Accounting Examples and Information

Asset Accounts
Anything owned, whether tangible (a physical item) or intangible (the right to something) is an asset. Assets are generally separated into two groups:
Current Assets - Cash and other assets that will be used up, or sold, or converted to cash within the normal operation of business.
Plant Assets - Permanent or fixed assets, such as land, buildings, equipment, etc.
Common Asset Accounts:
Current Assets:
• Cash - Includes the cash at the store & in the bank.
• Accounts Receivable - What others owe you.
• Notes Receivable - Loans made to others.
• Prepaid Insurance - Premiums that are paid in advance.
• Office Supplies - Are assets from purchase to use.
• Inventories - Ready to be sold and work in progress.
Plant Assets:
• Equipment - Office, production, store equipment.
• Buildings - Your place of business - garage, plant, store.
• Land - Should have it's own account - doesn't depreciate
Liability Accounts
Anything that is owed to others is a liability. Liabilities are often referred to as "payables".
Liabilities are generally separated into two groups:
Current Liabilities
Debts to others that are due in a short period of time and are paid with current assets.
Long-term Liabilities
Debts that are "fixed" or paid over a long period of time, often for plant assets.
Common Liability Accounts:
Current Liabilities:
• Notes Payable - Promissory notes to creditors.
• Accounts Payable - What you owe others on account.
• Unearned Revenue - You've been paid, but haven't delivered.
• Salaries Payable - Salaries you owe employees.
• Interest Payable - Interest you owe.
• Taxes Payable - Taxes you owe.
Long-Term Liabilities:
Liabilities that are carried over a number of years or at least more than one accounting cycle. Examples of long-term liabilities are mortgages payable, bonds payable, and long-term notes

Asset Accounts
Liability Accounts
Owner Equity Accounts
Chart of Accounts
Balance Sheet
Business Entities
Limited Liability Company LLC
Sole Proprietorship
EIN Tax ID Number
Estimated Tax
Income Statement
Journal Entries
Owners Equity
Trial Balance

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