Which account is an Expense?

• A. Wages Expense
• B. Supplies
• C. Cash
• D. Fees Earned

Answer: (A)

In accounting, an expense is a cost that the business incurs to earn revenue, and it reduces net income on the income statement. Expense accounts are used to record the costs of operating activities, and they are typically debited when the cost is incurred.

Wages Expense specifically tracks the cost of employee labor. It represents money the company has spent or owes for wages, and when wages are incurred, you would debit Wages Expense (increasing the expense) and credit Cash or Wages Payable (depending on whether you’ve paid them yet or owe them).

The other options are not expense accounts: Supplies is an asset account representing items on hand to be used in operations (it would become an expense later as Supplies are consumed, often labeled as Supplies Expense when adjusting). Cash is also an asset account, reflecting money on hand or in the bank. Fees Earned is a revenue account, representing income earned from services.

So, the account that is an Expense is Wages Expense.