In accounting terms, an account type is a classification system used to categorize different types of transactions into logical groups. This classification provides a clear understanding of where particular entries should be allocated in order to help track the financial activity of a business. There are several types of accounts within a chart of accounts – assets, liabilities, equity, expenses, and income. Each account within this classification system serves a different purpose and should be understood by anyone looking to gain an accurate view of the company’s financial standing. By properly utilizing the various account types available to you, you will have a more efficient, accurate, and insightful way of running your business.