1
An account is a record of changes (increases and decreases) in a specific asset, liability, equity, revenue, or expense, acting much like a bank account to track balances.
2
The general ledger (or ledger) is an electronic or computerized system that compiles all accounts and their respective balances.
3
Asset accounts include cash, accounts receivable (customer promises to pay from credit sales), notes receivable (similar to accounts receivable but includes interest), prepaid expenses, supplies, equipment, buildings, and land.
4
Liability accounts represent obligations or debts and include accounts payable (credit purchases from vendors), notes payable (written promises to pay with interest), unearned revenues (payments received before services are performed), and accrued liabilities (expenses owed but not yet paid).