Chart of Accounts Basics

Introduction to the Chart of Accounts

A Chart of Accounts is a list of all the names of the accounts found in the General Ledger with an account code allocated to it. Chart of Accounts is sometimes abbreviated to COA.

The Chart of Accounts simply sets out the structure of your accounts so that all similar accounts are grouped together. For example, balance sheet fixed asset accounts might have codes from 10-50, income accounts might have codes from 4000-4999.

A simple structure allows you to easily identify accounts and helps in the posting of transactions and the preparation of the trial balance and financial statements. It is usually best to use numbers for account codes as this will speed up the process of entering transactions as the numeric key pad can be used.

What Should a Chart of Accounts look like?

The Chart of Accounts should be split into balance sheet and profit & loss sections, each of which is then subdivided into groups (e.g. fixed assets, debtors, sales etc). Generally the most used accounts should be kept near the top of each group.

A sample Chart of Accounts is shown in the interactive table below.

Chart of Accounts Example Guide and Key

  1. Account Name: The name of the account in the general ledger
  2. Section: The Financial Statement in which the account appears
  3. BS: Balance Sheet
  4. P&L: Profit and Loss Account (Income Statement):
  5. Group: The type of account.
  6. Code: A suggested Account code for the account (chart of accounts numbers)

 

Chart of Accounts Example
Account Name Section Group Code
Freehold property BS Fixed Assets 10
Leasehold property BS Fixed Assets 11
Plant & Machinery BS Fixed Assets 20
Plant & m/cy depreciation BS Fixed Assets 21
Office equipment BS Fixed Assets 30
Office equipt depreciation BS Fixed Assets 31
Furniture & fixtures BS Fixed Assets 40
Furniture & fxts depreciation BS Fixed Assets 41
Motor Vehicles BS Fixed Assets 50
Motor vehicles depreciation BS Fixed Assets 51
Inventory BS Inventory 1001
Work in progress BS Inventory 1002
Finished goods BS Inventory 1003
Accounts Receivable Control BS Debtors 1100
Sundry debtors BS Debtors 1101
Other debtors BS Debtors 1102
Prepayments BS Debtors 1103
Bank current account BS Bank and Cash 1200
Bank deposit account BS Bank and Cash 1210
Building society account BS Bank and Cash 1220
Petty cash BS Bank and Cash 1230
Cash receipts BS Bank and Cash 1235
Company credit card BS Bank and Cash 1240
Credit card receipts BS Bank and Cash 1250
Accounts Payable Control BS Liabilities 2100
Sundry creditors BS Liabilities 2101
Other creditors BS Liabilities 2102
Accruals BS Liabilities 2109
Sales Tax Control BS Liabilities 2200
Purchase Tax Control BS Liabilities 2201
VAT liability BS Liabilities 2202
PAYE BS Liabilities 2210
National Insurance BS Liabilities 2211
Net wages control BS Liabilities 2220
Pension fund BS Liabilities 2230
Loans BS Liabilities 2300
Hire purchase BS Liabilities 2310
Corporation tax BS Liabilities 2320
Mortgages BS Liabilities 2330
Preference shares BS Capital 3010
Reserves BS Reserves 3100
Undistributed reserves BS Reserves 3101
Profit & Loss Account BS Reserves 3200
Sales type A P&L Sales 4000
Sales type B P&L Sales 4001
Sales type C P&L Sales 4002
Discounts allowed P&L Sales 4009
Sales type D P&L Sales 4100
Sales type E P&L Sales 4101
Sale of Assets P&L Other Income 4200
Credit charges P&L Other Income 4400
Miscellaneous income P&L Other Income 4900
Royalties received P&L Other Income 4901
Commissions received P&L Other Income 4902
Insurance claims P&L Other Income 4903
Rent income P&L Other Income 4904
Distribution & carriage P&L Other Income 4905
Materials purchased P&L Purchases 5000
Materials imported P&L Purchases 5001
