Chart of accounts

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A chart of accounts (COA) is a list of financial accounts set up, usually by an accountant, for an organization, and available for use by the bookkeeper for recording transactions in the organization's general ledger. Accounts may be added to the chart of accounts as needed; they would not generally be removed, especially if any transaction had been posted to the account or if there is a non-zero balance.

Accounts are usually grouped into categories, such as assets, liabilities, equity, revenue and expenses.

Accounts may be associated with an identifier (account number) and a caption or header and are coded by account type. In computerized accounting systems with computable quantity accounting, the accounts can have a quantity measure definition. Account numbers can use numerical, alphabetic, or alpha-numeric characters. However, in many computerized environments, like the SIE format, only numerical identifiers are allowed. The structure and headings of accounts should assist in consistent posting of transactions. Each nominal ledger account is unique, which allows its ledger to be located. The accounts are typically arranged in the order of the customary appearance of accounts in the financial statements: balance sheet accounts followed by profit and loss accounts.

The charts of accounts can be picked from a standard chart of accounts, like the BAS in Sweden. In some countries, charts of accounts are defined by the accountant from a standard general layouts or as regulated by law. However, in most countries it is entirely up to each accountant to design the chart of accounts.

Nomenclature, classification and codification[edit]

Each account in the chart of accounts is typically assigned a name. Accounts may also be assigned a unique account number by which the account can be identified. Account numbers may be structured to suit the needs of an organization, such as digit/s representing a division of the company, a department, the type of account, etc. The first digit might, for example, signify the type of account (asset, liability, etc.). In accounting software, using the account number may be a more rapid way to post to an account, and allows accounts to be presented in numeric order rather than alphabetic order.

International aspects and accounting information interchange - Charts of accounts and tax harmonisation issues[edit]

Most countries have no national standard charts of accounts, public or privately organized. In many countries, there are general guidelines, and in France the guidelines have been codified in law. The European Commission has spent a great deal of effort on administrative tax harmonisation, and this harmonization is the main focus of the latest version of the EU VAT directive, which aims to achieve better harmonization and support electronic trade documents, such as electronic invoices used in cross border trade, especially within the European Union Value Added Tax Area. However, there is still a great deal to be done to realize a standard chart of accounts and international accounting information interchange structure.

Trial balance[edit]

The trial balance is a list of the active general ledger accounts with their respective debit and credit balances. A balanced trial balance does not guarantee that there are no errors in the individual ledger entries.

Types of accounts[edit]

  1. Asset accounts represent the different types of economic resources owned or controlled by an entity. Common examples of asset accounts include cash in hand, cash in bank, receivables, inventory, prepaid expenses, land, structures, equipment, patents, copyrights, licenses, etc. Goodwill is different from other asset accounts in that goodwill, unlike other assets, is not used in operations and cannot be sold, licensed or transfered.
  2. Liability accounts represent the different types of economic obligations of an entity, such as accounts payable, bank loans, bonds payable, and accrued expenses.[1]
  3. Equity accounts represent the residual ownership of an entity (the value of assets after deducting the value of all liabilities). Equity accounts include common stock, paid-in capital, and retained earnings. The type and captions used for equity accounts are dependent on the type of entity.[2] While gains are generally included in income, they are not considered revenue.
  4. Revenue or income accounts represent the company's earnings and common examples include sales, service revenue and interest income. [3] Revenue and Gains are subclassifications of Income.
  5. Expense accounts represent a company's costs of doing business. Common examples include wages, salaries, materials, utilities, rent, depreciation, interest, insurance, etc.[4]
  6. Contra-accounts are accounts with negative balances that offset other balance sheet accounts. Examples are accumulated depreciation (offset against fixed assets), and the allowance for bad debts (offset against accounts receivable). Deferred interest is also offset against receivables rather than being classified as a liability.

Example Chart of Accounts[edit]

Sample Chart of Accounts[edit]

A chart of accounts has sections for the balance sheet (assets, liabilities, equity) and the income and expense report (revenue, expenses, other revenue and expenses, and intercompany and related party accounts).

