6 Major Types of Accounts in Accounting

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

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.

types_of_accounts_from_the_view_point_of_accounting_equation
Types of accounts from the viewpoint of the accounting equation

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