Three Digit Chart of Accounts

A three digit chart of accounts allows a business to create a numerical sequence of accounts that can contain as many as 1,000 potential accounts.

The three-digit format is most commonly used by small businesses that do not break out the results of any departments or divisions in their financial statements.  A sample three digit chart of accounts is shown below:

Account Number	Description
010	Cash
020	Petty cash
030	Accounts receivable
040	Reserve for bad debts
050	Marketable securities
060	Raw materials inventory
070	Work-in-process inventory
080	Finished goods inventory
090	Reserve for obsolete inventory
100	Fixed assets – Computer equipment
110	Fixed assets – Computer software
120	Fixed assets – Furniture and fixtures
130	Fixed assets – Leasehold improvements
140	Fixed assets – Machinery
150	Accumulated depreciation – computer equipment
160	Accumulated depreciation – Computer software
170	Accumulated depreciation – Furniture and fixtures
180	Accumulated depreciation – Leasehold improvements
190	Accumulated depreciation – Machinery
200	Other assets
300	Accounts payable
310	Accrued payroll liability
320	Accrued vacation liability
330	Accrued expenses liability – other
340	Unremitted sales taxes
350	Unremitted pension payments
360	Short-term notes payable
370	Other short-term liabilities
400	Long-term notes payable
500	Capital stock
510	Retained earnings
600	Revenue
700	Cost of goods sold – materials
710	Cost of goods sold – direct labor
720	Cost of goods sold – manufacturing supplies
730	Cost of goods sold – applied overhead
800	Bank charges
805	Benefits
810	Depreciation
815	Insurance
825	Office supplies
830	Salaries and wages
835	Telephones
840	Training
845	Travel and entertainment
850	Utilities
855	Other expenses
860	Interest expense
900	Extraordinary items

In the example, each block of related accounts begins with a different set of account numbers.  Thus, current liabilities begin with “300,” revenue items begin with “600,” and cost of goods solditems begin with “700.” This numbering scheme makes it easier for the accounting staff to remember where accounts are located within the chart of accounts. This type of account range format is also required by the report writing module in many accounting software packages.