What is a chart of accounts?
submitted by Rathnanigans

you_mahy_consider

A chart of accounts is a listing of all the accounts used by an business. It displays the types of transactions a business typically makes. It categorizes accounts into assets, liabilities, equity, revenues, and expenses. It gives you a standard way to report. From a chart of accounts, you can analyze the company's financial structure. Some software may allow you to click on the accounts and get specific financial details, but the chart itself is not a numbers board. It's just a list of accounts.

you_mahy_consider

It is a list of all the different accounts a company uses to keep track of money coming in and going out. It helps organize things so that everyone knows where to record different types of transactions. From the chart, you can see what kinds of assets, expenses, or revenues the company has. It doesn't show totals. It just lists account types.

kuwaii_not

It's basically a list that shows all the different accounts a business uses to keep its financial records. By looking at it, you can learn what kinds of things the company owns, owes, earns, or spends money on.

butforreal88

A chart of accounts isn't really a financial overview. It doesn't contain financial figures, like how much debt or revenue a company has. It is exactly what it sounds like: A chart of accounts.

Let me show you:

Assets
1010 - Cash
1020 - Accounts Receivable
1030 - Inventory
1040 - Prepaid Expenses

Liabilities
2010 - Accounts Payable
2020 - Notes Payable
2030 - Accrued Expenses

Equity
3010 - Owner's Capital
3020 - Retained Earnings

Revenue
4010 - Sales Revenue
4020 - Service Revenue

Expenses
5010 - Rent Expense
5020 - Salaries Expense
5030 - Office Supplies
5040 - Utilities Expense

This is just a list of account numbers, so you can get an idea of what a company has going on by what accounts it manages. However, this is not an income statement. That is where you see the actual financial status of a company.