Chart of Accounts

For a business or a company the chart of accounts may be described as an index or list of those financial accounts that a business utilizes in its accounting system and later posts to the ledger. Chart of accounts helps a company to organize its finances and help in distinguishing among different accounts such as expenditures, liabilities, assets and revenues. The account titles and account number are listed in chart of accounts that help in creating a clear picture of finances of a company. Software systems that prepare chart of accounting mostly use similar sequence numbers for a particular account. For example a general chart of accounting may look like this

Sometimes the main accounts are further classified into sub accounts or sub categories depending upon the requirement of the business. Chart of accounts is not a financial statement neither it can be used as a financial report it merely organizes a business’s transactions done within different accounts.

The complexity of Chart of accounts of a company depends upon the complexity of the organizational structure itself. Big companies have complex chart of accounts as compared to small one. Chart of accounts are built in most of the accounting software and a company can modify or personalize the chart according to their own requirement.

Other Related Accounting Articles:

• General Ledger
• External and Internal Balance Sheet
• How to report Profit, Losses and Cash flows
• Headline Earnings
• Analyzing Account Receivables
• Accounting Methods
• Accounting for Non-Trading Concerns
• Bookkeeping
• Accounting For Consignment / Consignment Accounts rules
• Accounting Principles and Accounting Equation