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Chart of accounts

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Chart of accounts (COA) is an accounting term that describes a list of common ways money is used by a business so that its owners and managers can organize revenues, costs, and assets into categories. Most small business accounting software comes with sample charts of accounts, but each business may have a unique need or desire to customize items on its chart of accounts.

Even if customized, list is typically arranged in the order of the customary appearance of accounts in a financial statement.


Simple Chart of Accounts

  • Group headings
  • Sales
  • Cost of Sales
  • Manufacturing Expenses
  • Administrative Expenses
  • Marketing Expenses
  • Distribution Expenses
  • Establishment Expenses
  • Financial Expenses

Within each of these headings will be the individual nominal ledger accounts that make up the chart of accounts. Fstablishment expenses may consist of rent, rates, repairs

  • Balance Sheet Accounts
  • Asset Accounts
  • Cash
  • Accounts Receivable
  • Prepaid Expenses
  • Supplies
  • Inventory
  • Land
  • Buildings
  • Vehicles & Equipment
  • Accumulated Depreciation
  • Other Assets
  • Liability Accounts
  • Accounts Payable
  • Bank Loans
  • Taxes
  • Stockholders' Equity Accounts
  • Common Stock (Share Capital),
  • Retained Earnings (Revenue Reserves)
  • Profit & Loss accounts
  • Revenue Accounts
  • Sales Revenue
  • Sales Returns & Allowances
  • Sales Discounts
  • Interest Income
  • Expense Accounts
  • Advertising Expense
  • Bank Fees
  • Depreciation Expense
  • Payroll Expense
  • Payroll Tax Expense
  • Rent Expense
  • Income Tax Expense
  • Telephone Expense
  • Utilities Expense

Types of accounts

  • Asset accounts: represent the different types of economic resources owned by a business, common examples of Asset accounts are cash, cash in bank, building, inventory, prepaid rent, goodwill, accounts receivable
  • Liability accounts: represent the different types of economic obligations by a business, such as accounts payable, bank loan, bonds payable, accrued interest.
  • Equity accounts: represent the residual equity of a business (after deducting from Assets all the liabilities) including Retained Earnings and Appropriations.
  • Revenue accounts or income: represent the company's gross earnings and common examples include Sales, Service revenue and Interest Income.
  • Expense accounts: represent the company's expenditures to enable itself to operate. Common examples are electricity and water, rentals, depreciation, doubtful accounts, interest, insurance.

See Also

External links

This entry includes content from the following Wikipedia article: Chart of accounts

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