Account

Account

Account is used to classify the information. Each financial item has separate account like salary account, sales account, plant and machinery account.

Sides of Account

Account has two sides i.e. debit side and credit side. The left side of account is known as debit side, while right side of account is known as credit side.

Nature of Accounts

Nature of account means the nature of financial item and account may be an asset account, a liability account, an expenses account, an income account or an equity account.

Charts of Accounts

Chart of account is a list maintain by the organization about all head of accounts. Chart of accounts has been discussed in more detail in my other article.

 Ledger Account

All accounts are maintained in a book know as ledger. Because ledger maintains all account for a company, therefore some time account is also called ledger account. In professional life you will often hear the word ledger account.

Format of Account

A simple format of account is shown below. You can see that account is T shaped; therefore it is also called T account.

                                                    Aslam A/C

Date	Particulars	Dr.	Date	Particulars	Cr.
	Sales	20,000		Balance	20,000