Expenses are recorded as debit entries because they reduce equity.

Hi, 

Yes, it is true that expenses are recorded as debit entries, and here's why:

In accounting, the concepts of debit and credit are used to record transactions in the double-entry bookkeeping system. Every financial transaction involves both a debit and a credit, and these are recorded in different accounts depending on the nature of the transaction.

Debit (Dr): An entry on the left side of an account. It generally represents an increase in assets or a decrease in liabilities and equity.
Credit (Cr): An entry on the right side of an account. It typically represents an increase in liabilities or equity and a decrease in assets.

Why Expenses are Debited:
When you incur an expense, it decreases your equity. In accounting terms, equity represents the residual value of assets minus liabilities (the owner's interest in the business). Since expenses reduce equity (because they lower the net income), they are debited to the expense account.

Example:
Let’s say your company pays $500 for utilities:

Expense account (Utilities) will be debited by $500 (since expenses reduce equity).
The cash account will be credited by $500 (since cash is an asset, and paying the utility bill decreases cash).

In a typical profit-and-loss statement (income statement), debiting expenses increases their value, and the net effect is that profits (or equity) decrease because the business spent money.

To Summarize:
Expenses are debited because they reduce equity (and thus reduce the net income).
Revenues are credited because they increase equity.
This is a foundational concept in accounting, ensuring that each transaction maintains the balance of the accounting equation:
Assets = Liabilities + Equity.

 I hope this helps. 

Best, 
365 Team