Account Types (Maintain Chart of Accounts)

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.

Select this account type if you are setting up open vendor accounts or credit card (purchase) accounts.

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.

Select this account type if you are setting up accrued income that customers owe.

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.

Select this account type if you are setting up depreciation accounts for known fixed assets.

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.

Select this account type if you are setting up accounts such as operation expense, supplies expense, salary and wage expense, travel expense, or charity expense.

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.

Select this account type if you are setting up any of the following fixed assets:

• Land: property, storage space, or parking lots.
• Buildings: structures in which the business is carried out.
• Machinery: heavy equipment used to carry out business operations. For example, you may want to set up any of the following: store equipment or fixtures, factory equipment of fixtures, office equipment or fixtures (including computers and furniture), and delivery equipment (including autos, trucks, and vans used primarily in making deliveries to customers).

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.

Select this account type if you are setting up sales revenue accounts. It is common practice to create different income accounts for each category of revenue that you want to track (for example, retail income, service income, interest income, and so on).

This represents deposits in banks available for current operations, plus cash on hand consisting of currency, undeposited checks, drafts, and money orders.

Select this account type if you are setting up bank checking accounts, petty cash accounts, money market accounts, and certificates of deposit (CDs).

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.

Select this account type if you are setting up assets that are intended for resale. It is common practice to create different accounts for each category of inventory that you want to track (for example, retail inventory, raw materials inventory, work in progress inventory, finished goods inventory, and so on).

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).

Select this account type if you are setting up cost-of-goods-sold accounts to be used when selling inventory items.

This represents those debts that are not due for a relatively long period of time, usually more than one year. Portions of long-term loans due and notes payable with maturity dates at least one year or more beyond the current balance sheet date are considered to be long-term liabilities.

Select this account type if you are setting up long-term liabilities (for example, long-term loans and noncurrent notes payable).

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.

Select this account type if you are a corporation and want to record common stock or other equity intended as owner investment. Tell me more about types of equity accounts.

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.

Select this account type if you are setting up assets such as deposits, organization costs, amortization expense, noncurrent notes receivable, and so on.

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.

Select this account type if your business is a proprietorship and you want to record dividends paid to partners or if you are a corporation and want to record dividends paid to stockholders. Tell me more about types of equity accounts.

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.

Select this account type if you are setting up assets such as prepaid expenses, employee advances, current notes receivable, and so on.

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.

You can have only one retained earnings account in Sage 50. Tell me more about types of equity accounts.

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.

Select this account type if you are setting up accrued expenses from a vendor, extended lines of credit, short-term loans, sales tax payables, payroll tax payables, client escrow accounts, suspense (clearing) accounts, and so on.

Payables Retainage is used to specify a liability account that is dedicated to retainage payables. Any account that has an Account Type of Payables Retainage may be used on the Purchases and Vendor Credit Memo Withhold Retainage tab.

This account type is used for an asset account that is dedicated to Receivables Retainage. Sage 50 will use the amounts applied to those accounts for tracking retainage on the Retainage Report and for releasing retainage during the Progress Billing routine.