Chart of accounts

The chart of accounts is listing of all the accounts in the

general ledger; each account accompanied by a reference
number. To set up a chart of accounts; one first needs to
define the various accounts to be use by the businesses;
Each account should have a number to identify it. A chart
of a accounts uses a numbering system to organize the
data. All the data on reports your print comes out in
numerical order. For very small businesses; three digits
may suffice for the account number; though more digits
are highly desirable in order to allow for new accounts to
be added as business grows. With more digits, New
accounts can be added while maintaining the logical order.
Complex businesses may have thousands of accounts
require longer account reference numbers. It is
worthwhile to put thought into assigning the account
numbers in logical way (Block Code Method, Group Code
Method, Decimal Code Method,…), and to follow any
specific industry standards. An example of how the digits
:might be coded is shown in this list
Account Numbering (Block Code Method)
asset accounts 1000-1999
liability accounts 2000-2999
equity accounts 3000-4000
revenue accounts 4000-4999
cost of good sold 5000-5999
expense accounts 6000-6999
other revenue 7000-7999
other expense 8000-8999
By separating each account by several numbers, many
accounts can be added between any two while
.maintaining the logical order
Defining accounts
Different types of businesses will have different accounts.
For example, to report the cost of goods sold a
manufacturing business will have accounts for it various
manufacturing costs whereas a retailer will have accounts
for purchase of its stock merchandise. Many industry
publish recommended charts of accounts for their
respective industries in order to establish a consistent
standard of comparison among firms in their industry.
Accounting software packages often come with a selection
of predefined account charts for various types of
.businesses
There are a trade-off between simplicity and ability to
make historical comparisons. Initially keeping the number
of accounts to a minimum has the advantage of making
the accounting system simple. Starting with small number
of accounts, as certain accounts acquired significant
balances they would be split into smaller, more specific
accounts. However, following this strategy makes it more
difficult to generate consistent historical comparisons. For
example, if the accounting system is set up with a
miscellaneous expenses account that account that later is
broken into more detailed accounts, it then would be
difficult to compare those detailed expenses with past
expenses of the same type. In this respect, there is an
advantage in organizing the chart of accounts with a
.higher initial level of detail
Some accounts must be included due to tax reporting
requirements. For example in the U.S the IRS requires
that travel, entertainment, advertising, and several other
expenses be tracked in individual accounts. One should
check appropriate tax regulations and generate a
.compete list of such required accounts
Other accounts should be set up according to vendor. If
the business has more than one checking account, for
example, the chart of accounts might include an account
for each of them
Account order
Balance sheet accounts tend to follow a standard that lists
the most liquid assets first. Revenue and expenses
accounts tend to follow the standard of first listing the
items most closely related to operations of the business.
For example, sales would be listed before non-operating
income, in some cases, part or all the expenses accounts
.simply are listed in alphabetical order
Sample chart of accounts
The following is an example of some of the accounts that
might be included in chart of accounts
Sample chart of accounts (Block Code Method)
Assets accounts
100 Petty cash
0
101 Cash on hand (e.g in cash reisters)
0
102 Regular checking account
0
103 Payroll checking account
0
104 Saving account
0
105 Special account
0
106 Investments – money market
0
107 Investments- certificates
0
110 Accounts receivable
0
114 Other receivables
0
115 Allowance for doubtful accounts
0
120 Raw materials inventory
0
120 Supplies inventory
5
121 Work in progress inventory
0
121 Finished goods inventory
0
140 Prepaid expenses
0
141 Employee advances
0
142 Notes receivable- current
0
143 Prepaid interest
0
147 Other current assets
0

Fixed Assets
150 Furniture and fixtures
0
151 Equipment
0
152 Vehicles
0
153 Other depreciable property
0
154 Leasehold improvements
0
155 Buildings
0
156 Building improvements
0
169 Land
0
170 Accumulated deprecation,
0 Furniture and fixtures
171 Accumulated deprecation,
0 Equipment
172 Accumulated deprecation, Vehicles
0
173 Accumulated deprecation, others
0
174 Accumulated deprecation,
0 Leasehold
175 Accumulated deprecation,
0 Buildings
176 Accumulated deprecation, Building
0 improvements
Others Assets
190 Deposits
0
191 Organization costs
0
191 Accumulated Amortization,
5 Organization costs
192 Notes receivable, non-current
0
199 Other non-current Assets
0

Liabilities Accounts
Current Liabilities

200 Accounts Payable

0
230 Accrued expenses
0
231 Sales Tax Payable
0
232 Wages Payable
0
233 Health Insurance Payable
5
234 Payroll Taxes Payable
0
239 Income Taxes Payable
0
242 Current portion of Long-
0 term debt
244 Deposits from customers
0
248 Other current liabilities
0
Long-term liabilities
270 Notes payable
0
270 Land payable
2
270 Equipment payable
4
270 Vehicles payable
6
270 Bank loans payables
8
271 Deferred revenue
0
274 Other long-term liabilities
0

