CHART OF ACCOUNTS

Definition: A chart of accounts is a listing of the names of the accounts that a company has identified and made
available for recording transactions in its general ledger.

This is in the form of:

 Assets  Revenue
 Liabilities  Expense
 Equity
Assets are economic sources that are owned by a business and are expected to benefit in future. Assets are divided
into two main categories:

Current Assets -all those assets which are expected to be used up or converted into cash within a year.
 Cash on hand  Inventory
 Cash at Bank  Office supplies
 Notes Receivable  Prepaid Expenses
 Accounts Receivable

Non-Current Assets/ Fixed Assets- All those assets which are not expected to be used up or converted into cash
within one year. Sub-divided into two categories:
1. Tangible Assets -The physical Assets
 Land  Equipment
 Building  Machinery
 Furniture & Fixture
2. Intangible Assets – intangible assets like Goodwill, Patents, Trademarks, Franchise

 Patent: Exclusive legal right granted by the federal government for manufacture, use, and sale of a particular
products.
 Trademarks: Trademark is a name, symbol or design that identify a product or group of products.
 Franchise: A franchise is a right granted by a company or a government unit to conduct a certain type of
business in a specific geographical area.

Liabilities- are debt of an organization.

Current Liabilities- All those liabilities whose payment is due within a year.
 Accounts Payable  Salaries payable
 Notes Payable  Interest payable
 Unearned
Non-Current Liabilities or Long-term Liabilities- All those liabilities which the entity expects to pay after
one year.
 Bonds Payable  Long term Notes payable (Bank
 Mortgage payable loans)
 Warranty payable

Equity- represents the owner’s claims to the assets of the business.

 Capital Stock
 Retained Earning
Revenue is the total amount of money received by the company for goods sold or services provided during a certain
time period.
 Sales  Rent Income
 Commission  Interest income
 Fees  Dividend income
Expenses -An expense in accounting is the money spent or cost incurred in an entity's efforts to generate revenue.
Expenses represent the cost of doing business.
 Transportation Expense  Interest expense
 Salaries Expense  Utilities expense
 Rent Expense  Depreciation Expense
 Selling expense