Account # -- Account Title[5] -- Debit (Dr) or Credit (Cr)

1.0.0 Assets Dr

  • 1.1.0 Cash And Financial Assets Dr
  • * 1.1.1 Cash and Cash Equivalents Dr
  • * 1.1.2 Financial Assets (Investments) Dr
  • * 1.1.3 Restricted Cash and Financial Assets Dr
  • * 1.1.4 Additional Financial Assets and Investments Dr
  • 1.2.0 Receivables And Contracts Dr
  • * 1.2.1 Accounts, Notes And Loans Receivable Dr
  • * 1.2.2 Contracts Dr
  • * 1.2.3 Nontrade And Other Receivables Dr
  • 1.3.0 Inventory Dr
  • * 1.3.1 Merchandise Dr
  • * 1.3.2 Raw Material, Parts And Supplies Dr
  • * 1.3.3 Work In Process Dr
  • * 1.3.4 Finished Goods Dr
  • * 1.3.5 Other Inventory Dr
  • 1.4.0 Accruals And Additional Assets Dr
  • * 1.4.1 Prepaid Expense Dr
  • * 1.4.2 Accrued Income Dr
  • * 1.4.3 Additional Assets Dr
  • 1.5.0 Property, Plant And Equipment Dr
  • * 1.5.1 Land And Land Improvements Dr
  • * 1.5.2 Buildings, Structures And Improvements Dr
  • * 1.5.3 Machinery And Equipment Dr
  • * 1.5.4 Furniture And Fixtures Dr
  • * 1.5.5 Other Property, Plant And Equipment Dr
  • * 1.5.6 Construction In Progress Dr
  • 1.6.0 Property, Plant And Equipment Accumulated Depreciation And Depletion (Cr)
  • * 1.6.1 Accumulated Depletion (Cr)
  • * 1.6.2 Accumulated Depreciation (Cr)
  • 1.7.0 Intangible Assets (Excluding Goodwill) Dr
  • * 1.7.1 Intellectual Property Dr
  • * 1.7.2 Computer Software Dr
  • * 1.7.3 Trade And Distribution Assets Dr
  • * 1.7.4 Contracts And Rights Dr
  • * 1.7.5 Right To Use Assets (Classified By Type) Dr
  • * 1.7.6 Other Intangible Assets Dr
  • * 1.7.7 Acquisition In Progress Dr
  • 1.8.0 Intangible Assets Accumulated Amortization (Cr)
  • 1.9.0 Goodwill Dr

2.0.0 Liabilities (Cr)

  • 2.1.0 Payables (Cr)
  • * 2.1.1 Trade Payables (Cr)
  • * 2.1.2 Dividends Payable (Cr)
  • * 2.1.3 Interest Payable (Cr)
  • * 2.1.4 Other Payables (Cr)
  • 2.2.0 Accruals And Other Liabilities (Cr)
  • * 2.2.1 Accrued Expenses (Including Payroll) (Cr)
  • * 2.2.2 Deferred Income (Unearned Revenue) (Cr)
  • * 2.2.3 Accrued Taxes (Other Than Payroll) (Cr)
  • * 2.2.4 Other (Non-Financial) Liabilities (Cr)
  • 2.3.0 Financial Liabilities (Cr)
  • * 2.3.1 Notes Payable (Cr)
  • * 2.3.2 Loans Payable (Cr)
  • * 2.3.3 Bonds (Debentures) (Cr)
  • * 2.3.4 Other Debts And Borrowings (Cr)
  • * 2.3.5 Lease Obligations (Cr)
  • * 2.3.6 Derivative Financial Liabilities (Cr)
  • * 2.3.7 Other Financial Liabilities (Cr)
  • 2.4.0 Provisions (Contingencies) (Cr)
  • * 2.4.1 Customer Related Provisions (Cr)
  • * 2.4.2 Ligation And Regulatory Provisions (Cr)
  • * 2.4.3 Other Provisions (Cr)

