The nature of accounts in accounting

 

The nature of accounts in accounting

 Accounts in accounting are five main accounts, which are the elements of the budget (assets, liabilities, and equity) and the elements of the income statement (revenues and expenses) for each account of these nature born with it.

Assets

Its nature is debatable, it was born as a debtor because it uses money. When capital is deposited in the facility, assets are purchased, whether fixed or non-current, to carry out the facility’s main activity for several accounting periods and with it being debit in nature, it also comes as a credit.

Base

If the assets are exhausted, they remain in debt (+)

If assets decrease, you become a credit (_)

Liabilities

Liabilities are, by their nature, a creditor, as they were born as a creditor because they are an obligation on the establishment towards others. For example, when the establishment made the purchase on the basis of the account, the account of suppliers or creditors arose, meaning that they have money with the establishment because they sold the goods to them on the account, and with that comes a debt also.

Base

If the liabilities increased, it remained credit (+)

If the liabilities decrease, you will be debited (_)

equity

equity are, by their nature, credible because it is an obligation on the facility towards the owners who own the facility because the facility has a legal personality separate from that of its owners, and we will get to know it in detail in the following topics

When the owner of the facility deposits money in the facility, he is depositing it for the purpose of investment and profit. Therefore, property rights are credible, as the capital is the property of the owner of the facility and it is one of the elements of property rights

Base

If the equity is increased, it remains in credit (+)

If property rights decrease, it becomes indebted (_)