What is an account?
One way to define an account is the record that is part of the general ledger and is used to book and save debit and credit transactions. For instance, a corporation will own a Cash account in which every transaction that is concerned with cash is recorded. If any commodities are sold by the company, the Cash account will be debited and the Sales account will be credited.
An account can also be defined as a record of customer relationship. For instance, if commodities are sold by a company to a customer on credit, the seller will have an account receivable and the purchaser will have an account payable.
The term on account means not for cash. For instance, if a company purchases commodities with the terms net 30 days, it means that the company has a month in which to make the payment.
