In order to use them on Account records, you first need to configure the Account Types.
After reading this article, you will know how to configure Account Type for your own use.
Let's get you started
You first need to go to
Admin >> Accounts
, where you can find the Account Types section. 
Adding a new type
Click on
Add
to create a new Type.You can then choose the name, and eventually the color.

We do recommend to use a color as it is a visual way to quickly identify from a list or a record if the right Account Type has been applied.
Updating an existing type
Click the name of an existing Type from this list if you want to change the name or color.
Changes will automatically apply to the already existing Accounts with this Account Type.