Chart of Accounts – Introduction

The chart of accounts is a numerical listing of all identified accounts used by a

company to record transactions. As part of the accounting cycle, the chart of
accounts is used in the journaling process (i.e., performing journal entries) and also
serves as the title for each ledger.

All the accounts will be filed under one of five categories:

• Assets
• Liabilities
• Owner’s Equity
• Revenue
• Expenses

Each account can be assigned a number for identification purposes. Most systems
will assign a block of numbers to one of the five categories to be applied to the sub-
categories. Some charts leave gaps of numbers between the sub-category listings
to allow for the addition of new accounts.

Example Chart of Accounts

Chart of Accounts: Bogus Manufacturing

100-199 Assets o 204 Taxes Payable

• 100-109 Cash • 210-219 Long-term Liabilities
o 101 Cash – Regular o 211 Mortgage Loan
Checking Payable
o 102 Cash – Payroll o 212 Bonds Payable, due
Checking 2015
o 103 – Petty Cash o 213 Discounts on Bonds
• 110-119 Receivables Payable
o 111 Accounts Receivable
o 112 Due from Employees
o 113 Notes Receivable
• 120-129 Property, Plant, &
Equipment
o 121 Land
o 122 Buildings
o 123 Equipment
o 124 Vehicles

200-299 Liabilities
• 200-209 Current Liabilities
o 201 Notes Payable –
Credit Line
o 202 Accounts Payable
o 203 Wages and Salaries
Payable
300-399 Owners Equity
• 301 Capital
• 302 Withdrawals
• 303 Net Income

400-499 Revenues
• 400-409 Product Sales
o 401 Store #1 Sales
o 402 Store #2 Sales
o 403 Store #3 Sales
• 410-419 Other Income
o 411 Interest Revenue

500-599 Expenses
• 500-509 Insurance
o 501 Disability Insurance
o 502 Property & Casualty
• 510-519 Interest Expense
o 511 Finance Charge
o 512 Loan Interest
o 513 Mortgage
• And so on …