Accounting Online Program Certification Practice Test 2026 - Free Certification Practice Questions and Study Guide

The five main types of accounts in accounting are indeed Assets, Liabilities, Equity, Revenues, and Expenses. These categories are fundamental to understanding how transactions are recorded and reported in financial statements.

Assets represent resources owned by a business that have economic value, such as cash, inventory, and property. Liabilities are obligations that the business owes to others, which can include loans, accounts payable, and other debts. Equity represents the ownership interest in the business, reflecting what is left after liabilities are subtracted from assets. Revenues are the income generated from normal business operations, like sales and service income. Lastly, Expenses are the costs incurred in the process of earning revenues, including rent, salaries, and utilities.

Recognizing these five categories is essential because they form the foundation of the double-entry accounting system, where each transaction impacts at least two of these account types, thus maintaining the accounting equation: Assets = Liabilities + Equity. This relationship ensures that the financial statements accurately reflect the business’s financial position and performance.

Other options include elements like Cash Flow, which is important for understanding liquidity and operations but is not classified as an account type within the basic accounting framework. Debts, while closely related to liabilities, is not a formal term used in