Chapter 4

Types of Major
Account
by: Zeus Vernon B. Millan

Rosario M. Perez
 The Account

• Account is the basic storage of

information in accounting. It is a
record of the increases and
decreases in a specific item of asset,
liability, equity, income or expense.
• An account may be depicted through
a T-Account.
 T- Account
• Account Title = name of the account
• Debit Side = left side of the account
• Credit Side = right side of the account
• Balance = represent the difference
between debit and credit.

• Debit (Dr) = value received

• Credit (Cr) = value parted with
 ASSETS
• Cash
• Accounts Receivable
• Allowance for bad debts/doubtful account
(contra)
• Notes Receivable
• Inventory - merchandising
• Prepaid Supplies
• Prepaid Rent
• Prepaid Insurance (current , fixed, intangible)
• Land – no depreciation
 ASSETS
• Building
• Equipment
• Vehicle
• Furnitures & Fixtures
• Accumulated Depreciation (contra)
• Patent, Goodwill, Franchise, Trademark,
customer list (intangible assets)

• Note: All Prepaid are Assets

 LIABILITIES
• Accounts Payable
• Notes Payable
• Unearned Income
• Interest Payable
• Salaries Payable Used in Accrual
• Utilities Payable

• Note: All Payables are Liabilities

 OWNER’S EQUITY

• Owner’s Equity or Capital

• Owner’s Drawing or withdrawal
 INCOME

• Service Fees
• Sales
• Interest Income
• Gains (from the sale of assets)

• Credit balance
 EXPENSES
• Cost of Sales
• Freight Out – shipping cost, delivery
• Rent Expense
• Salaries Expense
• Utilities Expense – water, electricity, cable,
• Supplies Expense
• Bad Debt Expense
• Depreciation Expense
• Advertising Expense – radio, TV, print
 EXPENSES

• Insurance Expense
• Taxes and Licenses
• Transportation and Travel Expense
• Interest Expense
• Miscellaneous Expense
• Losses
 A = L + O.E. I-E
• Balance Sheet • Income Statement
Accounts Normal Balance
 Hint:

• Receivable = Asset
• Payable = Liabilities
• Contra = Deduction
• Prepaid = Advance payment (Assets)
• Assets & Expenses = Debit
• Liabilities, OE, Income = Credit