Assets of a business are properties which are owned by the business. Three types of Asset accounts in:

1. Current Assets
2. Fixed Assets
3. Other Current Assets

Account number: 1000-1499

Current Assets include such things as cash, bank accounts and amount owed to the business by its customers for goods and services sold to them on credit (called accounts receivable).

Account number: 1500-1999

Fixed Assets are items that are held by the business, such as equipments, buildings and land to be sold at a future date.

Account number: 2000-2999

Liabilities of a business are its debts, money borrowed, money where that the business owes money such as amounts owed to creditors for goods and services bought on credit (accounts payable), loans, line of credit and notes payable.

Two types of Liability account:

1. Current Liabilities
2. Long Term Liabilities

Current Liabilities are money owed for a period of less than a year.

Long Term Liabilities are money owed for more than a year.

Account number: 3000-3999

Equity is the interest in the assets of a business that remains after deducting its liability.

Assets – Liabilities = Net Worth or Ownership Equity

Account number: 4000-4999

Income also known as revenues is received in exchange for services provided to customers as part of business, such as commission earned on selling a property.

Account number: 5000-6999

Expenses are incurred to run the business such as printing cost, rent, and advertising.

Account number: 7000-7999

Other Income is revenue which is related to business but not by selling services, such as bank interest.

Account number: 8000-8999

Other Expenses are expenses when you incur a loss selling an asset such as furniture or equipment.