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    A chart of accounts is a list of all the accounts a company uses in its accounting system, organized by category such as assets, liabilities, equity, income and expenses. It provides a consistent coding structure to classify transactions and prevent errors. While there is no standard format, a chart of accounts typically includes accounts for current and non-current assets, liabilities, equity, revenue and expenses. Additional sub-accounts can be added as needed. The chart of accounts is tailored to each company's specific needs and accounting requirements.

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    A chart of accounts is a list of all the accounts a company uses in its accounting system, organized by category such as assets, liabilities, equity, income and expenses. It provides a consistent coding structure to classify transactions and prevent errors. While there is no standard format, a chart of accounts typically includes accounts for current and non-current assets, liabilities, equity, revenue and expenses. Additional sub-accounts can be added as needed. The chart of accounts is tailored to each company's specific needs and accounting requirements.

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    © All Rights Reserved
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    114 views3 pages

    3 Chart of Accounts

    Uploaded by

    api-299265916
    A chart of accounts is a list of all the accounts a company uses in its accounting system, organized by category such as assets, liabilities, equity, income and expenses. It provides a consistent coding structure to classify transactions and prevent errors. While there is no standard format, a chart of accounts typically includes accounts for current and non-current assets, liabilities, equity, revenue and expenses. Additional sub-accounts can be added as needed. The chart of accounts is tailored to each company's specific needs and accounting requirements.

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    © All Rights Reserved
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    of 3

    Chart of Accounts

    Before recording transactions into the journal, we should first know what accounts to use. This is where
    a chart of accounts comes in handy.
    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.
    Nevertheless, take note that there is no standard chart of accounts because its contents depend upon the
    needs of the company using it.
    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. Here's a sample chart of accounts for
    a small sole proprietorship business:

    Chart of Accounts Example


    Gray Electronic Repair Services
    Chart of Accounts

    ASSETS
    Current Assets (10000-19999)
    10000

    Cash

    10100

    Accounts Receivable

    10101

    Allowance for Doubtful Accounts

    10200

    Notes Receivable

    10300

    Interest Receivable

    10400

    Service Supplies

    Non-Current Assets (20000-29999)


    20000

    Leasehold Improvements

    20100

    Furniture and Fixtures

    20101

    Accumulated Depreciation Furniture and Fixtures

    20200

    Service Equipment

    20201

    Accumulated Depreciation Service Equipment

    LIABILITIES (30000-39999)
    30000

    Accounts Payable

    30100

    Notes Payable

    30200

    Salaries Payable

    30300

    Rent Payable

    30400

    Interest Payable

    30500

    Unearned Revenue

    30600

    Loans Payable

    OWNER'S EQUITY (40000-49999)


    40000

    Mr. Gray, Capital

    40100

    Mr. Gray, Drawing

    INCOME (50000-59999)
    50000

    Service Revenue

    50100

    Interest Income

    50200

    Gain on Sale of Equipment

    EXPENSE (60000-69999)
    60000

    Rent Expense

    60100

    Salaries Expense

    60200

    Supplies Expense

    60300

    Utilities Expense

    60400

    Interest Expense

    60500

    Taxes and Licenses

    60600

    Depreciation Expense

    60700

    Doubtful Accounts Expense

    70000

    Income Summary

    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:
    60101 Salaries Expense Administrative,
    60102 Salaries Expense Servicing,
    60103 Salaries Expense Marketing, etc.
    Again, 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.

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