Accounting Categories are the various divisions that businesses use to classify financial transactions. This categorization helps provide clarity in accounting records by providing more detail than just a single line item for each expense or income. Common categories include assets, liabilities, equity, revenue, and expenses. Each category has its own set of rules and regulations according to generally accepted accounting principles (GAAP). By knowing the different accounting categories, business owners can develop an organized way of tracking financial data and make more informed decisions. With the right system in place, they can also better understand their financial performance over time.