Account Types

Account Type is compulsory for all account that you set up. In Peachtree Premium 2008, there are 15 account type includes the following:

1. Accounts Payable	This represents balances owed to vendors for goods, supplies, and services purchased on an open account. Accounts payable balances are used in accrual-based accounting, are generally due in 30 or 60 days, and do not bear interest.
2. Accounts Receivable	This represents amounts owed by customers for items or services sold to them when cash is not received at the time of sale. Typically, accounts receivable balances are recorded on sales invoices that include terms of payment. Accounts receivable are used in accrual-based accounting.
3. Accumulated Depreciation	This is a contra asset account to depreciable (fixed) assets such as buildings, machinery, and equipment. Depreciable basis (expense) is the difference between an asset's cost and its estimated salvage value. Recording depreciation is a way to indicate that assets have declined in service potential. Accumulated depreciation represents total depreciation taken to date on the assets.
4. Cash	This represents deposits in banks available for current operations, plus cash on hand consisting of currency, undeposited checks, drafts, and money orders.
5. Cost of Sales	This represents the known cost to your business for items or services when sold to customers. Cost of sales (also known as cost of goods sold) for inventory items is computed based on inventory costing method (FIFO, LIFO, or Average Cost). LIFO is not allowed by International Accounting Standards
6. Equity - Doesn't Close	This represents equity that is carried forward from year to year (like common stock). Equity is the owner's claim against the assets or the owner's interest in the entity. These accounts are typically found in corporation-type businesses.
7. Equity - Gets Closed	This represents equity that is zeroed out at the end of the fiscal year, with their amounts moved to the retained earnings account. Equity, also known as capital or net worth, are owners' (partners' or stockholders') claims against assets they contributed to the business.
8. Equity - Retained Earnings	This represents the earned capital of the enterprise. Its balance is the cumulative, lifetime earnings of the company that have not been distributed to owners.
9. Expenses	These represent the costs and liabilities incurred to produce revenues. The assets surrendered or consumed when serving customers indicate company expenses. If income exceeds expenses, net income results. If expenses exceed income, the business is said to be operating at a net loss.
10. Fixed Assets	These represent property, plant, or equipment assets that are acquired for use in a business rather than for resale. They are called fixed assets because they are to be used for long periods of time.
11. Income	Income (also known as revenue) represents the inflow of assets resulting from the sale of products and services to customers. If income exceeds expenses, net income results. If expenses exceed income, the business is said to be operating at a net loss.
12. Inventory	This represents the quantity (value) of goods on hand and available for sale at any given time. Inventory is considered to be an asset that is purchased, manufactured (or assembled), and sold to customers for revenue.
13. Other Assets	This represents those assets that are considered nonworking capital and are not due for a relatively long period of time, usually more than one year. Notes receivable with maturity dates at least one year or more beyond the current balance sheet date are considered to be "noncurrent" assets.
14. Other Current Assets	This represents those assets that are considered nonworking capital and are due within a short period of time, usually less than a year. Prepaid expenses, employee advances, and notes receivable with maturity dates of less than one year of the current balance sheet date are considered to be "current" assets.
15. Other Current Liabilities	This represents those debts that are due within a short period of time, usually less than a year. The payment of these debts usually requires the use of current assets.