The accounts used by a business can be separated into permanent accounts and temporary accounts.

Permanent accounts carry balances forward from one accounting period to the next. The following types of accounts are permanent accounts:

• Assets

• Liabilities

• Owner’s capital

Temporary accounts accumulate dollar amounts for only one accounting period and then start each new accounting period with a zero balance. The following types of accounts are temporary accounts:

• Revenue

• Expenses

• Owner’s withdrawals