Account Classes, Types, and Normal Balances

AccuArk organizes accounts into a three-level hierarchy: classes at the top, types in the middle, and individual accounts at the bottom. This structure drives how balances are calculated and how financial reports are organized.

Account Classes

There are five account classes in AccuArk. These are preconfigured and should not be modified:

Each class has a normal balance direction. This is the side of the ledger that increases the account balance.

Account Types

Within each class, accounts are grouped into types. Types provide a second level of organization and appear as sub-headers in financial reports.

Common Asset Types

• Current Assets — Cash, bank accounts, accounts receivable, inventory
• Fixed Assets — Equipment, furniture, vehicles, buildings
• Other Assets — Security deposits, long-term investments

Common Liability Types

• Current Liabilities — Accounts payable, accrued expenses, short-term loans
• Long-Term Liabilities — Mortgages, long-term notes payable

Common Equity Types

• Owner's Equity — Capital contributions, owner draws
• Retained Earnings — Accumulated profits

Common Income Types

• Revenue — Sales revenue, service revenue
• Other Income — Interest income, miscellaneous income

Common Expense Types

• Cost of Goods Sold — Direct costs of products sold
• Operating Expenses — Rent, utilities, salaries, office supplies
• Other Expenses — Interest expense, bank fees

You can add custom types under Business > Account Types if the defaults do not cover your needs.

How Normal Balance Affects Reports

The normal balance direction is used in every financial calculation:

Chart of Accounts Balance Column

• Debit-normal accounts: Balance = Total Debits - Total Credits
• Credit-normal accounts: Balance = Total Credits - Total Debits

Trial Balance

The Trial Balance shows each account with either a debit balance or credit balance. The net (debits minus credits) determines which column the amount appears in.

Profit and Loss Statement

• Income accounts (credit-normal): Amount = Credits - Debits for the selected period
• Cost and Expense accounts (debit-normal): Amount = Debits - Credits for the selected period
• Net Income = Total Income - Total Expenses

Balance Sheet

• Asset accounts (debit-normal): displayed with their positive balance
• Liability and Equity accounts (credit-normal): displayed with their positive balance
• Verification: Assets should equal Liabilities + Equity

Managing Account Types

To view or add account types, navigate to Business > Account Types. This requires the FIN_VIEW_ACCOUNT_TYPES permission. Each type is associated with one class and inherits that class's normal balance direction.

When creating a new account type:

1. Select the parent class
2. Enter the type name
3. Save

All accounts assigned to the new type will automatically use the correct normal balance direction based on the parent class.