Major Accounts

• ⦁ Assets. These are things of monetary advantage that are supposed to yield benefits in later periods. Some assets are tangible, like cash, while others are theoretical or intangible, like goodwill or copyrights. Another

  ⦁ Current Assets. ⦁ Fixed (Non-current) Assets
• ⦁ General Journal, also known as the Book of Original Entry, keeps track of all financial transactions by date. It is used to keep track of real-time transactions. It is the first book to document business transactions and follows the general debit and credit principle.

  ⦁ The General Ledger, also known as the final book of entries, provides a reconciled balance by summarizing an account's journal entries. This Book of Record generally tracks resources, liabilities, incomes, costs, and company salaries. As a result, General Ledger is the result of Special Journals and General Journals combined.
• Liabilities. Law requires these obligations to be paid to another organization or individual. Liabilities are creditors’ claims on a company asset because this is the amount of assets creditors would own if the company liquidated ⦁ Current Liabilities ⦁ Non-current (Long term) Liabilities.
• ⦁ Equity. It is the sum invested in a company by its owners in addition to retained earnings. Owners can either increase their shares by contributing money to the company or decrease their equity by withdrawing company funds
• Revenue. It is a measurement of a company's total gross activity. Service and product sales ⦁ Operating Revenue ⦁ Non-operating Revenue
• ⦁ Expenses. It is when an asset loses value because it is used to make money ⦁ Operating Expense. ⦁ Discretionary expense
• Cash accounting


  1. Expense is only recorded when the actual money has been paid

  2. For instance, if a utility expense is incurred in April but paid for in May, it will be recorded as an expense in May using the cash method since cash is paid for it in May
• Accrual accounting


  1. Based on the matching principle

  2. Revenue for each period is matched to the expenses incurred in earning that revenue during the same accounting period

  3. For example, sale commission expenses will be recorded when the related sales are reported, regardless of when the commission was actually paid
• Accrual accounting


  Ensures that accurate profits are reflected for every accounting period