What Are the 5 Main Account Types in QuickBooks

In QuickBooks, all financial transactions are organized into five main account types. These categories form the foundation of your chart of accounts and determine how your financial reports are generated.

Assets

Assets are what your business owns. This includes cash, bank accounts, accounts receivable, inventory, equipment, and other valuable resources. Assets appear on the Balance Sheet.

Liabilities

Liabilities represent what your business owes. This includes loans, credit cards, accounts payable, payroll liabilities, and taxes owed. Liabilities also appear on the Balance Sheet.

Equity

Equity shows the owner’s investment in the business. It includes owner contributions, retained earnings, and distributions. Equity reflects the net value of the company after liabilities are subtracted from assets.

Income

Income (or revenue) includes all money your business earns from sales or services. These accounts are shown on the Profit & Loss report.

Expenses

Expenses are the costs of running your business, such as rent, utilities, payroll, supplies, and marketing. Expenses also appear on the Profit & Loss report.