by a debit, decreased by a credit. Normal balance: debit. See Debit and Credit.