Permanent account
In accounting, permanent account means a balance sheet account — asset, liability or equity — whose closing balance carries forward as the next period's opening balance.
- Layer
- Lexicon
- Defined in
- Lexicon
- Also called
- Real account
- Nearby
- 4
Not a rule
Bookkeeping convention — not codified. US GAAP governs recognition, measurement and presentation — not the mechanics a bookkeeper uses to get there. Anyone citing a standard for this word is citing the wrong thing.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- balance account
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
Terms this one depends on
- Balance sheetAssets, liabilities and equity at a point in time, proving the accounting equation
- LiabilityA present obligation of the entity to transfer an economic benefit (FASB CON 8 ¶E37)
- AccountA GL account in the chart of accounts. Always qualify when a bank account is meant.
- EquityThe residual interest in the assets that remains after deducting liabilities (FASB CON 8 ¶E61)
- PeriodA fiscal reporting window
- AssetA present right of the entity to an economic benefit (FASB CON 8 ¶E16)
Also in Close
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Temporary account vs permanent accountTemporary accounts — revenue, expenses, dividends and drawings — measure one period and are closed to zero at year-end; permanent accounts — assets, liabilities and equity — carry their balances forward.Compare
- Journal entry for closing entriesAt the end of the fiscal year, debit every revenue account for its credit balance, credit every expense account for its debit balance, and take the difference — net income — to Retained earnings. Revenue and expense accounts start the new year at zero.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.