A bookkeeper must remember that an Account Name or Account Title is the assigned name or title to a group of values in business transactions which have or bears the same / similar nature, function or character pertaining to one item only.
Meaning, a bookkeeper must assign a name or a title to a grouping of values pertaining to one item only. Say, a coin, a paper money, checks, bank drafts, or money orders are received or paid. These items pertain to one item only and they are described as Cash. So, assign them the account name or title Cash. In other words, identify them as Cash Account. Other practitioners, uses the account name Cash and Cash Equivalents for Cash Account. Another example, computers, adding machines, calculators, and filing cabinets pertain to one item only and can be represented as Office Equipment.
This process is called identification of accounts. The moment an account name or title has already been designated or identified or assigned to a grouping of values, such account becomes identical to the items pertaining to the similar items in the grouping of values. For instance, the account assigned to cash items becomes known or identified as Cash Account or Cash and Cash Equivalents Account. Similarly, the account for office equipments becomes identified or known as Office Equipment Account.
The skill or ability to recognize or identify the account name or title of values parted with or values received is a very significant factor in the performance of the work of bookkeeping and accounting. Thus, the bookkeeper must familiarize himself with account names or titles.
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