Expense Accounts are offset accounts which track how monies were spent. In dual entry bookkeeping, as with income accounts, this means that when $50 dollars comes out of the checking account for water bill, you would also have a $50 entry on your “Utilities” expense account to track where that money went.
These expenses usually include categories such as salaries, materials for church programs, office supplies, postage and utilities. Purchases of assets, such as property or equipment, generally are not considered expenses because you are converting a cash asset into a physical asset without really changing your net worth.
Similar to income, since expense accounts track the money being spent by the church, you can create budgets for these accounts making it easier to plan spending and projects. For instructions on adding budgets see the chapter called “Ledger, Actuals, and Budgets.”
- The expense accounts can be found in the Accounts grid.
- Access the accounts grid by going to “Accounts” in the menu bar, choosing Account Types, and the selecting “Expense.”
- You can also click on the “A” in the toolbar and change the account type filter at the bottom to “Expense.”
- To add an expense account, click the Add button.
- Type in the name of this account. There is no beginning balance for expense accounts since these accounts are designed to track expense leaving the software.
- Now choose or add the grouping categories you want. If you don’t choose to group this expense account, you will still need to pick a sequence number.
- When you are finished, click OK to save the account.