What is Chart of Accounts?

drnaga

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Chart of accounts​

Chart of accounts - a list of all the accounts and their assigned account numbers in the ledger

Accounts are assigned numbers consisting of 2 or more digits. The number of digits used is dependent on how many accounts a company has in their ledger. A small company may use only 2 digits while a large corporation may use 5 digit account numbers.

The first digit is used to identify the main category in which the account falls under.
1 is used for Asset accounts
2 is used for Liability accounts
3 is used for Owner's Equity accounts
4 is used for Revenue accounts
5 is used for Expense accounts
The second digit indicates the sub classification of the account if there are any.
Asset Accounts
1 is used to represent Current Assets
2 is used to represent Plant Assets
3 is used to represent Investments
4 is used to represent Intangible Assets
Liability Accounts
1 is used for Current Liabilities
2 is used for Long Term Liabilities
Expense Accounts
1 is used for Selling Expenses
2 is used for General and Administrative Expenses
All other digits are used just to indicate the order in which the accounts are listed in the chart of accounts.
 
Chart of accounts​

Chart of accounts - a list of all the accounts and their assigned account numbers in the ledger

Accounts are assigned numbers consisting of 2 or more digits. The number of digits used is dependent on how many accounts a company has in their ledger. A small company may use only 2 digits while a large corporation may use 5 digit account numbers.

The first digit is used to identify the main category in which the account falls under.
1 is used for Asset accounts
2 is used for Liability accounts
3 is used for Owner's Equity accounts
4 is used for Revenue accounts
5 is used for Expense accounts
The second digit indicates the sub classification of the account if there are any.
Asset Accounts
1 is used to represent Current Assets
2 is used to represent Plant Assets
3 is used to represent Investments
4 is used to represent Intangible Assets
Liability Accounts
1 is used for Current Liabilities
2 is used for Long Term Liabilities
Expense Accounts
1 is used for Selling Expenses
2 is used for General and Administrative Expenses
All other digits are used just to indicate the order in which the accounts are listed in the chart of accounts.

Hey friend, thanks for sharing the information and explaining about the chart of accounts. Well, i am also adding a document which will give more detailed information on chart of accounts and hope it would help others.
 

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