The ALCIE Classification

The ALCIE Classification is a a way of categorising trial balance entries into the ledger to which they relate. The system splits the entries into one of 5 different categories as follows:

ALCIE accounts: Summary

Assets: An asset is something you OWN. A business will have a separate account for each category of asset, (e.g. motor vehicles, cash at bank).
Liabilities: A liability is something you OWE. A business will have an account for each different type of liability, (e.g. loans, trade debts).
Capital: Capital is usually identifiable as an injection of value from the owner or an investor rather than money accruing from customers or otherwise generated by the business. An alternative way of thinking of capital is to see it as representing the owner of the business.
Income earned in the business – this usually comes from regular sources. Each main income source of the business will have a separate account (e.g. a public house might record income from food sales and from drink sales in separate accounts).
Expenses of running the business. Each different type of expense is recorded in a separate account (e.g. heating and lighting, rent etc.).