ACTIVITY # 6 – FIVE TYPES OF MAJOR ACCOUNTS

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It is a medium of exchange for business transactions.

• Accounts Receivable

• Cash

• Capital

• Income

These are the bills paid in advance.

• Accrued Income

• Current liabilities

• Expenses

• Prepaid Expenses

These are the assets/resources that are held for resale.

• Inventories

• Tangible Assets

• Intangible Assets

• Long-term investments

These are the investments of the firm made for long-term purposes.

• Capital

• Tangible Assets

• Long-term investments

• Inventories

These are obligations that reach their due dates for payments within one year after the year-end date.

• Notes Payable

• Mortgage Payable

• Current liabilities

• Unearned Income

Examples of this are cash, supplies, furniture, and fixtures.

• Intangible Assets

• Tangible Assets

• Long-term investments

• Inventories

Debts that are supported by written notes or promises.

• Accounts Receivable

• Mortgage Payable

• Notes Payable

• Current liabilities

These are worth cash and other assets invested in the business.

• Owner’s Equity

• Capital

• Income

• Long-term investments

It is the increase in resources resulting from the performance of services or the sale of goods.

• Capital

• Income

• Owner’s Equity

• Accrued Income