Chart of Accounts

Online Accounting

Accounting Training: Chart of Accounts

The chart of accounts lists every general ledger account currently available to the business along with its corresponding account number.

Whether the business uses a manual accounting system or an accounting software system, accountants and managers use the chart of accounts to reference each general ledger account to accurately track general ledger account activity throughout the accounting cycle.

Accounting systems categorize the accounts into five major groups:

Asset Accounts	100-199
Liability Accounts	200-299
Equity Accounts	300-399
Revenue and Gain Accounts	400-499
Expense and Loss Accounts	500-599

For example, Sunny Sunglasses Shop lists its general ledger accounts in the chart of accounts as follows:

Sunny Sunglasses Shop
Chart of Accounts

The chart of accounts classifies all of the general ledger accounts for the company into the five major groups listed above.

The numerical sequence is typically designed to leave plenty of numbers available for new accounts within each classification so that the company can keep its current account numbers intact without needing to change accounts during future growth.

Contra accounts, such as the allowance for doubtful accounts or accumulated depreciation accounts, are categorized with its main corresponding account. The contra account adjusts its corresponding asset or liability account and is discussed in the adjusting entries step of the accounting cycle.

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