Expenses vs. Assets

Expenses are less expensive items or services that a company procures in order to run the business. Expenses are typically used within a relatively short period of time. It directly reduce taxable income in the year they incurred if using the accrual method of accounting, or in the year that they are paid if they using the cash method of accounting.

Examples of business expenses include rent, travel, intertainment, utilities, and office supplies.

Rental expense   5000
     Cash                    5000
 

For an Asset: If you purchase an asset receives the debit and Cash frequently receives the credit as shown below.

Equipment       25000
    Cash                 25000