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Chapter 2. Accounting 101 > Types of Accounts

Types of Accounts

Five main types of accounts are used, and all your company’s financial activity will fit into these five types. Within each type you can get creative, using descriptions that fit the kinds of financial transactions in which your company engages.

Tip from

When creating a new account in QuickBooks, here’s a good rule of thumb for determining what main type the account falls into: An asset is what you own; a liability is what you owe; income is what you earn; and an expense is what you spend. Equity is what you have left.



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