What is an account? - QS Study
top logo

Account is a record of increases and decreases in specific asset liability, or owner’s equity items.

Types of Accounts: Accounts are of six types.  They are discussed below:

Asset Account: Asset is the resource owned by a business.

Example: Cash Account, Land Account, Equipment Account etc.

Expense Account: Expense is the cost of asset consumed or service used it the process of earning revenue.

Example: Rent Expense, Salary Expense, Utility Expense etc.

Drawing Account: Drawing is the withdrawal of cash or other asset from an unincorporated business for the personal use of the owner.

Example: Cash Drawing Account, Merchandise Drawing Account etc.

Liability Account: Liability is the creditor ship claim on total asset.

Example: Accounts Payable, Salary Payable, Rent Payable etc.

Revenue Account: Revenue is the gross increase in owner’s equity resulting from business activities.

Example: Service Revenue, Concession Revenue, Rent Revenue etc.

Capital Account: Capital is the ownership claim on total

Example: Mr. A. Capital, Mr. A. Additional Investment etc.