What is An Account - Definition - Meaning - Explanation - Examples

An account shows summarized records of a person, artificial persons (Companies or Corporations) or thing. Examples are Mr. A’s account, ABC’s Account, Expense Account, Income Accounts, Liabilities Accounts, Drawings Account, Equity Account, Capital Account, etc.

There are Different Kinds / Types of Accounts involved in a Accounting Transaction. These accounts are the 5 pillars of accounting. These are Assets, Liabilities, Equity, Expenses And Revenues / Income. Assets. These five accounts belong to Personal And Impersonal Accounts.

  Title

                    Left Side                                                                    Right Side

   

                         Or                                                                               Or

                    Debit Side                                                                  Credit Side

An account has usually four parts

(i) Title

It is the name of the account such as Cash Account, Sales Account, Capital Account etc.

(ii) The Left Side or Debit Side where Debits Accounts Are Recorded

(iii) The Right Side or Credit Side where all of the Credit Accounts are posted from Journal to concerned accounts or Ledgers Accounts.

(iv) Debit Amounts And Credit Amounts

Those accounts which are debited are written on debit side alongwith the amount while credit amounts are written in front of Credit Accounts.

The most important format of an account is T-Account Format or Standard form, but modern format is Self-Balancing Format.