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    Dallas Foley
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    An account tracks increases and decreases of items of interest in an accounting system, which separates accounts for assets, liabilities, equity, revenues and expenses. A ledger contains all accounts and arranges them in the order of assets, liabilities, equity, revenues, and expenses. Asset accounts include land, buildings, equipment, prepaid expenses, debtors, bills receivable, and cash/bank balances. Liability accounts include bills payable, creditors, unearned revenue, long-term liabilities, and secured/unsecured short-term liabilities. Equity accounts represent the difference between assets and liabilities such as share capital, retained earnings, revenues/expenses, and drawings/dividends.

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    AFM concepts

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    An account tracks increases and decreases of items of interest in an accounting system, which separates accounts for assets, liabilities, equity, revenues and expenses. A ledger contains all accounts and arranges them in the order of assets, liabilities, equity, revenues, and expenses. Asset accounts include land, buildings, equipment, prepaid expenses, debtors, bills receivable, and cash/bank balances. Liability accounts include bills payable, creditors, unearned revenue, long-term liabilities, and secured/unsecured short-term liabilities. Equity accounts represent the difference between assets and liabilities such as share capital, retained earnings, revenues/expenses, and drawings/dividends.

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    37 views5 pages

    AFM Concepts

    Uploaded by

    Dallas Foley
    An account tracks increases and decreases of items of interest in an accounting system, which separates accounts for assets, liabilities, equity, revenues and expenses. A ledger contains all accounts and arranges them in the order of assets, liabilities, equity, revenues, and expenses. Asset accounts include land, buildings, equipment, prepaid expenses, debtors, bills receivable, and cash/bank balances. Liability accounts include bills payable, creditors, unearned revenue, long-term liabilities, and secured/unsecured short-term liabilities. Equity accounts represent the difference between assets and liabilities such as share capital, retained earnings, revenues/expenses, and drawings/dividends.

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    What is an account?

    An account is an individual record of increases and decreases in an item that is likely to be of interest or importance. An accounting system has separate accounts for revenue, expenses, asset, liability and equity items.

    What is Ledger?
    A ledger is the file or binder that contains the entire group of accounts of a business.

    Accounts in the ledger are usually arranged in the following order: asset, liabilities, equity, revenues, and expenses.

    What are the asset accounts?


    The following are some of the usual asset accounts: Land Buildings Equipment Prepaid expenses Debtors Bills receivable

    Cash and bank balances

    What are the liability accounts?


    The following are some of the usual liability accounts: Bills payable Creditors

    Unearned revenue

    Long-term liabilities
    Secured and unsecured liabilities Other short-term liabilities

    What are the equity accounts?


    Equity is the difference between a firms assets and liabilities. The following are some of the equity accounts:
    Share capital Retained earnings Revenues and expenses Drawings dividends

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