Creating an Expense Account

An expense is a decrease in equity that comes from the cost of materials and services used to produce income. Examples of expenses are the cost of inventory, loan fees, and insurance.

To create an expense account

1. On the General Ledger menu, select Chart of Accounts. The Chart of Account screen appears.

2. Click Add. The GL Account Edit screen appears.

3. Type the major account number and primary description for the new account.

4. Type the minor account number and secondary description for the new account.

Note: If the minor account number is 0, leave the description blank.

5. In the Type area, select Expense.

6. To define which section of the income statement will include information about the new account, select one of the following:

Administrative
Normal Income/Expense
Other Income/Expense

7. Make sure the Active check box selected.

8. Click OK.