Types of Major Accounts

Types of major accounts:

1.Assetsare the resources owned and controlled by the firm.

are obligations of the firm arising from past events

2.Liabilities which are to be settled in the future.

The residual interest of the owner from the business. It

3.Equity can be derived by deducting liabilities from assets.
are the amounts received by a business earned as a
4.Income result of selling something or rendering a service.
Are the amounts consumed by the business to

5.Expenses operate. They are the result of attempting to

generate revenues.
 Classifications of Assets
Current Non-Current
assets assets
 These are assets
 These are assets that
that cannot be
can be realized
realized (collected,
(collected, sold, used
sold, used up) one
up) one year after
year after year-end
year-end date.
date.
 Accrued
Income - is
Prepaid Expenses revenue
- are expenses earned but not Cash - is money on
paid in advance. hand, or in banks,
yet collected.
and other items
Supplies - are considered as
items medium of
purchased by exchange in
business
an enterprise
which are
CURRENT transactions.

unused as of
the reporting
ASSETS Accounts
Receivable - are
date. amounts due from
customers arising
Inventories - are Notes from credit sales or
Receivable - credit services.
assets held for
resale are amounts due
from clients
supported by
promissory
notes.
 Non-Current
Assets
Fixed Assets – are the most
tangible, longest-serving
assets a company can have. Intangible Assets -
They are expected to not be
converted into cash are assets without a
immediately, and are physical substance
regularly placed as means of
production.
Examples are land, Examples include
buildings, brand name,
machineries, trademark, copyright,
equipment and patent
furniture and fixtures
 LIABILITIE
S
Liabilities are the
debts and
obligations of the
company to NON-
CURRENT
another entity. CURRENT
LIABILITIES
LIABILITIES
Liabilities that fall due (paid, These are liabilities that do not
recognized as revenue) fall due (paid, recognized as
within one year after year- revenue) within one year after
end date. year-end date.
 CURRENT
Accounts
LIABILITIES
These are amounts due, or Notes
payable to, suppliers for goods
Payable purchased on account or for Payable
services received on account.
These are amounts due to third
Accrued parties supported by promissory
notes.
Expenses
These are expenses that are Cash collected in advance; the Unearned
incurred but not yet paid liability is the services to be Income
(examples: salaries payable, performed or goods to be
interest payable) delivered in the future.
 NON-CURRENT
LIABILITIES
Bonds Mortgage
Payable Payable
This refers to a loan that is
evidenced by a bond certificate This refers to a bank loan
and a bond indenture. Bond with collateral asset such
indenture refers to the as house and lot or
agreement between the vehicle.
borrower and the lender.
 OWNER’S EQUITY
The residual interest of the
owner from the business. It
Capital can be derived by deducting Drawing
liabilities from assets.

The value of cash and other Account debited for assets

assets invested in the business withdrawn by the owner for
by the owner of the business. personal use from the business
 INCOME
The Increase in resources
resulting from performance of
service or selling of goods.
Income increases equity.
Service Sales
Other
Income Income
Income
Service entities Income derived from non- Merchandising and
primary business activities Manufacturing companies
 EXPENSES
The decrease in resources
resulting from the operations of
business.
Expenses decreases Equity
in the accounting equation.

Office
Salaries Utility Interest
supplies
expense expense expense
expense
• family-feud- FABM1-FOR OBSERVATION.pptx
What are the Types of Major
Accounts? Describe each and
give examples.