Active/Passive accounts... are these European terms?? We do not use them in Australia. In 30 years, I have never come across these terms in accounting and I have asked other accountants who had the same confused response as myself. Does anyone know where I can find out what these terms are referring to? I assume they must be different terms for assets, liability, and equity but that is only an assumption.
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Active/Passive accounts are real accounts (balance Sheet) rather than nominal accounts (Income statement). Termenoligies may differ butconcept is required to differintiate accounts into the Financial statements.
Active Accounts are accounts where debit increases the balance. Asset accounts
passive accounts are where credit increases the balance, Liabilites & Equity
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