4 ms·
On the books...debt/liability is offset with either an asset or "expense". An asset has enduring value, it remains on the books year after year. An expense ho
by racecar789 8y ago
On the books...debt/liability is offset with either an asset or "expense".
An asset has enduring value, it remains on the books year after year.
An expense however, is only on the books for the current year, then it gets rolled into owner equity. Expense shrinks owner equity. In fact, owner equity can go negative in extreme situations.
A portion (I'm not sure how much) of the $250t in debt was certainly spent on expense. There is no way to get that portion back...the funds do not exist.
- fspeech 8y agoAsset and debt are balance sheet quantities. They can be measured at a point in time. Revenues and expenses are flows on the P&L. They are measured over a period of time.