Equity accounts
301 Stated capital
0
302 Capital Surplus
0
303 Retained Earnings
0
Revenue accounts
400 Sales
0
406 Interest Income
0
408 Other income
0
454 Finance charge Income
0
455 Shipping charges
0 Reimbursed
480 Sales Returns and
0 Allowances
490 Sales Discounts
0
Cost Of Goods Sold
500 Product Cost
0
502 Raw Material Purchases
0
510 Direct Labor Costs
0
515 Indirect Labor Costs
0
520 Heat And Power
0
525 Commission
0
530 Miscellaneous Factory Costs
0
570 Cost Of Goods Sold, Salaries
0 and Wages
573 Cost Of Goods Sold,
0 Contract Labor
575 Cost Of Goods Sold, Freight
0
580 Cost Of Goods Sold, Other
0
585 Inventory Adjustments
0
590 Purchase Returns and
0 Allowances
595 Purchase Discount
0
Expenses
600 Default purchase Expense
0
601 Advertising Expense
0
605 Amortization Expense
0
610 Auto Expense
0
615 Bad debt Expense
0
620 Bank Fees
0
625 Cash Over and Short
0
630 Charitable Contributions Expense
0
635 Commissions and Fees Expense
0
640 Depreciation Expense
0
645 Dues and Subscriptions
0
650 Employee Benefit Expense, Health Insurance
0
651 Employee Benefit Expense, Pension plans
0
652 Employee Benefit Expense, Profit Sharing
0
653 Employee Benefit Expense, Others
0
655 Freight Expense
0
660 Gifts Expense
0
665 Income Tax Expense
0
670 Insurance Expense, Product Liability
0
671 Insurance Expense, Vehice
0
675 Interest Expense
0
680 Laundry and Dry Cleaning Expense
0
685 Legal and Professional Expense
0
690 Licenses Expense
0
695 Loss on NSF Checks
0
700 Maintenance Expense
0
705 Meals and Entertainment Expense
0
710 Office Expense
0
720 Payroll Tax Expense
0
725 Penalties and Fines Expense
0
735 Postage Expense
0
740 Rent or Lease Expense
0
745 Repair and Maintenance Expense, Office
0
746 Repair and Maintenance Expense, Vehicles
0
755 Supplies Expense, Office
0
760 Telephone Expense
0
760 Training Expense
0
765 Travel Expense
0
770 Salaries Expense, Officers
0
775 Wages Expense
0
780 Utilities Expense
0
890 Other Expense
0
900 Gain/Loss on sale Of assets
0

Group Code Method

General info tab Relation Other info tab
info tab
Code Name Father Account nature Account type
10000 Assets ______ Debit only account Balance sheet
11000 Current assets 10000 Debit only account Balance sheet
11100 General cash 11000 Debit only account Balance sheet
11110 Cash NIS 11100 Debit only account Balance sheet
11200 Banks 11000 Debit only account Balance sheet
11210 Bank of Palestine 12200 Debit only account Balance sheet
11220 Islamic bank 11200 Debit only account Balance sheet
11300 Debtors 11000 Debit only account Balance sheet
11800 Expenses prepaid 11000 Debit only account Balance sheet
11810 Prepaid Rent 11800 Debit only account Balance sheet
11900 Other assets 11000 Debit only account Balance sheet
11910 Withheld 11900 Debit only account Balance sheet
11920 VAT 11900 Debit only account Balance sheet
12000 Fixed assets 10000 Debit only account Balance sheet
12100 Machinery 12000 Debit only account Balance sheet
12200 Furniture 12000 Debit only account Balance sheet
20000 Liabilities Credit only account Balance sheet
21000 current Liabilities 200000 Credit only account Balance sheet
21100 Loans 21000 Credit only account Balance sheet
21110 Palestine loan 21100 Credit only account Balance sheet
21200 Accrued taxes 21000 Credit only account Balance sheet
21210 VAT Tax Payable 21200 Credit only account Balance sheet
21220 Payroll Taxes Payable 21200 Credit only account Balance sheet
21230 Income Taxes Payable 21200 Credit only account Balance sheet
21300 Creditors 21000 Credit only account Balance sheet
30000 Equity Credit only account Balance sheet
31000 Capital 30000 Credit only account Balance sheet
31100 X capital 31000 Credit only account Balance sheet
31200 Y capital 31000 Credit only account Balance sheet
40000 Cost of goods Debit only account Trade
41000 Begin inventory 40000 Debit only account Trade
42000 Purchases 40000 Debit only account Trade
43000 Purchases Returns 40000 Credit only account Trade
44000 Purchases Discount 40000 Credit only account Trade
60000 Revenue Credit only account Trade
61000 Sales 60000 Credit only account Trade
62000 Sales Returns 60000 Debit only account Trade
63000 Sales Discount 60000 Debit only account Trade