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 income statement sections, each of which is then subdivided into groups (e.g. fixed assets, accounts receivable, 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. IS: Income Statement (Profit and Loss Account):
  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
Retained earnings BS Reserves 3100
Profit & Loss Account BS Reserves 3200
Sales type A IS Sales 4000
Sales type B IS Sales 4001
Sales type C IS Sales 4002
Discounts allowed IS Sales 4009
Sales type D IS Sales 4100
Sales type E IS Sales 4101
Sale of Assets IS Other Income 4200
Credit charges IS Other Income 4400
Miscellaneous income IS Other Income 4900
Royalties received IS Other Income 4901
Commissions received IS Other Income 4902
Insurance claims IS Other Income 4903
Rent income IS Other Income 4904
Distribution & carriage IS Other Income 4905
Materials purchased IS Purchases 5000
Materials imported IS Purchases 5001
Miscellaneous purchases IS Purchases 5002
Packaging IS Purchases 5003
Discounts taken IS Purchases 5009
Carriage IS Purchases 5100
Import duty IS Purchases 5101
Transport insurance IS Purchases 5102
Opening stock IS Purchases 5200
Closing stock IS Purchases 5201
Productive Labour IS Direct labour 6000
Cost of sales labour IS Direct labour 6001
Sub-contractors IS Direct costs 6002
Sales commissions IS Marketing 6100
Sales promotion IS Marketing 6200
Advertising IS Marketing 6201
Gifts & samples IS Marketing 6202
PR IS Marketing 6203
Miscellaneous expenses IS Miscellaneous 6900
Gross wages IS Overheads 7000
Directors salaries IS Overheads 7001
Directors remuneration IS Overheads 7002
Staff salaries IS Overheads 7003
Wages regular IS Overheads 7004
Wages casual IS Overheads 7005
Employers NI IS Overheads 7006
Employers pensions IS Overheads 7007
Recruitment expenses IS Overheads 7008
Adjustments IS Overheads 7009
SSP reclaimed IS Overheads 7010
SMP reclaimed IS Overheads 7011
Rent IS Overheads 7100
Water rates IS Overheads 7102
General rates IS Overheads 7103
Premises insurance IS Overheads 7104
Electricity IS Overheads 7200
Gas IS Overheads 7201
Oil IS Overheads 7202
Other heating costs IS Overheads 7203
Motor fuel IS Overheads 7300
Motor repairs IS Overheads 7301
Licenses IS Overheads 7302
Vehicle insurance IS Overheads 7303
Miscellaneous motor IS Overheads 7304
Scale charges IS Overheads 7350
Travelling IS Overheads 7400
Car hire IS Overheads 7401
Hotels IS Overheads 7402
UK Entertainment IS Overheads 7403
Overseas Entertainment IS Overheads 7404
Overseas travelling IS Overheads 7405
Subsistence IS Overheads 7406
Printing IS Overheads 7500
Postage & carriage IS Overheads 7501
Telephone IS Overheads 7502
Telex/telegram/fax IS Overheads 7503
Office stationery IS Overheads 7504
Books etc IS Overheads 7505
Legal fees IS Overheads 7600
Audit & accountancy fees IS Overheads 7601
Consultancy fees IS Overheads 7602
Professional fees IS Overheads 7603
Equipment hire IS Overheads 7700
Office m/c maintenance IS Overheads 7701
Repairs & renewals IS Overheads 7800
Cleaning IS Overheads 7801
Laundry IS Overheads 7802
Premises expenses IS Overheads 7803
Bank interest paid IS Overheads 7900
Bank charges IS Overheads 7901
Currency charges IS Overheads 7902
Loan interest paid IS Overheads 7903
HP interest IS Overheads 7904
Credit charges IS Overheads 7905
Exchange rate variance IS Overheads 7906
Depreciation IS Depreciation 8000
Plant & m/cy depreciation IS Depreciation 8001
Furniture/fit. depreciation IS Depreciation 8002
Vehicle depreciation IS Depreciation 8003
Office equip. depreciation IS Depreciation 8004
Bad debt write off IS Bad debts 8100
Bad debt provision IS Bad debts 8102
Donations IS Sundry expenses 8200
Subscriptions IS Sundry expenses 8201
Clothing costs IS Sundry expenses 8202
Training costs IS Sundry expenses 8203
Insurance IS Sundry expenses 8204
Refreshments IS Sundry expenses 8205
Suspense account IS Suspense 9998
Mispostings account IS Mispostings 9999

Notice how each account is classified as balance sheet or income statement and then further classified into a group such as for example accounts receivable. 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.

Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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