4. Expense accounts
Expense accounts represent any money that you’ve spent. For instance, if you rent, the money moves from your cash account to the rent expense account. Expense accounts allow you to keep track of money that you no longer have.
Below are more examples of expense accounts to your business may use:
- Cost of sales
- Advertising expense
- Interest expense
- Depreciation expense
- Salaries or wages
- Interest expense
- Depreciation expense
It’s also a good idea to break up expenses into separate accounts. For instance, if you ship a lot of products, you may want to track your costs from different shipping carriers separately. Within each line account, you can create sub-categories for the various expenses associated with each carrier.