hi welcome back in this video we'll be reviewing chapter two so we are going to continue with what we starting in chapter one so if you recall chapter one we put transactions in a linear format um that is a good Segway into what we're about to do we're going to start putting them in what we call a journal entry format so really chapter one helps you understand the category and by that I mean is it an asset a liability or equity and whether the individual account itself is increasing or decreasing so the format we'll use in this chapter will be the format that we used going forward all right so um first we're just going to explain accounts um you've actually already been using these so if you remember your list um from last chapter if you have it handy um I don't have the filled out one here but all the accounts that you had written appear like cash and um you know accounts payable accounts receivable well accounts receivables an asset accounts payable and such all of those are accounts and then of course they fall into each one of our three categories of Ale um assets liabilities or um Equity accounts okay so here is a list of various accounts you'll notice in your notes I actually have a pretty good list of different accounts there and is not every single account um but we've already talked about many of these some of the ones um that we didn't talk about would be a prepaid I don't like it here it's called a prepaid expense I actually don't like using that I like calling it um prepaid insurance or prepaid rent which is typically the way you see it um eventually that becomes an expense so that's why it's called prepaid expense but um anyway so that's a new one um you might you'll see notes receivable eventually that would be like if we sold something to a customer and they didn't pass right away or if we loan somebody money and then so we're just going to build on these that we've already used um you could have instead of a note receivable a note payable where we borrowed um some money or bought something and didn't pay for it right away and then you we'll talk about acrs and deferrals um in chapter three now unearned Revenue we briefly touched on that in chapter one that is when um somebody has paid us in advance for something and we have not fulfilled Our obligation or earned that so it's a liability called une unearned Revenue until we fulfill Our obligation okay all right and then um we've discussed some of these so really nothing new here um now another important thing and this is probably an underrated part we really spend just a brief uh moment talking about this but is super important and it's called a chart of accounts so every business will have a list of accounts that they use um for their transactions and you can find that on what's called a chart of accounts um this is also in your notes on the very back the exact same thing here and what's really cool about it is all businesses use a similar numbering system so notice here all our assets start with one liabilities start with two and so forth so now the the length of the account number or whether it has a period and maybe other digits will be different but this should be true for all businesses all assets start with on so I can look at a business's chart of accounts and immediately identify whether it's an asset liability and so forth so I think that's really cool um and what I used to do when I was in Industry I would have my chart of accounts and I would have it on my bulletin board or whatever it was in my office so I could easily see what I need to book to now some businesses will have a much larger chart of accounts than others so for example the last place I worked they changed our numbering system multiple times so we had a binder full of accounts so I would just highlight the ones that I needed to use because I want to be consistent every time I make those entries so again super important and we will use these to make our entries because generally in the accounting software that we use we enter the um transaction based on on the account number um some software does it different than others but usually you have an account number associated with that okay a ledger is a ledger would be um like think about an individual file like if you wanted to see everything that you had booked to cash um ever you would look at the The Ledger what we call The Ledger um it would show you all the transactions booked to that account and each account will have its own Ledger or what we're eventually going to call a te account account so this just tells you um that different companies will have different types of accounts and you would see that in their chart of accounts um and so you can see that here all right so I have another video for this next learning objective and um the chapter two is super important I encourage you to try to understand it as best you can because how you do on chapter 2 I think will determine how you do the rest of the course now now if you don't pick it all up at once it's okay you know but really try to understand what's going on because the better you're understanding now it'll help you out um down the road and of course if you have any questions please don't hesitate to reach out to me