IIn accounting, account titles are the names given to different categories used to track a company’s finances. For each transaction, these accounts are updated to reflect what happened in an organized and consistent manner.
The account titles can be found in the general ledger of the company, which is a running list of all of these transactions. When compiled by an accountant, the general ledger accounts combine to form the financial statements of the business.
For example, suppose a company pays cash to purchase new inventory from its suppliers. The accountant credits (adds) the inventory account to the general ledger for the cost of this new inventory. This updates the books to show that new inventory has been purchased and is now owned by the company.
Likewise, the accountant will debit (weld) the same amount from the general ledger cash account. This indicates that the business paid for the new inventory in cash, and as a result, the business’s cash balance decreased by the cost of the new inventory.
There is an almost endless possibility of account titles used by millions of businesses around the world. However, we can consolidate this list to the most common accounts, which are organized below by location of each in the financial statements.
Common account securities: Income statement
| Account Title | Type of account |
|---|---|
| Sales | Returned |
| Cost of goods sold | Cost of goods sold |
| Advertising expenses | Exploitation charges |
| Depreciation expense | Exploitation charges |
| Insurance costs | Exploitation charges |
| Rent expense | Exploitation charges |
| Salaries and treatments | Exploitation charges |
| Utility charges | Exploitation charges |
| Marketing costs | Exploitation charges |
| Gain on sale | Other income |
| Interest income | Other income |
| Loss on sale | Other expenses |
| Interest charges | Other expenses |
| Income tax | Taxes |
Common account securities: balance sheet
| Account Title | Type of account |
|---|---|
| Cash | Current assets |
| Negotiable securities | Current assets |
| Accounts receivable | Current assets |
| Inventory | Current assets |
| Prepaid expenses | Current assets |
| Provision for bad debts | Current assets |
| Buildings | Fixed assets |
| Equipment | Fixed assets |
| Rental improvements | Fixed assets |
| Accumulated depreciation | Fixed assets |
| Earth | Fixed assets |
| Investment in bonds | Investments |
| Equity investment | Investments |
| Good will | Intangible assets |
| Intellectual property | Intangible assets |
| Accounts payable | Current liabilities |
| Cash dividends payable | Current responsibility |
| Income tax payable | Current liabilities |
| Share capital | Equity |
| Ordinary actions | Equity |
| Dividends | Equity |
| Paid-up capital | Equity |
| Preferred stock | Equity |
| Retained earnings | Equity |
| Own shares | Equity |
How a Seattle couple got a $ 60,000 Social Security bonus – and you can too
A Seattle couple recently uncovered little-known Social Security secrets that can boost many retirees’ incomes by up to $ 60,000. They were shocked at how easy it was to actually take advantage of these loopholes. And while it may sound too good to be true, it is 100% real. In fact, a MarketWatch reporter claims that if more Americans used them, the government would have to shell out an additional $ 10 billion … every year! So once you learn how to take advantage of these loopholes, you can confidently retire with the peace of mind that we all seek, even if you are unfortunately not prepared. Just click here to receive your free copy of our new report which details how you can leverage these strategies.
This article is part of The Motley Fool Knowledge Center, which was created based on the wisdom gathered from a fantastic Foolsaurus-based investor community. Go ahead to learn more about our Wiki and how you can get involved to help the world invest, better! If you have any issues with this page, please email us at [email protected] Thank you – and crazy!
The A List of Account Titles In Accounting article originally appeared on Fool.com.
Try one of our Foolish newsletter services free for 30 days. We fools might not all have the same opinions, but we all believe that considering a wide range of ideas makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
