# Permanent Accounts and Balance Types

Bkper account types define two things at once:

- whether the balance carries forward continuously or is read within a period
- whether the account increases on the **From** side or the **To** side of a transaction

This guide explains those two dimensions together so you can read balances correctly.

If you need the broader model first, see [Core Concepts — Account Types](https://bkper.com/docs/core-concepts.md#account-types) and [Balances](https://bkper.com/docs/core-concepts.md#balances).

## The Two Dimensions That Matter

Every account in Bkper has:

1. a **time behavior**
2. a **balance direction**

### Time behavior

Accounts are either:

- **Permanent** — balances carry forward continuously
- **Non-permanent** — balances are interpreted within a selected period

### Balance direction

Accounts either increase when they appear on:

- the **From** side of a transaction
- the **To** side of a transaction

These two dimensions combine into the four account types used in Bkper.

## The Four Account Types

| Account type | Time behavior | Increases on | Typical examples | Main question it answers |
| --- | --- | --- | --- | --- |
| **Asset** | Permanent | **To** | Bank, cash, inventory, receivables | What do I have right now? |
| **Liability** | Permanent | **From** | Loans, credit card debt, suppliers | What do I owe right now? |
| **Incoming** | Non-permanent | **From** | Sales, salary, interest | How much did I earn in this period? |
| **Outgoing** | Non-permanent | **To** | Rent, payroll, supplies, fuel | How much did I spend in this period? |

## Permanent Accounts

**Permanent accounts** are the balance-sheet accounts in Bkper:

- **Asset** accounts
- **Liability** accounts

Their balances do not reset when the month or year changes. They accumulate continuously and show your financial position at a point in time.

A **Bank** account is a typical permanent Asset account. Each incoming transfer increases its balance, and each outgoing payment decreases it. A **Loan** account is a typical permanent Liability account. Each new borrowing increases the liability balance, and each repayment reduces it.

Permanent accounts answer position questions such as:

- How much cash do I have now?
- How much inventory do I hold now?
- How much do I still owe?

## From Balances: Liability and Incoming Accounts

Accounts with a **From** balance increase when they appear on the **From** side of a transaction.

This includes:

- **Liability** accounts
- **Incoming** accounts

Use this pattern when the source side of the movement is what should grow.

Typical examples:

- a **Loan Payable** account increases when borrowed money comes from that liability account into the bank
- a **Sales** or **Salary** account increases when income flows from that account into a bank or cash account

These accounts often answer period or obligation questions such as:

- How much revenue did I generate this month?
- How much salary income did I receive this year?
- How much do I still owe on this liability?

## To Balances: Asset and Outgoing Accounts

Accounts with a **To** balance increase when they appear on the **To** side of a transaction.

This includes:

- **Asset** accounts
- **Outgoing** accounts

Use this pattern when the destination side of the movement is what should grow.

Typical examples:

- a **Bank** account increases when money arrives in it
- an **Expense** account increases when money is assigned to that spending category

These accounts often answer questions such as:

- How much cash is in this bank account now?
- How much is still receivable from customers?
- How much did I spend on fuel this month?

## How This Appears in Bkper

In Bkper, account type determines both the color and how the balance should be interpreted.

**The Accounts**

**The Transactions**

When reading a balance, ask two questions:

1. Is this account **permanent** or **non-permanent**?
2. Does it increase on the **From** side or the **To** side?

Those two answers tell you whether you are looking at:

- a position that carries forward
- or activity within a period

## Why This Matters

Understanding this model helps you:

- choose the right account type when creating accounts
- interpret balances without relying on debit/credit memorization
- understand why Assets and Outgoing accounts grow on the **To** side
- understand why Liabilities and Incoming accounts grow on the **From** side
- read reports and grouped balances correctly

## Next Steps

- Learn the underlying movement model in [Double-Entry Bookkeeping](https://bkper.com/docs/guides/accounting-principles/fundamentals/double-entry-bookkeeping.md)
- Review the big picture in [Core Concepts](https://bkper.com/docs/core-concepts.md)
- See how time-based balances work in [Closing a Period](https://bkper.com/docs/guides/accounting-principles/fundamentals/closing-a-period.md)