Project Name
There are five types of accounts in your account list.
Asset accounts (figure 2)
Liabilities Accounts (figure 3)
Equity Accounts (figure 4)
Income Accounts (figure 5)
Expense accounts (figure 6)
The following equation is always true between these account types.
Asset = Liability + Equity + (Income - Expense)
|
Account Type |
Description |
|
Asset Accounts |
Theses accounts track what your company owns. |
|
Liabilities Accounts |
These accounts track what your company owes to other companies. |
|
Equity Accounts |
These accounts track owner's equity. |
|
Income Accounts |
Income accounts track the sources of your income. |
|
Expense Accounts |
Tracks what your company is spending. |
Figure 1: account types
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Account Type |
Description |
|
Bank |
Use bank account to track Bank Checking, and savings. Add one bank account for every account your company has at a bank. |
|
Cash |
Use cash account type to track cashes, for example petty cash. |
|
Accounts Receivable (A/R) |
Use this account to track transactions related to the customers that owe you money, including invoices, payments, deposits of payments, refunds, and credit memos. Most companies have only one A/R account. |
|
Fixed Asset |
Use this account to track depreciable assets your company owns that are not likely to be converted into cash within a year, such as equipment or furniture. |
|
Other Current Asset |
Use this account to track assets that are likely to be converted to cash or used up within one year, such as petty cash, or notes receivable due within a year. |
Figure 2: Asset Accounts
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Account Type |
Description |
|
Accounts Payable (A/P) |
Use this account to track transactions related to money you owe, including bills, bill payments, and any credit you have with vendors. |
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Credit Card |
Use this account to track credit card purchases, bills, and payments. |
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Current Liability |
Use this account to track liabilities that are scheduled to be paid within one year, such as deferred salaries, and short-term loans. |
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Long-Term Liability |
Use this account to track liabilities such as loans or mortgages scheduled to be paid over periods longer than one year. |
Figure 3: Liability Accounts
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Account Type |
Description |
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Equity |
Use this account to track owner's equity, including capital investment, drawings, and retained earnings. |
Figure 4: Equity Accounts
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Account Type |
Description |
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Income |
Use this account to track the main source of money coming into your company. |
|
Other Income |
Use this account to track money received for something other than normal business operations, such as interest income. |
Figure 5: Income Accounts
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Account Type |
Description |
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Expense |
Use this account to track money that is leaving your company. |
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Other Expenses |
Use this account to track money spent on something other than normal business operations. |
|
Cost of Goods Sold (COGS) |
Use this account to track the cost of goods and materials held in inventory and then sold. |
Figure 6: Expense Accounts