Chart of accounts is to simplify the classification of accounts. With chart of accounts, we can know what are our main accounts, from what account we have to get money and to what account we have to pay money. Chart of accounts is also helpful to identify our assets, liabilities, revenue and expenses. With all these things, we can easily calculate our financial and revenue position.
Chart of Accounts are made in different ways in different accounting software. Following may be its main examples.
First Example
1. Revenue Expenses Accounts
Purchases and sales Expense All sales Expense Purchase Returns & Allowances, Direct Expenses, Administration Expenses, Selling Expenses, Distribution Expenses, Establishment Expenses, Financial Expenses, Advertising Expense, Bank Fees, Client Expense, Depreciation Expense, Payroll Expense, Payroll Tax Expense, Rent Expense, Income Tax Expense, Office Expense, Utilities Expense
2. Capital Expenses Accounts
We also say it balance sheet assets accounts. These accounts represent the different types of economic resources owned or controlled by business. Cash, Bank Accounts, Accounts Receivable (Debtors), Prepaid Expenses, Inventory (Stock on Hand), Land, Buildings, Vehicles & Equipment, Investments & Stocks, Accumulated Depreciation and Other Assets
3. Liability Accounts
Liability accounts: represent the different types of economic obligations by a business. Accounts Payable (Creditors), Credit Cards, Tax Payable, Employment Expenses Payable, Bank Loans,
4.Stockholders' Equity Accounts
Common Stock (Share Capital), Retained Earnings (Revenue Reserves), Drawings
5. Profit and Loss accounts
This account is the matching of expenses and revenues.
6.. Revenue Accounts
Sales Revenue, Sales Returns & Allowances, Sales Discounts, Interest Income,
7. Contra-accounts
Contra accounts are those accounts which adjust the balance sheet assets or liability. Examples are accumulated depreciation against equipment, and allowance for bad debts against long-term notes receivable.
Second Example
First of All Accounting software makes group and each group, there will be ledger accounts. Following are the group form of a chart of accounts.
A. Balance sheet accounts
1.Assets
2. Liabilities
3.Owner's (Stockholders') Equity
B. Income statement accounts
1.Operating Revenues
2.Operating Expenses
3.Non-operating Revenues and Gains
4.Non-operating Expenses and Losses
Chart of Accounts are made in different ways in different accounting software. Following may be its main examples.
First Example
1. Revenue Expenses Accounts
Purchases and sales Expense All sales Expense Purchase Returns & Allowances, Direct Expenses, Administration Expenses, Selling Expenses, Distribution Expenses, Establishment Expenses, Financial Expenses, Advertising Expense, Bank Fees, Client Expense, Depreciation Expense, Payroll Expense, Payroll Tax Expense, Rent Expense, Income Tax Expense, Office Expense, Utilities Expense
2. Capital Expenses Accounts
We also say it balance sheet assets accounts. These accounts represent the different types of economic resources owned or controlled by business. Cash, Bank Accounts, Accounts Receivable (Debtors), Prepaid Expenses, Inventory (Stock on Hand), Land, Buildings, Vehicles & Equipment, Investments & Stocks, Accumulated Depreciation and Other Assets
3. Liability Accounts
Liability accounts: represent the different types of economic obligations by a business. Accounts Payable (Creditors), Credit Cards, Tax Payable, Employment Expenses Payable, Bank Loans,
4.Stockholders' Equity Accounts
Common Stock (Share Capital), Retained Earnings (Revenue Reserves), Drawings
5. Profit and Loss accounts
This account is the matching of expenses and revenues.
6.. Revenue Accounts
Sales Revenue, Sales Returns & Allowances, Sales Discounts, Interest Income,
7. Contra-accounts
Contra accounts are those accounts which adjust the balance sheet assets or liability. Examples are accumulated depreciation against equipment, and allowance for bad debts against long-term notes receivable.
Second Example
First of All Accounting software makes group and each group, there will be ledger accounts. Following are the group form of a chart of accounts.
A. Balance sheet accounts
1.Assets
2. Liabilities
3.Owner's (Stockholders') Equity
B. Income statement accounts
1.Operating Revenues
2.Operating Expenses
3.Non-operating Revenues and Gains
4.Non-operating Expenses and Losses
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