What is an Account Title?

An account title is the unique name assigned to an account in an accounting system. An account title is essential when the accounting staff needs to identify an account, since the title conveys the purpose of the account. The other unique identifier, the numeric account code, may incorporate some identification logic, but is much more difficult to associate with a specific account. Without an account title, the possibility of making an incorrect entry into the wrong account would be much higher.

Some common account titles are as follows:

Assets
- Cash
- Accounts receivable
- Marketable securities
- Prepaid expenses
- Fixed assets
- Other assets
Liabilities:
- Accounts payable
- Accrued expenses
- Taxes payable
- Short-term loans
- Long-term loans
Equity:
- Common stock
- Preferred stock
- Additional paid-in capital
- Treasury stock
Revenues:
- Goods revenue
- Services revenue
- Interest income
Expenses:
- Cost of goods sold
- Compensation expense
- Payroll tax expense
- Rent expense
- Office supplies expense
- Depreciation expense
- Interest expense

Account Title Best Practices

There are several best practices associated with account titles, which are as follows:

Periodic review. Conduct a periodic review all account titles, to ensure that they accurately reflect the types of transactions being recorded within the associated accounts.
Standardize titles. Use the same account titles across all company subsidiaries, in order to more easily consolidate accounts as part of the parent company’s closing process.