Relationship between FS elements and accounts

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”