What is the Chart of Accounts?

Overview

A chart of accounts is a list of ledger account names and associated numbers arranged in the order in which they normally appear in the financial statements. Use the Chart of Accounts to set up new accounts and modify existing accounts.

The Chart of Accounts includes all assets, liabilities, equities, revenues, and expenditures set up as GL accounts in the system.

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What is the Chart of Accounts?

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Chart of Accounts Overview (5m32s). Learn about the Chart of Accounts, activation date, copy an account, delete an account, termination date, budget notes, account notes,

Updated 25Aug2017

Double-entry accounting

Double-entry accounting is the standard accounting system for recording financial transactions.

Double-entry accounting uses five types of accounts and a relationship between them called the Accounting Equation or Balance Sheet Equation. The five types of accounts include assets, liabilities and equities as balance sheet accounts and revenues and expenditures (period accounts that close to zero at year-end) as Income Statement accounts.

Accounting Equation

The Accounting Equation states that

Assets = Liabilities + Equities

and must be true at any given point in time. All accounting entries are made up of at least two transactions where the sum of the debits must equal the sum of the credits.

Normal balance

The Normal Balance or normal way that an asset or expenditure is increased is with a debit (positive amount). The Normal Balance or normal way that a liability, equity, or revenue is increased is with a credit (negative amount).