Financial account
A financial account (or, simply, account; hereinafter, the Account) is an accounting device used in bookkeeping to record increases and decreases of business transactions relating to assets, liabilities, capital, withdrawals, revenue, and/or expenses. In other words, the Account is the concept that is used to record financial entries of a similar nature such as cash increases (debits) and decreases (credits) or, vice versa, accounts payable increases (credits) and decreases (debits).
Rules of debit and credit
| Category | Type | Normal balance (or increase) | Decrease |
|---|---|---|---|
| Principal accounts |
Assets | Debit | Credit |
| Expenses | |||
| Withdrawals | |||
| Beneficiary accounts |
Liabilities | Credit | Debit |
| Revenue | |||
| Capital | |||
| Adjusting accounts |
Any | Behave oppositely to their corresponding accounts | |
- Main wikipage: Rules of debit and credit
- Principal accounts, which are assets, withdrawals, and expenses, are debited when they increase and credited when they decrease.
- Beneficiary accounts, which are liabilities, capital, and revenue, are debited when decrease and credited when they increase.
Chart of accounts
- Main wikipage: Chart of accounts
Every organization can establish its own list of account titles, which is called the chart of accounts.
