Accounting



What is an account?

One definition of an account is a record in the general ledger that is used to collect and store debit and credit amounts. For example, a company will have a Cash account in which every transaction involving cash is recorded. If the company sells merchandise for cash, the Cash account will be debited and the Sales account will be credited.

Another definition of an account is a record of a customer relationship. For example, if a company sells merchandise to a customer on credit, there seller will have an account receivable and the purchaser will have an account payable.

The term on account means not for cash. For example, if a company purchases merchandise with the terms net 30 days, it means the company has 30 days in which to pay.

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.




Comments

14 Responses to “What is an account?”

  1. mahesh on July 15th, 2009 9:49 pm

    Plz help me ways to journalse the datas? Send ways to journalise.I will be very helpful.Thank U.

  2. ACoach on July 16th, 2009 8:32 am

    You can learn about recording transactions in the general journal by reading the Explanation of Debits and Credits on AccountingCoach.com. There are also Drills to help reinforce your knowledge. It’s free to read.

  3. venkatRamana on July 20th, 2009 4:47 am

    One definition of an account is a record in the general ledger that is used to collect and store debit and credit amounts. For example, a company will have a Cash account in which every transaction involving cash is recorded. If the company sells merchandise for cash, the Cash account will be debited and the Sales account will be credited.

    Another definition of an account is a record of a customer relationship. For example, if a company sells merchandise to a customer on credit, there seller will have an account receivable and the purchaser will have an account payable.

    The term on account means not for cash. For example, if a company purchases merchandise with the terms net 30 days, it means the company has 30 days in which to pay.

  4. arnold on August 5th, 2009 6:23 am

    thanks! for sendding essential references.

  5. cyrus on August 5th, 2009 1:32 pm

    what is an account
    what is a suspense entry

  6. kate on August 7th, 2009 5:28 am

    An account is the record of all business transaction. if we say business transaction is the transaction that take place between two person a buyer and a seller(creditor and a debtor)

  7. vikas jha on August 13th, 2009 6:08 am

    sir i belongs to bsc strem so plz me to understand about accounts

  8. usman on August 14th, 2009 5:36 am

    i am a postgraduate student of commerce i request you to send the latest accounting and business information for me in the above address thank you

  9. hindole on August 28th, 2009 5:31 am

    Pl explain briefly with example the following
    1. marchandise inventory account. 2 Sales account. 3 Receivables account. 4 Cost of goods sold account. 5 profit and loss account

  10. wael reda on September 8th, 2009 3:56 am

    I think accountant such as science that there are rulesandart

  11. sokanya on October 15th, 2009 3:18 am

    What’s useful of Accounting in the organization?

  12. Sajith on December 3rd, 2009 5:39 am

    Dear sir,

    What is the best methord of finding
    Companies Goodwill ?

    Thanks

  13. abiye myco on December 15th, 2009 4:14 am

    Accounting is the recording analysis interpreting and communicating financial transaction.

  14. sudhir bharti on July 29th, 2010 8:11 am

    I think accounting such as science that are rulesandart, what is the best methord of finding companies goodwill ? thanks

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