Chart of Accounts

What is a Chart of Accounts?

A chart of accounts is a list of all accounts available for recording transactions in your general ledger. It is organized by account type and forms the foundation of your accounting system.

Account Types

  • Assets: Resources owned by your business (bank accounts, inventory, equipment)
  • Liabilities: Amounts owed by your business (loans, accounts payable)
  • Equity: Owner's investment and retained earnings
  • Income: Revenue from sales and services
  • Expenses: Costs incurred in running the business

Creating Your Chart of Accounts

When setting up Quick Accounting, you'll create your chart of accounts based on your business structure and accounting needs.

Steps to Create a Chart of Accounts

  1. Identify your business structure and accounting needs
  2. List all asset accounts (cash, bank, inventory, etc.)
  3. List all liability accounts (loans, payables, etc.)
  4. List all equity accounts (capital, retained earnings, etc.)
  5. List all income accounts (sales, services, etc.)
  6. List all expense accounts (salaries, rent, utilities, etc.)
  7. Assign account numbers to each account
  8. Enter accounts into Quick Accounting

Account Numbering

Account numbers help organize and identify accounts in your chart of accounts. Common numbering schemes include:

  • 1000-1999: Assets
  • 2000-2999: Liabilities
  • 3000-3999: Equity
  • 4000-4999: Income
  • 5000-5999: Expenses

Best Practices

  • Plan your chart of accounts carefully before entering data
  • Use consistent account numbering
  • Include all necessary accounts for your business
  • Avoid creating too many accounts (keep it manageable)
  • Review and update your chart of accounts annually
  • Document your account structure for reference

Common Account Examples

Assets

  • Cash
  • Bank Account
  • Accounts Receivable
  • Inventory
  • Equipment

Liabilities

  • Accounts Payable
  • Short-term Loan
  • Long-term Loan
  • Sales Tax Payable

Equity

  • Owner's Capital
  • Retained Earnings

Income

  • Sales Revenue
  • Service Revenue
  • Interest Income

Expenses

  • Salaries & Wages
  • Rent
  • Utilities
  • Office Supplies
  • Depreciation

Managing Your Chart of Accounts

Once created, you can manage your chart of accounts by:

  • Adding new accounts as needed
  • Editing account details
  • Deactivating unused accounts
  • Viewing account balances
  • Generating account reports