Editing Chart of accounts (section)

== Types of accounts ==
There are various types of accounts:<ref>{{cite web | url=https://www.youtube.com/watch?v=hxBrbPGSckY | title=Understanding Asset, Liability, Equity, Income and Expenses &#124; Part-3 Accounting Series | website=[[YouTube]] | date=15 April 2022 }}</ref>
# '''[[Asset]] accounts''' are used to identify assets. An asset is a present right of an entity to an economic benefit (CF  <ref>{{Cite web|url=https://www.fasb.org/cs/ContentServer?c=Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176179207571|title = Statement of Financial Accounting Concepts No. 8, Chapter 4}}</ref> E16). Common examples of asset accounts include cash on hand, cash in bank, receivables, inventory, pre-paid expenses, land, structures, equipment, patents, copyrights, licenses, etc. [[Goodwill (accounting)|Goodwill]] is different from other assets in that it is not used in operations and cannot be sold, licensed or otherwise transferred.
# '''[[Liability (financial accounting)|Liability]] accounts''' are used to recognize liabilities. A liability is a present obligation of an entity to transfer an economic benefit (CF E37). Common examples of liability accounts include accounts payable, deferred revenue, bank loans, bonds payable and lease obligations.
# '''[[Owners' equity|Equity]] accounts''' are used to recognize ownership equity. The terms equity [for profit enterprise] or net assets [not-for-profit enterprise] represent the residual interest in the assets of an entity that remains after deducting its liabilities (CF E61). Equity accounts include [[common stock]], paid-in capital, and retained earnings. Equity accounts can vary depending where an entity is domiciled as some jurisdictions require entities to keep various sub-classifications of equity in separate accounts.
# '''[[Revenue]] accounts''' are used to recognize revenue. Revenues are inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities (CF E80).
# '''[[Expense]] accounts''' are used to recognize expenses. Expenses are outflows or other using up of assets of an entity or incurrences of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities (CF E81).
# '''[[Gain (accounting)|Gain]] accounts''' are used to recognize gains.  Gains are increases in equity (net assets) from transactions and other events and circumstances affecting an entity except those that result from revenues or investments by owners (CF E82). In practice, changes in the market value of assets (positive) or liabilities (negative) are recognized as gains while, for example, interest, dividends, rent or royalties received are recognized as other revenue.
# '''[[Accounting loss|Loss]] accounts''' are used to recognize losses.  Losses are decreases in equity (net assets) from transactions and other events and circumstances affecting an entity except those that result from expenses or distributions to owners (CF E83). In practice, changes in the market value of assets (negative) or liabilities (positive) are recognized as losses while, for example, interest or charitable contributions are recognized as other expenses.
# '''[[Income]]''' is the term generally used when referring to revenue and gains together. A separate term for the aggregation of expenses and losses does not exist.
# '''[[Contra-accounts]]''' are accounts with negative balances that offset other balance sheet accounts. Examples are [[accumulated depreciation]] (offset against fixed assets), and the [[allowance for bad debts]] (offset against accounts receivable). Deferred interest is also offset against receivables rather than being classified as a liability. Contra accounts are also often referred to as adjustments or adjusting accounts.