A chart of accounts (COA) is a list of financial accounts and reference numbers, grouped into categories, such as assets, liabilities, equity, revenue and expenses, and used for recording transactions in the organization's general ledger. 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 may consist of numerical, alphabetic, or alpha-numeric characters, although 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.

Administration

A chart of accounts is usually created for an organization by an accountant and available for use by the bookkeeper. 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. Accounts are used in the generation of a trial balance, a list of the active general ledger accounts with their respective debit and credit balances used to test the completeness of a set of accounts: if the debit and credit totals match, the indication is that the accounts are being correctly maintained. However, a balanced trial balance does not guarantee that there are no errors in the individual ledger entries. 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.

International aspects and accounting information interchange – Charts of accounts and tax harmonisation issues

While some countries define standard national charts of accounts (for example France and Germany) others such as the United States and United Kingdom do not. In the European Union, most countries codify a national GAAP (consistent with the EU accounting directives) and also require IFRS (as outlined by the IAS regulation) for public companies. The former often define a chart of accounts while the latter does not. 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, since national GAAPs often serve as the basis for determining income tax, and since income tax law is reserved for the member states, no single uniform EU chart of accounts exists.

Types of accounts

There are various types of accounts:

Example Chart of Accounts

Sample Chart of Accounts

A chart of accounts compatible with IFRS and US GAAP includes balance sheet (assets, liabilities and equity) and the profit and loss (revenue, expenses, gains and losses) classifications. If used by a consolidated or combined entity, it also includes separate classifications for intercompany transactions and balances. Account Number—Account Title —Balance: Debit (Dr) / Credit (Cr) 1.0.0 Assets (Dr) 2.0.0 Liabilities (Cr) 3.0.0 Equity (Cr) 4.0.0 Revenue (Cr) 5.0.0 Expenses (Dr) 6.0.0 Other (Non-Operating) Income And Expenses (Dr / Cr) 7.0.0 Intercompany And Related Party Accounts (Dr / Cr)

French GAAP Chart of Accounts Layout

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 in themselves, just balance accounts.

Profit and Loss Accounts

Special Accounts

Spanish GAAP Chart of Accounts Layout

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

Profit and Loss Accounts

Special Accounts

Swedish BAS chart of accounts layout

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. 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

Asset accounts

Liability accounts

Profit & Loss accounts

Revenue accounts

Expense accounts