Can I make my own chart of accounts?

Can I make my own chart of accounts?

To make a chart of accounts, you’ll need to first create account categories relevant to your business, and then assign a four-digit numbering system to the accounts you create. While making a chart of accounts can be time consuming, it’s an important tool for understanding the financial health of your business.

What should be in my chart of accounts?

The Chart of Accounts usually includes at least three columns:

  1. Account: Lists the account names.
  2. Type: Lists the type of account — asset, liability, equity, income, cost of goods sold, or expense.
  3. Description: Contains a description of the type of transaction that should be recorded in the account.

How should I number my chart of accounts?

For a retail firm, asset accounts start with number one, liability accounts start with number two, stockholders’ equity accounts start with number three, income accounts start with number four and expense accounts start with number five. The full chart of accounts list with definition is available at Accounting Coach.

How should chart of accounts be numbered?

However, a common coding scheme is as follows:

  1. Assets – Account codes 100-199.
  2. Liabilities – 200-299.
  3. Equity accounts – 300-399.
  4. Revenues – 400-499.
  5. Expenses – 500-599.

Is the chart of accounts only assets?

A company’s Chart of Accounts is a list of all Asset, Liability, Equity, Revenue, and Expense accounts included in the company’s General Ledger. The number of accounts included in the chart of accounts varies depending on the size of the company.

How do I clean up my chart of accounts?

Five primary ways to maintain a clean chart are as follows:

  1. Sorting.
  2. Make Accounts Inactive.
  3. Make Vendors Inactive (or Products, Services etc)
  4. Merge Accounts.
  5. Map New Products and Services to Accounts.

Is chart of accounts the same as general ledger?

There are two types of ledgers: the general ledger, which contains information on all the company accounts, while the subsidiary ledgers contain information about specific individual accounts. The chart of accounts is a listing of all accounts that a company has.