Understanding the term ACCOUNT and its various statements
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What does the term ACCOUNT mean?
Firstly an ACCOUNT is an idea and not a thing. It is:
- An idea - a line on a chart
- A balance that represents the debt between two companies
There is a real thing called statement of account, of which there are two kinds - Statement of outstanding items and Statement of movements.
Two important aspects:
- Account HAS a statement
- Account IS a balance
How many types of ACCOUNTS can be there?
Two types:
- Open Item Account - which is a balance at a point of time for which you can obtain a Statement of movements or Statement of outstanding items. Open Item Account has everything the Balance Forward Account has.
- Balance Forward Account - which is a balance at a point of time for which you can obtain a Statement of movements.
What is there is a Statement of movements?
updating. more to add soon
