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GL Account Types |
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GL Accounts are segregated into the following types:
Revenue Accounts Sales - Goods or services sold to your customers.
Expense Accounts Telephone, Courier, Office supplies, etc. - Expenses incurred while doing business.
Asset Accounts Cash - It includes coins, currency, Checks, and postal and bank money orders. The balance shows both the cash on hand and that on deposit in the bank. Accounts Receivable - Goods and services are often sold to customers on the basis of a promise of future payment. Accounts receivable are increased by sales on credit and are decreased by customer payments. Since it is necessary to know the amount currently owed by each customer, a separate record must be kept of each customer's purchases and payments. As well, the total of all those increases and decreases is kept in one account called Accounts Receivable. Inventory - Items purchased for resale. Equipment - Increases and decreases in such things as computers, desks, machinery, etc. are commonly recorded in accounts called Computer equipment, Office equipment, Machinery and Equipment etc.
Liability Accounts Accounts Payable - An account payable is an amount owed to a creditor. Accounts payable result from the purchase of merchandise, supplies, equipment, inventory, and services on credit. Since it is necessary to know the amount owed each creditor, an individual record must be kept of the purchases from and the payments to each. As well, the total of all those increases and decreases is kept in one account called Accounts Payable. Taxes Payable - Income tax and sales taxes collected on behalf of your government.
Equity Accounts The total of the equity accounts is called Owners’ Equity. For a corporation this is called Shareholders’ Equity; for a partnership, Partners’ Equity; and for a sole proprietorship, Proprietor’s Equity. Tip: Owners’ Equity always equals total assets minus total liabilities. Capital Stock - Shareholders’ equity in a corporation represented by transferable certificates showing shares of ownership. Contributed Capital - Amounts invested by the owner(s). Retained Earnings - Accumulated earnings, less accumulated losses and dividends. On the equity account used for prior years retained earnings, check the Retained Earnings checkbox. At year-end the program will move the net of revenues and expenses to this account. Current year retained earnings is not a separate account.. it is the net of the current year revenue and expense accounts. The balance sheet includes both prior years retained earnings and current year retained earnings. In the sample data the Equity line specifies the account range 3110 to 9999, thereby including 3110 Prior Years Retained Earnings and 3111 to 9999 which includes all the expense and revenue accounts.
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