3.0.0 Equity (Cr)

  • 3.1.0 Owners Equity (Attributable To Owners Of Parent) (Cr)
  • * 3.1.1 Equity At par (Issued Capital) (Cr)
  • * 3.1.2 Additional Paid-in Capital (Cr)
  • 3.2.0 Retained Earnings Dr / (Cr)
  • * 3.2.1 Appropriated (Cr)
  • * 3.2.2 Unappropriated (Cr)
  • * 3.2.3 Deficit Dr
  • * 3.2.4 In Suspense Zero
  • 3.3.0 Accumulated OCI (US GAAP) Dr / (Cr)
  • 3.4.0 Other Reserves (IFRS) Dr / (Cr)
  • 3.5.0 Other Equity Items Dr / (Cr)
  • * 3.5.1 ESOP Related Items Dr / (Cr)
  • * 3.5.2 Subscribed Stock Receivables Dr
  • * 3.5.3 Treasury Stock (Not Extinguished) Dr
  • * 3.5.4 Miscellaneous Equity (Cr)
  • 3.6.0 Noncontrolling (Minority) Interest (Cr)

4.0.0 Revenue (Cr)

  • 4.1.0 Recognized Point Of Time (Cr)
  • * 4.1.1 Goods (Cr)
  • * 4.1.2 Services (Cr)
  • 4.2.0 Recognized Over Time (Cr)
  • * 4.2.1 Products (Cr)
  • * 4.2.2 Services (Cr)
  • 4.3.0 Adjustments Dr
  • * 4.3.1 Variable Consideration Dr
  • * 4.3.2 Consideration Paid (Payable) To Customers Dr
  • * 4.3.3 Other Adjustments Dr

5.0.0 Expenses Dr

  • 5.1.0 Expenses Classified By Nature Dr
  • * 5.1.1 Merchandise, Material, Parts And Supplies Dr
  • * 5.1.2 Employee Benefits Dr
  • * 5.1.3 Services Dr
  • * 5.1.4 Rent, Depreciation, Amortization And Depletion Dr
  • * 5.1.5 Increase (Decrease) In Inventories Of Finished Goods And Work In Progress Dr / (Cr)
  • * 5.1.6 Other Work Performed By Entity And Capitalized (Cr)
  • 5.2.0 Expenses Classified By Function Dr
  • * 5.2.1 Cost Of Sales Dr
  • * 5.2.2 Selling, General And Administrative Dr
  • * 5.2.3 Credit Loss (Reversal) On Receivables Dr / (Cr)

6.0.0 Other (Non-Operating) Income And Expenses Dr / (Cr)

  • 6.1.0 Other Revenue And Expenses Dr / (Cr)
  • * 6.1.1 Other Revenue (Cr)
  • * 6.1.2 Other Expenses Dr
  • 6.2.0 Gains And Losses Dr / (Cr)
  • * 6.2.1 Foreign Currency Transaction Gain (Loss) Dr / (Cr)
  • * 6.2.2 Gain (Loss) On Investments Dr / (Cr)
  • * 6.2.3 Gain (Loss) On Derivatives Dr / (Cr)
  • * 6.2.4 Gain (Loss) On Disposal Of Assets Dr / (Cr)
  • * 6.2.5 Debt Related Gain (Loss) Dr / (Cr)
  • * 6.2.6 Impairment Loss Dr
  • * 6.2.7 Other Gains And Losses Dr / (Cr)
  • 6.3.0 Taxes (Other Than Income And Payroll) And Fees Dr
  • * 6.3.1 Real Estate Taxes And Insurance Dr
  • * 6.3.2 Highway (Road) Taxes And Tolls Dr
  • * 6.3.3 Direct Tax And License Fees Dr
  • * 6.3.4 Excise And Sales Taxes Dr
  • * 6.3.5 Customs Fees And Duties (Not Classified As Sales Or Excise) Dr
  • * 6.3.6 Non-Deductible VAT (GST) Dr
  • * 6.3.7 General Insurance Expense Dr
  • * 6.3.8 Administrative Fees (Revenue Stamps) Dr
  • * 6.3.9 Fines And Penalties Dr
  • * 6.3.10 Miscellaneous Taxes Dr
  • * 6.3.11 Other Taxes And Fees Dr
  • 6.4.0 Income Tax Expense (Benefit) Dr / (Cr)

