Account Titles

1878 Words Apr 16th, 2012 8 Pages
The Chart of Accounts
The increases and decreases in accounting element as affected by a business transaction are recorded in a device called account name, account title or account. Each accounting element is composed of several accounts which describe the related economic transactions and events. To maintain uniform account name, the business must have a listing of all the accounts it uses to record economic transactions. This listing of all accounts is called “Chart of Accounts.”

The Chart of accounts is usually arranged in the financial statement order - that is, asset accounts first, followed by liability accounts, owner’s equity, revenues and expenses accounts. An example of chart of accounts could be listed as follows:

Description
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· Prepaid Supplies — various supplies which have been bought for use in the office but are still unused. Examples are unused coupon bonds, ink, ball pen, and janitorial supplies.

Noncurrent Assets — these are assets that do not meet the criteria of a current asset. Generally, they include tangible, intangible, operating and financial assets of a long-term nature.

• Long-term Investments — investments intended to be held for more than one year. Examples are investments in bonds, investments in stocks, investment to affiliates, etc.

• Land - the site owned by the business on which the business building is constructed. This plant asset is not subject to depreciation. All other plant assets are subject to depreciation.

• Building - the structure owned by the business that is used in the operation of the business.

• Furniture and Fixtures — long-lived items used by the business including store furnishings, such as showcases, counters, scales, containers, display racks, as well as furniture used for office purposes, such as desks, chairs, and cabinets.

• Equipment — consists of what generally might be called the machinery used in a business such as computers, delivery equipment of any sort, or machinery used in conveying, packing, sorting or altering the commodities handled.

• Accumulated Depreciation — the aggregate periodic costs of using a depreciable plant asset. In accordance with the systematic cost allocation principle, the

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