Types Of Accounts
Bookkeeping Major Types Of Accounts
The major types of accounts are assets, liabilities, owner's equity, revenue, expenses, and draws/dividends.
Asset Accounts: These accounts represent resources owned by the business. Examples include cash, accounts receivable, inventory, and property.
Liability Accounts: These accounts reflect obligations or debts owed by the business. Examples include loans, accounts payable, and accrued expenses.
Equity Accounts: Equity accounts capture the owner’s interest in the business. They include capital contributions, retained earnings, and dividends/draws.
Expense Accounts: These accounts track operating costs and expenditures incurred by the business. Examples include salaries, rent, utilities, and supplies.
Revenue Accounts: Revenue accounts record income generated by the business. Sales, service fees, interest income, and other revenue sources fall into this category.
Liability Accounts: These accounts reflect obligations or debts owed by the business. Examples include loans, accounts payable, and accrued expenses.
Equity Accounts: Equity accounts capture the owner’s interest in the business. They include capital contributions, retained earnings, and dividends/draws.
Expense Accounts: These accounts track operating costs and expenditures incurred by the business. Examples include salaries, rent, utilities, and supplies.
Revenue Accounts: Revenue accounts record income generated by the business. Sales, service fees, interest income, and other revenue sources fall into this category.
Draws/Dividends: These accounts track owner withdrawals from the business.
These acronyms provide easy methods for remembering the types of accounts.
Accounts Quiz