Accounts are elements of financial statement
Financial statement elements (4)
- Major classification
- Assets
- Liabilities
- Owner’s equity
- Revenue
- Expense
Account (5)
- Account is record within each element where various transactions are entered
- Exp: inventory, accounts payables
Chart of accounts (6)
- List of accounts that makes up 5 financial statement elements
Contra accounts (7)
- Offset some part of the value of another account
- Exp: equipment has contra account titled “accumulated depreciation”