Account Types & Financial Statements

Accounting basics that you need to know

What Account Type is Accounts Receivable?

Asset

What Financial Statement is Accounts Receivable found on?

Balance Sheet

What type of classification is Accounts Receivable?

Current Asset

What causes Accounts Receivables to increase?

Sell goods/services to customers on account

What causes Accounts Receivables to decrease?

Collect cash on account, write off accounts as uncollectible, customer returns product

What type of account is Cash?

Asset

What Financial Statement is Cash reported on?

Balance Sheet

What type of classification is Cash?

Current Asset

What causes the Cash balance to increase?

Receive cash from customers

What causes the Cash balance to decrease?

Pay cash for supplies, other expenses, equipment, etc.

What type of account is Marketable Securities (Short Term Investments)?

Asset

What financial statement is Marketable Securities (Short term investments) reported on?

Balance Sheet

What type of classification is Marketable Securities (Short term investments)?

Current Asset

What cases the balance of Marketable Securities (Short term investments) to increase?

Investing money in stocks, money markets with maturities between 3-12 months

What cases the balance of Marketable Securities (Short term investments) to decrease?

Selling Investments

What account type is Inventory?

Asset

What Financial statement is Inventory reported on?

Balance Sheet

What type of classification is Inventory?

Current Asset

What causes the balance of Inventory to increase?

Purchase of inventory from suppliers

What causes the balance of Inventory to decrease?

Selling/shipping product (recording COGS)

What account type is Prepaid Rent?

Asset

What financial statement is Prepaid Rent reported on?

Balance Sheet

What type of classification is Prepaid Rent?

Current Asset

What causes the balance of Prepaid Rent to increase?

Cash paid for rent in advance

What causes the balance of Prepaid Rent to decrease?

Time passing (recording Rent Expense)

What account type is Prepaid Insurance?

Asset

What financial statement is Prepaid Insurance reported on?

Balance Sheet

What type of classification is Prepaid Insurance?

Current Asset

What causes the balance of Prepaid Insurance to increase?

Cash paid for insurance in advance

What causes the balance of Prepaid Insurance to decrease?

Time passing (recording Insurance Expense)

What account type is Supplies?

Asset

What financial statement is Supplies reported on?

Balance Sheet

What type of classification is Supplies?

Current Asset

What causes the balance of Supplies to increase?

Purchasing supplied for office use

What causes the balance of Supplies to decrease?

Using supplies

What account type is Security Deposit?

Asset

What financial statement is Security Deposit reported on?

Balance Sheet

What type of classification is Security Deposit?

Current or Long Term Asset

What causes the balance of Security Deposit to increase?

Providing a security deposit for property or other equipment

What causes the balance of Security Deposit to decrease?

Receiving the security deposit back

What Account Type is Property, Plant & Equipment (PP&E)?

Asset

What Financial Statement is Property, Plant & Equipment (PP&E) reported on?

Balance Sheet

What type of classification is Property, Plant & Equipment (PP&E)?

Long Term Asset

What causes the balance of Property, Plant & Equipment (PP&E) to increase?

Purchase PP&E

What causes the balance of Property, Plant & Equipment (PP&E) to decrease?

Sell/dispose PP&E, impairment of value

What Account Type is Allowance for Uncollectible Accounts?

Contra Asset

What Financial Statement is Allowance for Uncollectible Accounts reported on?

Balance Sheet

What type of classification is Allowance for Uncollectible Accounts?

Current Contra Asset

What causes the balance of Allowance for Uncollectible Accounts to increase?

Estimate more accounts uncollectible

What causes the balance of Allowance for Uncollectible Accounts to decrease?

Write off accounts, reduce estimate of uncollectible

What Account Type is Accumulated Depreciation?

Contra Asset

What Financial Statement is Accumulated Depreciation reported on?

Balance Sheet

What type of classification is Accumulated Depreciation?

Long Term Contra Asset

What causes the balance of Accumulated Depreciation to increase?

Time passing, Record depreciation expense

What causes the balance of Accumulated Depreciation to decrease?

Sell/dispose PP&E

What Account Type is Accounts Payable?

Liability

What Financial Statement is Accounts Payable reported on?

Balance Sheet

What type of classification is Accounts Payable?

Current Liability

What causes the balance of Accounts Payable to increase?

Purchase inventory or supplies on account

What causes the balance of Accounts Payable to decrease?

Pay suppliers for items previously purchased

What Account Type is Salaries Payable?

Liability

What Financial Statement is Salaries Payable reported on?

Balance Sheet

What type of classification is Salaries Payable?

Current Liability

What causes the balance of Salaries Payable to increase?

Employees earn salaries (recording salary expense)

What causes the balance of Salaries Payable to decrease?

Pay employees

What Account Type is Taxes Payable?

Liability

What Financial Statement is Taxes Payable reported on?

Balance Sheet

What type of classification is Taxes Payable?

Current Liability

What causes the balance of Taxes Payable to increase?

Recording tax expense you have not paid yet

What causes the balance of Taxes Payable to decrease?

Paying the tax liability

What Account Type is Unearned (Deferred) Revenue?

Liability

What Financial Statement is Unearned (Deferred) Revenue reported on?

Balance Sheet

What type of classification is Unearned (Deferred) Revenue?

Current Liability

What causes the balance of Unearned (Deferred) Revenue to increase?

Cash received from customer in advance of work being performed

What causes the balance of Unearned (Deferred) Revenue to decrease?

Work performed on the customer contract (revenue recorded on income statement)

What Account Type is Notes Payable?

Liability

What Financial Statement is Notes Payable reported on?

Balance Sheet

What type of classification is Notes Payable?

Current or Long Term Liability (Due Date)

What causes the balance of Notes Payable to increase?

Borrowing money

What causes the balance of Notes Payable to decrease?

Paying back the principle of the debt (note)

What Account Type is Bonds Payable?

Liability

What Financial Statement is Bonds Payable reported on?

Balance Sheet

What type of classification is Bonds Payable?

Current or Long Term Liability (Due Date)

What causes the balance of Bonds Payable to increase?

Issuing bonds (borrowing money through bond issuance)

What causes the balance of Bonds Payable to decrease?

Paying back the principle of the debt (bond)

What Account Type is Common Stock?

Equity

What Financial Statement is Common Stock reported on?

Balance Sheet

What type of classification is Common Stock?

Contributed Capital

What causes the balance of Common Stock to increase?

Issuing common stock (par value)

What causes the balance of Common Stock to decrease?

n/a

What Account Type is Additional Paid in Capital?

Equity

What Financial Statement is Additional Paid in Capital reported on?

Balance Sheet

What type of classification is Additional Paid in Capital?

Contributed Capital

What causes the balance of Additional Paid in Capital to increase?

Issuing common stock (amount above par value)

What causes the balance of Additional Paid in Capital to decrease?

n/a

What Account Type is Treasury Stock?

Contra Equity

What Financial Statement is Treasury Stock reported on?

Balance Sheet

What type of classification is Treasury Stock?

Contributed Capital

What causes the balance of Treasury Stock to increase?

Purchasing outstanding shares of your own common stock

What causes the balance of Treasury Stock to decrease?

Reselling/reissuing shares of treasury stock