What is an account?

In accounting, there are several meanings of the term account. They are as follows:

• Record. An account be the record in a system of accounting in which a business records debits and credits as evidence of accounting transactions. Thus, the accounts receivable account stores information about billings to customers, as well as reductions of those billings due to payments from customers.
• Customer. An account can be considered the same as a customer. Under this meaning, an account is another entity or person for whom a business acts as a supplier, and with whom there may be an outstanding accounts receivable balance.
• Future payment. If a sale is "on account," this means that the buyer will pay the seller at a later date.

Related Topics

How do I reconcile an account?
What is a reconciliation statement?
What is a suspense account?
What is the normal balance for an account?