We use these terms in the process of categorizing transactions and writing journal entries in a general ledger. Likewise when a business pays cash from its bank account it will credit cash in its accounting records (the reduction of an asset). L E R accounts are liabilities, equity, and revenues. Want better bookkeeping? For example, Cost of Goods Sold is an expense caused by Sales. Insurance Expense, Wages Expense, Advertising Expense, Interest Expense are expenses matched with the period of […]