In accounting, account titles are the names given to the various categories used to keep track of a businesses finances. For any and every transaction, these accounts are updated to reflect what happened in an organized and consistent manner.
The account titles are found on the business' general ledger, which is a running list of all these transactions. When compiled by an accountant, the general ledger accounts combine to form the company's financial statements.
For example, let's say a business pays cash to buy new inventory from its suppliers. The bookkeeper credits (adds) the inventory account on the general ledger for the cost of that new inventory. That updates the books to show that new inventory has been purchased and is now owned by the company.
Likewise, the accountant will debit (subtract) the same amount from the cash account on the general ledger. That indicates that the company paid for the new inventory with cash, and therefore, the company's cash balance has decreased by the cost of the new inventory.
There are a near endless possibility of account titles used by the millions of business around the world. However, we can consolidate that list to the most common accounts, which are organized below by each's location on the financial statements.
Common Account Titles: Income Statement
| Account Title | Type of Account |
|---|---|
| Sales | Revenue |
| Cost of Goods Sold | Cost of Goods Sold |
| Advertising Expense | Operating expense |
| Amortization Expense | Operating expense |
| Insurance Expense | Operating expense |
| Rent Expense | Operating expense |
| Salaries and Wages | Operating expense |
| Utilities Expense | Operating expense |
| Marketing Expense | Operating expense |
| Gain on sale | Other Income |
| Interest Income | Other Income |
| Loss on sale | Other Expense |
| Interest Expense | Other Expenses |
| Income Tax | Taxes |
Common Account Titles: Balance Sheet
| Account Title | Type of Account |
|---|---|
| Cash | Current Assets |
| Marketable Securities | Current Assets |
| Accounts Receivable | Current Asset |
| Inventory | Current Assets |
| Prepaid expenses | Current Assets |
| Allowance for Doubtful Accounts | Current Assets |
| Buildings | Fixed Assets |
| Equipment | Fixed Assets |
| Leasehold Improvements | Fixed Assets |
| Accumulated Depreciation | Fixed Assets |
| Land | Fixed Assets |
| Investment in Bonds | Investments |
| Investment in Stocks | Investments |
| Goodwill | Intangible Assets |
| Intellectual Property | Intangible Assets |
| Accounts Payable | Current liability |
| Cash Dividends Payable | Current Liability |
| Income Tax Payable | Current liability |
| Capital Stock | Shareholders Equity |
| Common Stock | Shareholders Equity |
| Dividends | Shareholders Equity |
| Paid-In Capital | Shareholders Equity |
| Preferred Stock | Shareholders Equity |
| Retained Earnings | Shareholders Equity |
| Treasury Stock | Shareholders Equity |
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