7.0.0 Intercompany And Related Party Accounts Dr / (Cr)

  • 7.1.0 Intercompany And Related Party Assets Dr
  • * 7.1.1 Intercompany Balances (Eliminated In Consolidation) Dr
  • * 7.1.2 Related Party Balances (Reported Or Disclosed) Dr
  • * 7.1.3 Intercompany Investments Dr
  • 7.2.0 Intercompany And Related Party Liabilities (Cr)
  • * 7.2.1 Intercompany Balances (Eliminated In Consolidation) (Cr)
  • * 7.2.2 Related Party Balances (Reported Or Disclosed) (Cr)
  • 7.3.0 Intercompany And Related Party Income And Expense Dr / (Cr)
  • * 7.3.1 Intercompany And Related Party Income (Cr)
  • * 7.3.2 Intercompany And Related Party Expenses Dr
  • * 7.3.3 Income (Loss) From Equity Method Investments Dr

French GAAP Chart of Accounts Layout[edit]

The French generally accepted accounting principles chart of accounts layout is used in France, Belgium, Spain and many francophone countries. The use of the French GAAP chart of accounts layout (but not the detailed accounts) is stated in French law.

In France Liabilities and Equity are seen as negative Assets and not account types of themselves, just balance accounts.

Profit and Loss Accounts[edit]

  • Class 6 Costs Accounts
  • Class 7 Revenues Accounts

Special Accounts[edit]

  • Class 8 Special Accounts

Spanish GAAP Chart of Accounts Layout[edit]

The Spanish generally accepted accounting principles chart of accounts layout is used in Spain. It's very similar to the French one.


  • Class 3 Stocks Accounts
  • Class 4 Third-Party Accounts
  • Class 5 Bank & Cash

Profit and Loss Accounts[edit]

  • Class 6 Costs Accounts
  • Class 7 Revenues Accounts

Special Accounts[edit]

  • Class 8 Expenses Recognised In Equity
  • Class 9 Income Recognised In Equity

Swedish BAS chart of accounts layout[edit]

The complete Swedish BAS standard chart of about 1250 accounts is also available in English and German texts in a printed publication from the non-profit branch BAS organisation.

BAS is a private organisation originally created by the Swedish industry and today owned by a set general interest groups like, several industry organisations, several government authorities (incl GAAP and the revenue service), the Church of Sweden, the audits and accountants organisation and SIE (file format) organisation, as close as consensus possibly (a Swedish way of working without legal demands).

The BAS chart use is not legally required in Sweden. However, it is politically anchored and so well developed that it is commonly used.

The BAS chart is not an SIS national standard because SIS is organised on pay documentation and nobody in the computer world are paying for standard documents. BAS were SIS standard but left. SIS Swedish Standards Institute is the Swedish domestic member of ISO. This is not a government procurement problem due to the fact all significant governmental authorities are significant members/part owners of BAS.

An almost identical chart of accounts is used in Norway.

Balance Sheet Accounts[edit]

Asset accounts[edit]
  • 1150 Buildings and land assets
  • 1200 Inventories, Machines
  • 1210 Alterna
  • 1220 IngDirect Savings
  • 1230 Tangerine chequing
  • 1240 Account Receivable
Liability accounts[edit]
  • 2300 Loans
  • 2400 Short debts (payables 2440)
  • 2500 Income Tax Payable
  • 2600 VAT Payable
  • 2700 Wages Payable
  • 2800-2999 other liabilities

Profit & Loss accounts[edit]

Revenue accounts[edit]
  • 3000 Revenue Accounts
Expense accounts[edit]
  • 4000 Costs directly related to revenues
  • 5000-7999 General expense Accounts
  • 8000 Financial Accounts
  • 9000 Contra-accounts

See also[edit]

Notes and references[edit]

  1. ^ "Liability Accounting - AccountingTools". www.accountingtools.com. Retrieved 2016-06-23.
  2. ^ "Equity Method - AccountingTools". www.accountingtools.com. Retrieved 2016-06-23.
  3. ^ "Revenue accounts - Questions & Answers - AccountingTools". www.accountingtools.com. Retrieved 2016-06-23.
  4. ^ "Expense account definition and usage - Questions & Answers - AccountingTools". www.accountingtools.com. Retrieved 2016-06-23.
  5. ^ https://www.ifrs-gaap.com/chart-accounts