Accounting is the development and use of a system for recording and analyzing the financial transactions and financial status of a business or other organization.It can be a complete record of all the activities of a business, providing details of every aspect of the business, allowing the analysis of business trends, and providing insight into future prospects.
There are 5 types of account:
1) Asset-anything tangible or intangible that is capable of being owned or controlled to produce value.
2) Liability-a present obligation of the enterprise arising from past events or transactions.
3) Equity-the remaining interest in a company
4) Income-the consumption and saving opportunity gained by an entity.
5) Expense-outflow of money to another person or group to pay for an item or service.
Post by Undead
| Account Type | Normal Balance | Debit | Credit |
|---|---|---|---|
| Asset | Debit | Debits increase asset balances | Credits decrease asset balances |
| Liability | Credit | Debits decrease liability balances | Credits increase liability balances |
| Equity | Credit | Debits decrease equity balances | Credits increase equity balances |
| Income | Credit | Debits decrease income balances | Credits increase income balances |
| Expense | Debit | Debits increase expense balances | Credits decrease expense balances |
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