From the viewpoint of accounting Equation accounts can be divided into five categories: The depiction (explanation, description) about all types of accounts are given in the following:
Table of Contents
Types of accounts
Asset account
The account kept classifying the transactions for which the asset increase or decrease is called an asset account.
Example-Cash, land, prepaid rent, and so on.
Liability account
The account kept classifying the transactions for which the liability increase or decrease is called a liability account.
Example – Accounts payable, notes payable, Unearned Revenue, Bank loan, etc.
Expenditure account
The account kept classifying the transactions for which the liability increase or decrease is called a liability account.
Example– Accounts payable, notes payable, Unearned Revenue, Bank loan, etc.
Expenditure account
The account kept under different heads classifying the various expenditure of a business is called an expenditure account.
Example-Salary account, Purchase account, Wages account.
Income account
The account kept under different heads having the transactions relating to income property is called income account.
Example-Sales, Interest received service Revenue, Commission received, etc.
Owner’s equity account
The account related to ownership claim over the assets of the organization is called the owner’s equity account.
Example: Common share, Stock, Capital, Revenue, Retained earnings, etc.
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