BasisAcc (types of major accounts)

assets

are the resources owned and controlled by the firm

liabilities

are obligations or debts of the firm arising from past events which are to be settled in the future

equity or owner’s equity

are the owner’s claims in the business, it is the residual interest in the assets of the enterprise after deducting all liabilites, it is the synonym of investment

income

is a general term to mean any earning made by the business

service income

refers to earnings derived from services rendered whether on cash or in account

fees

is another general term used to designate income

legal fees

is income derived from rendering legal services, medical fees, accounting fees, dental fees and other terms may be used to denote income from particular type of professional services

sales

is a term denote income derived from the sales of goods

commission income

is an income account to designate earnings received from selling anything on a commission basis

other income

is another income account to designate earnings received from sources than its main source of income

expenses

what the business spends for its continuous operation in order to render the service or produce the goods, they are usually monthly expenditures such as rent, salaries, utilities, depreciation, advertising, supplies, insurance

chart of accounts

is a list of account titles used by the bookkeeper as a guide in recording business transactions

current assets

• are assets that can be realized (collected, sold, used up) one year after year-end date

• ex: cash, accounts receivable, merchandise inventory, prepaid expense

non current assets

• are assets that cannot be realized (collected, sold, used up) one year after year-end date

• ex: property, plant and equipment, long term investments

tangible assets

are physical assets such as cash, supplies, and furniture and fixtures

intangible assets

are non physical assets such as patents and trademarks