Accounting Fundamentals Certification (AFC) Practice Test

An Expense account typically carries a debit balance because expenses represent the costs incurred by a business to generate revenue. In accounting terms, when a business incurs an expense, it is recorded as a debit entry, which increases the expense account. Since expenses decrease the owner's equity (the net worth of the business), they are recorded in a way that necessitates a debit balance.

When accounts are structured within the framework of the accounting equation (Assets = Liabilities + Owner's Equity), any increase in expenses ultimately results in a decrease in owner’s equity. Therefore, following the conventions of double-entry accounting, all expense accounts are designed to maintain a debit balance throughout their activity, making option B the correct choice.

Other options do not align with standard accounting practices. Expense accounts cannot have a credit balance as that would imply income rather than expenses, nor can they accurately be described as having "no balance," which would suggest that no expenses have ever been recorded. A "negative balance" generally implies an overdrawn situation, which is not applicable to expense accounts under typical circumstances.