Chart of Accounts
Also called: COA, account master
What is Chart of Accounts?
The chart of accounts is the master list of every account a business records transactions against, grouped into assets, liabilities, equity, income and expenses, usually with a numeric code per account.
Why Chart of Accounts matters
The chart decides what your reports can tell you. Lump every purchase into one expense account and no report will ever explain where the money went.
How Chart of Accounts works in practice
Keep it as short as the business allows while separating anything you want to see on a report. Leave gaps in the numbering so new accounts slot in without renumbering the whole list.
Worked example
A common convention runs 1000s for assets, 2000s liabilities, 3000s equity, 4000s income and 5000s expenses.
Frequently asked questions
Enough to answer your recurring questions and no more — usually a few dozen, not hundreds.