Expenses and liabilities should not be confused with each other. One appears on a company's balance sheet and the other appears on the company's income statement. Expenses are the costs of operating a business, while liabilities are the obligations and debts a business owes. While expenses and liabilities may seem like interchangeable terms, they are not.
Expenses are what the company pays monthly to finance operations. Liabilities, on the other hand, are obligations and debts contracted with third parties. First, expenses are not liabilities. They have different characteristics and reside in different financial statements.
No, expenses are not assets, liabilities, or net worth. Expenses are shown in the income statement to offset income, while assets, liabilities and equity are shown in the balance sheet. The liabilities on the balance sheet usually offset the assets; that is, the% of the assets and the liability plus the capital. Accumulated expenses increase if you created a backlog of expenses, or accounts payable increase if you have recorded a vendor bill that has not yet been paid.
