Chart of Accounts
Chart of Accounts is a list of General Ledger account’s names and numbers arranged in the order in which they appear in the Financial Statement. Account is formal record that represents certain resources and claims to such resources, transactions or other events that result in changes to those resources and claims. This chart of accounts serves as a useful source for locating a given account within the ledger. The numbering system for the chart of accounts must leave room for new accounts. A range of numbers is assigned to each financial statement category.
Assets are economic resources of business, for instance, Machinery, Furniture, Leasehold Premises, Building, Equipment, Plant, Account Receivables, Note Receivables, Land, Car, Marketable Securities, Cash, Goodwill, Leasehold building, Bank, Computer, Fixture and Fittings, Copy Rights, Leasehold land, Inventories, Loan to employees, Prepaid items etc. etc.
Drawings Account is any withdrawal made by owner in the form of Physical assets like furniture, inventory etc. or in the form of financial asset like cash etc.
Expenses are outflows, for instance, Wages, Salaries, Rent, Octri, Freight, Carriage, Repairs, Maintenance, Discount, Rebate, Transportation, Commission, Miscellaneous Expense, Entertainment Expense (which have debit balance or paid).
Examples of Liabilities are Note Payable, Account Payable, Bank Loan, Debenture, Bonds, Mortgage Loan and any outstanding or Payable and Unearned.
Owner’s Equity is define as any assets invested by owner may be in form of monetary or physical assets.
Revenue Accounts such as Sales, fees etc. all accounts have credit balance like commission (Cr) or received like discount received.
>> Read Types of Accounts.