Definition from Wikipedia:

Chart of accounts (COA) is a list of the accounts used by an organization. The list can be numerical,
alphabetic, or alpha-numeric. The structure and headings of accounts should assist in consistent
posting of transactions. Each nominal ledger account is unique to allow its ledger to be located. The
list is typically arranged in the order of the customary appearance of accounts in the financial
statements, profit and loss accounts followed by balance sheet accounts. 

4C's(Currency,Calender,COA,Accounting Conventions
Overview:
This post will introduce the process flow for creating a chart of accounts. The chart of Accounts
defines the accounting structure of the organization. This structure includes every aspects of the
business like business units, accounts, products, services, geographical locations etc. Further COA
also tells us about how the elements of the structure combined to form the account combination.
Uses:
1. Accounting combinations defined in Chart of Accounts is used to various
transactions happening in the organization.
2. Helps in generating account balances.
3. Helps in Reporting
4. Helps in Analyzing financial information
5. Many more … 
Basic Steps Involved in Implementation:
Steps in Detail:
1. Value Set Definition:
The value set is the group of values that determine the attributes of the segment. The definition of
value set decides whether the value entered for the corresponding segment is acceptable or not. We
have to define the value sets for each segment we planned to have in Account combination.
Navigation: General Ledger Super User Responsibility 
Setup à Financials à Flexifeilds à Validation à Sets

 2. Defining Accounting Flexifield Structure

Define an accounting flexfield structure using the Key Flexfield Segments form.
Caution 1:
Once we freeze our account structure in the Key Flexfield Segments window and begin using account
numbers in data entry, we should not modify the flexfield definition. Changing the existing flexfield
structure after flexfield data has been created can cause serious data inconsistencies. Modifying
your existing structures may also adversely affect the behavior of cross–validation rules and
shorthand aliases.
Caution 2:
Once you are done entering the segment information, click on flexfield qualifier and designate one
of your segments as the natural account segment and another as the balancing segment. You can
optionally designate a cost center segment and/or intercompany segment. This is the most important step.
Navigation: General Ledger Super User Responsibility 
Setup à Financials à Flexfield à Keyà Segments
 3:  Entering Segment Values
We enter segment values which is valid for our application or organization. The valid value can be a
phrase, word, abbreviation or numeric code. The valid value must conform to the criteria defined for
the respective valid set.
Caution :
If you plan on defining summary accounts or reporting hierarchies, you must define parent values as
well as child or detail values.
You can set up hierarchy structures for your segment values. Define parent values that include child
values. You can view a segment value’s hierarchy structure as well as move the child ranges from
one parent value to another. 
Navigation: General Ledger Super User Responsibility 
Setup à Financials à Flexfield à Keyà Values

 
4. Entering Account Combinations
This step is optional. Account combinations are part of Journal Transactions.
We can manually enter the new account combinations in a chart of accounts of a company using GL
Accounts form. Anyhow, if we have checked the “Allow dynamic inserts” check box in segments for
then we don’t need to worry about this step.
Navigation: General Ledger Super User Responsibility 
Setup à Account à Combinations
  
5. Creation of Account Alias:
This step is again optional. For input or Retrieve data about a transaction in Oracle General Ledger
requires the complete Account Combination. But generally the account combination is large and
very difficult to remember. Hence we define a short name (Alias) for the Account combination which
we use widely.
Detail Explanation of this step is available in another article. Please click the below link

For input or Retrieve data about a transaction in Oracle General Ledger requires the complete
Account Combination. But generally the account combination is large and very difficult to
remember. Hence we define a short name (Alias) for the Account combination which we use widely.
Let us see how we can create Account alias for the combination
“Vision Distribution.0110.000.100300.0000.00000.00000.0110” as “FuelAcc”
1. Navigation:

2. Shortand Alias Form

3. Click the Find icon in the toolbar to choose the Accounting Flexi field 

 
This will automatically populate the Application, structure, flexifield title, descriptin fields as below.

 4. Next populate the Shorthand related specifications like below,

 5. Next populate the tab “Aliases, Description” as below,

 6. Next we need to populate the tab “Aliases,Effective” as below

 
7. Next Step is to save and Transaction. While saving we will be shown  a note window to recompile
the flexifield using segments form. This is an important step to see our changes
 All the above information is stored in database table named FND_SHORTHAND_FLEX_ALIASES
6. Define Flexfield Security Rules
This step is to prevent group of users from accessing specific segment values while data entry and in
report parameters. This maintains the integrity of accounting data. The flexfield security rule is
effective only when assigned to an appropriate responsibility.
However to restrict all the users from accessing the particular segment value we need to disable
them in segment s form.
Navigation: General Ledger Super User Responsibility 
Setup à Financials à Flexfield à Keyà Security à Define

 
7. Define Cross Validation Rules
This step is required to maintain a consistent and valid set of account combination based on our
business requirements. Cross validation rule prevent users from entering invalid account
combinations. Cross validation rules validate only new account combinations hence it needs to be
implemented before entering the chart of accounts.
Navigation: General Ledger Super User Responsibility 
Setup à Financials à Flexfield à Keyà Rules