ELEMENTS/PILLARS OF ACCOUNTING

Assets: Any Thing which is own by the company and includes anything on which company has got any type of
claim.
Liabilities: The obligations which are to be paid off or worked off.
Capital: Investment or claim of owners in the business is called owner's equities.
Expenses: The cost of doing business is called expense.
Revenue: The price of goods sold or services rendered is called income.

CHART OF ACCOUNTS
A company’s Chart of Accounts is a list of all Asset, Liability, Equity, Revenue, and Expense accounts included in the
company’s General Ledger. The number of accounts included in the chart of accounts varies depending on the size of
the company. A small family run business may only have twenty total accounts whereas a worldwide company like
General Electric will likely have hundreds of accounts.

The following are examples of Asset accounts:

Cash Interest receivable Office supplies
Petty cash Rent receivable Prepaid insurance
Short-term investments Notes receivable Prepaid interest
Accounts receivable Merchandise inventory Prepaid rent
Automobiles Trucks Long-term Investments
Furniture Office Equipment Machinery
Building Land Patents

The following are examples of Liability accounts:

Accounts payable Rent payable dividend payable
Insurance payable Salaries payable Employee medical insurance payable
Interest payable Wages payable Employee retirement program payable
Legal fees payable Accrued payroll payable Unearned consulting fees
Office salaries payable Income taxes payable Unearned legal fees
Unearned revenue Notes payable Bonds payable
Unearned rent Long-term notes payable Short-term notes payable

The following are examples of Equity accounts:

Owner’s Capital Common stock, par value Owner’s Withdrawals
Retained earnings Cash dividends Stock dividends
 The following are examples of Revenue accounts:
Fees earned Service revenue Commissions earned
Rent revenue Interest revenue Dividends revenue
Sales Sales returns and allowances Sales discounts

The following are examples of Expense accounts:

Depreciation expense Rent expense Insurance expense
Salaries expense Interest expense Office supplies expense
Truck rental expense Store supplies expense Advertising expense
Delivery expense Legal fees expense Miscellaneous expense
General and administrative expense Food and drinks expense Operating expense
Postage expense Repairs expense Selling expense
Property taxes expense Telephone expense Utilities expense
Travel and entertainment expense Income taxes expense

Rules of Debit & Credit

Element of Increase Decrease
Accounting
1 Assets Debit Credit
2 Expenses Debit Credit
3 Liability Credit Debit
4 Capital Credit Debit
5 Revenue Credit Debit