What is chart of accounts?

A chart of accounts is the organised list of every account a business records its transactions in, arranged by type: assets, liabilities, equity, revenue and expenses. Each account has a code that shows its type and place in the tree — assets starting with 1 and revenue with 4, for example. A well-designed chart makes reports clear and years comparable.

Accounting

Chart of accounts

A chart of accounts is the organised list of every account a business records its transactions in, arranged by type: assets, liabilities, equity, revenue and expenses.

Explained

Each account has a code that shows its type and place in the tree — assets starting with 1 and revenue with 4, for example. A well-designed chart makes reports clear and years comparable.

Related terms

General ledgerThe general ledger collects every posted movement for each account, and gives the balance of any account at any date.
Double-entry bookkeepingDouble-entry bookkeeping records every financial effect in at least two accounts — a debit and a credit of the same amount.

All terms