What is Chart of Accounts?

A chart of accounts is a list of accounts that a company owns, with its corresponding type as well as the account balance.

Each account is a unique record for a type of asset, liability, equity, revenue, or an expense. Chart of accounts is a tool to help a business organize their financial information within their general ledger under a variety of subcategories.

A medium sized enterprise may have include these subcategories under their asset account -

• Savings;
• Cash;
• Accounts receivable;
• Inventory;
• Vehicles;
• Buildings.

Company liabilities may consist of these categories -

• Credit cards;
• Accounts payable;
• Payroll liabilities.

Keep in mind these chart of accounts are only examples, you may use more or less subcategories. This will all depend on the size and complexity of your business.