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Diff bet Liability and Expense A/c? [message #210474]

Thu, 21 December 2006 00:15

merlinrajesh
Messages: 105
Registered: November 2006
Location: Chennai

Senior Member

Dear Oracle Application Gurus,

What is the functional difference bet Liability Account and Expense Account?

Thanks & Regards
Merlin Rajesh

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Re: Diff bet Liability and Expense A/c? [message #210488 is a reply to message #210474]

Thu, 21 December 2006 01:29

RAJESH.GANESUNI
Messages: 19
Registered: December 2006
Location: HYDERABAD

Junior Member

Hi Rajesh,

Liability Account is a Balance Sheet Account - Balance is carry forward to the next Year,where as
Expense is Profit & Loss Account - Balance will be (should) Zero for the next year.

Best Regards

Rajesh.g

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Re: Diff bet Liability and Expense A/c? [message #210495 is a reply to message #210488]

Thu, 21 December 2006 01:56

merlinrajesh
Messages: 105
Registered: November 2006
Location: Chennai

Senior Member

Dear Rajesh,

Thanks for your reply...

Merlin Rajesh

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Re: Diff bet Liability and Expense A/c? [message #210671 is a reply to message #210474]

Thu, 21 December 2006 13:18

David.K.Dickson
Messages: 413
Registered: October 2005
Location: Surrey, England

Senior Member

A Liability is something that the business owes; e.g. if we take out a loan from the bank, we would record that as a Liability. The Liability stays in place until the loan is repaid, so at year end a Liability Account carries forward its balance into the new financial year.

An Expense is money paid out by the business for goods or services that will be consumed in the current financial year, e.g. goods purchased for resale, or salaries, or rent of premises. Since an Expense relates to the current year, at the year end an Expense Account does not carry forward its balance into the new financial year.

Cool

HTH

David

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Re: Diff bet Liability and Expense A/c? [message #210706 is a reply to message #210671]

Thu, 21 December 2006 21:50

merlinrajesh
Messages: 105
Registered: November 2006
Location: Chennai

Senior Member

Thanks David for you detailed reply...

Merlin Rajesh

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