Miscellaneous purchases P&L Purchases 5002
Packaging P&L Purchases 5003
Discounts taken P&L Purchases 5009
Carriage P&L Purchases 5100
Import duty P&L Purchases 5101
Transport insurance P&L Purchases 5102
Opening stock P&L Purchases 5200
Closing stock P&L Purchases 5201
Productive Labour P&L Direct labour 6000
Cost of sales labour P&L Direct labour 6001
Sub-contractors P&L Direct costs 6002
Sales commissions P&L Marketing 6100
Sales promotion P&L Marketing 6200
Advertising P&L Marketing 6201
Gifts & samples P&L Marketing 6202
PR P&L Marketing 6203
Miscellaneous expenses P&L Miscellaneous 6900
Gross wages P&L Overheads 7000
Directors salaries P&L Overheads 7001
Directors remuneration P&L Overheads 7002
Staff salaries P&L Overheads 7003
Wages regular P&L Overheads 7004
Wages casual P&L Overheads 7005
Employers NI P&L Overheads 7006
Employers pensions P&L Overheads 7007
Recruitment expenses P&L Overheads 7008
Adjustments P&L Overheads 7009
SSP reclaimed P&L Overheads 7010
SMP reclaimed P&L Overheads 7011
Rent P&L Overheads 7100
Water rates P&L Overheads 7102
General rates P&L Overheads 7103
Premises insurance P&L Overheads 7104
Electricity P&L Overheads 7200
Gas P&L Overheads 7201
Oil P&L Overheads 7202
Other heating costs P&L Overheads 7203
Motor fuel P&L Overheads 7300
Motor repairs P&L Overheads 7301
Licenses P&L Overheads 7302
Vehicle insurance P&L Overheads 7303
Miscellaneous motor P&L Overheads 7304
Scale charges P&L Overheads 7350
Travelling P&L Overheads 7400
Car hire P&L Overheads 7401
Hotels P&L Overheads 7402
UK Entertainment P&L Overheads 7403
Overseas Entertainment P&L Overheads 7404
Overseas travelling P&L Overheads 7405
Subsistence P&L Overheads 7406
Printing P&L Overheads 7500
Postage & carriage P&L Overheads 7501
Telephone P&L Overheads 7502
Telex/telegram/fax P&L Overheads 7503
Office stationery P&L Overheads 7504
Books etc P&L Overheads 7505
Legal fees P&L Overheads 7600
Audit & accountancy fees P&L Overheads 7601
Consultancy fees P&L Overheads 7602
Professional fees P&L Overheads 7603
Equipment hire P&L Overheads 7700
Office m/c maintenance P&L Overheads 7701
Repairs & renewals P&L Overheads 7800
Cleaning P&L Overheads 7801
Laundry P&L Overheads 7802
Premises expenses P&L Overheads 7803
Bank interest paid P&L Overheads 7900
Bank charges P&L Overheads 7901
Currency charges P&L Overheads 7902
Loan interest paid P&L Overheads 7903
HP interest P&L Overheads 7904
Credit charges P&L Overheads 7905
Exchange rate variance P&L Overheads 7906
Depreciation P&L Depreciation 8000
Plant & m/cy depreciation P&L Depreciation 8001
Furniture/fit. depreciation P&L Depreciation 8002
Vehicle depreciation P&L Depreciation 8003
Office equip. depreciation P&L Depreciation 8004
Bad debt write off P&L Bad debts 8100
Bad debt provision P&L Bad debts 8102
Donations P&L Sundry expenses 8200
Subscriptions P&L Sundry expenses 8201
Clothing costs P&L Sundry expenses 8202
Training costs P&L Sundry expenses 8203
Insurance P&L Sundry expenses 8204
Refreshments P&L Sundry expenses 8205
Suspense account P&L Suspense 9998
Mispostings account P&L Mispostings 9999

Notice how each account is classified as balance sheet or profit and loss and then further classified into a group such as for example debtors. The account names will depend on your type of business, but the classification and grouping should be similar to the table above.

When allocating account codes (chart of accounts numbers) don’t forget to leave space for additional accounts and codes to be inserted in a group at a later stage. For example the sales codes run from 4000 to 4199 so there is plenty of room to incorporate new categories of sales if needed.

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