CHART OF ACCOUNTS

 A chart of accounts is a list of all accounts

used by a company in its accounting system.
It makes the bookkeeper's work easier.

 The accounts included in the chart of

accounts must be used consistently to
prevent clerical or technical errors in the
accounting system.
 Accounts are classified into assets, liabilities,
capital, income, and expenses; and each is
given a unique account number. A coding
system is used to organize the accounts.
 Chart of Accounts Example
 Gray Electronic Repair Services
 Chart of Accounts


 ASSETS (1000-1999)
 1000 Cash
 1010 Accounts Receivable
 1011 Allowance for Doubtful Accounts
 1020 Notes Receivable
 1030 Interest Receivable
 1040 Service Supplies
 1510 Leasehold Improvements
 1520 Furniture and Fixtures
 1521 Accumulated Depreciation – Furniture and Fixtures
 1530 Service Equipment
 1531 Accumulated Depreciation – Service Equipment
 LIABILITIES (2000-2999)
 2000 Accounts Payable
 2010 Notes Payable
 2020 Salaries Payable
 2030 Rent Payable
 2040 Interest Payable
 2050 Unearned Revenue
 2060 Loans Payable
 OWNER'S EQUITY (3000-3999)
 3000 Mr. Gray, Capital
 3010 Mr. Gray, Drawing


 REVENUES (4000-4999)
 4000 Service Revenue
 4010 Interest Income
 4020 Gain on Sale of Equipment
 4999 Income Summary
 EXPENSES (5000-5999)
 5000 Rent Expense
 5010 Salaries Expense
 5020 Supplies Expense
 5030 Utilities Expense
 5040 Interest Expense
 5050 Taxes and Licenses
 5060 Depreciation Expense
 5070 Doubtful Accounts Expense
 Additional accounts can be added as the need
arises. For bigger companies, the accounts
may be divided into several sub-accounts.

For example, employee salaries may have

various accounts for different departments
and be included in the chart of accounts as:
 5011 Salaries Expense – Administrative,
 5012 Salaries Expense – Servicing,
 5013 Salaries Expense – Marketing, etc.
 take note that the chart of accounts of one
company may not be suitable for another
company. It all depends upon the company's
needs. In any case, the chart of accounts is a
useful tool for bookkeepers in recording
business transactions.