Chart of accounts is a list of all the accounts used by an entity in its general ledger to record double-entry transactions. Each account is given a specific number depending on the nature of the account.
Although most accounting software packages like Quickbooks come with a standard or default list of accounts, bookkeepers can set up and customize their account structure to fit their business and industry. For example, many companies have different departments that incur similar costs like supplies. ...
Expense accounts allow you to keep track of money that you no longer have, and represents any money that you've spent. For example, if you rent, the money will move from your cash account to a rent expense account. Here are more examples of expense accounts to your business may use: ...
After you have a completely sorted list, it’s time to give each account a unique but short name and description, such as “payroll tax expenses” or “sales returns and allowances.” Each account should also be given a unique numerical code to identify it. Many companies use a different ...
A chart of accounts is an important organizational tool in the form of a list of all the names of the accounts a company has included in itsgeneral ledger. This list will usually also include a short description of each account and a unique identification code number. ...
An example of how the digits might be coded is shown in this list:Account Numbering1000 - 1999: asset accounts 2000 - 2999: liability accounts 3000 - 3999: equity accounts 4000 - 4999: revenue accounts 5000 - 5999: cost of goods sold 6000 - 6999: expense accounts 7000 - 7999: other ...
Here's another example of keeping the list manageable: “Vehicle Expenses” can be the main account with sub-accounts of “Gas and Fuel”, “Vehicle Repairs & Maintenance”, “Vehicle Taxes”. The benefits of creating sub-accounts is that when producing an Income Statement or some other repor...
There are four main account types in a chart of accounts: assets, liabilities, income, and expenses. You may also have a fifth chart of accounts, the equity account. No, a chart of accounts and a balance sheet are not the same thing. A chart of accounts has accounts from the balance ...
The chart of accounts is organized under the five main account types. While the five main accounts at the top stay the same, the accounts that sit underneath can be customized to suit your business. For example, within expenses you could have subcategories for utilities, office expenses and ...
For example, you can categorize your revenue and expenses depending on what you sell, who you sell to, and what level of business you’re at. Chart of accounts list of account types A standard chart of accounts contains multiple accounts under each category. Your company might have an ...