Copyright 2018 - Pfeiffers Accounting & Consulting LLC


While looking at your chart of accounts, you come across some accounts that are unusual but necessary.  What are these accounts, and what are they used for?

  1. Leaseshold improvements: These are listed in your assets section. Used specifically for when you  are leasing a building. Any repairs to fixtures such as carpet, walls lights, etc are reflected in this account.
  2. Inventory purchases receiving: These are listed in your liabilities section. Used specifically for inventory that you are pre-paying for that you do not yet have in your warehouse.
  3. Accrued revenue: These are specifically revenue that you do not account for until it has been earned. Usually, it is when the items are shipped out to the customer.
  4. Customer deposits: These are listed as liabilities.  Customer deposits are deposits from customers for goods they have not yet fully paid for.
  5. Accumulated depreciation: These are listed as a contra-asset, meaning it offsets the assets on the balance sheet. This account is used when depreciation is accounted for on the assets in your company.
  6. Owners drawing: This is listed in your owner's equtiy section. This account, used for personal draws, investments, personal purchases, utilities, is considered a mulit purpose account.

All of these accounts, only sometimes always required in your accounting, are unique yet easy to understand once you know their purpose.