Types of accounts from the view point of accounting equation

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:

Types of accounts

  1. Asset account: The account kept classifying the transactions for which the asset increase or decrease is called asset account. Example-Cash, land, prepaid rent and so on.
  2. Liability account: The account kept classifying the transactions for which the liability increase or decrease is called liability account. Example – Accounts payable, Notes payable, Unearned Revenue, Bank loan etc.
  3. Expenditure account: The account kept classifying the transactions for which the liability increase or decrease is called liability account. Example- Accounts payable, Notes payable, Unearned Revenue, Bank loan etc.
  4. Expenditure account: The account kept under different heads classifying the various expenditure of a business is called expenditure account. Example-Salary account, Purchase account, Wages account.
  5. Income account: The account kept under different heads having the transactions relating to income property, are called income account. Example-Sales, Interest received service Revenue, Commission received etc.
  6. Owner’s equity account: The account related with ownership claim over the assets of the organization is called owner’s equity account. Common share, Stock, Capital, Revenue, Retained earnings etc.
types_of_accounts_from_the_view_point_of_accounting_equation

Types of accounts from the viewpoint of accounting equation

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