Account definition

An account can have several meanings in the accounting profession. They are as follows:

  • Record. An account can 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.