A chart of accounts is an organized list of all the relevant accounts of a particular entity. For every account head, it includes the necessary details like type, description and amount etc. A chart of accounts is quite easy to prepare, but still, you can also use pre-formatted chart of accounts templates.
A chart of accounts template is an effective document that is used to obtain further necessary financial and other information of an entity. It is a quick and easy way to ascertain the financial status and financial position of an entity. For more details, make sure to scroll down and check out the given below chart of accounts templates.
Simple Chart of Accounts Templates
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Setting up a Chart of Accounts
Setting up a Chart of Accounts is a simple process. The content and information included in a chart of accounts of a particular entity depends upon the type and nature of the entity and its business.
No matter how a chart of accounts is created, it includes at least following three columns:
- Account: Account heads or account names of the entity.
- Type: The type and nature of the account, i.e., asset, liability, income, expense or equity etc.
- Description: State the type of transaction that is usually recorded in the relevant account(s).
Remember to keep in mind that you can always include as many columns as you think would be necessary to make your chart of accounts more effective and informative.
In modern times, almost all of the entities use computerized systems for bookkeeping. In such systems, the computer automatically assigns specific numbers to all the account types or account heads. However, if an entity still uses a manual system of bookkeeping, it will have to manually assign such numbers to all the account types and account heads.
Usually, the following number system is used:
- Assets: From 1000 to 1999.
- Liabilities: From 2000 to 2999.
- Equity: From 3000 to 3999.
- Income/Revenue/Sales: From 4000 to 4999.
- Expense: From 5000 to 5999.
More Chart of Accounts Templates
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Chart of Accounts Template
Benefits of a Chart of Accounts
Following are some common benefits of a chart of accounts:
- A chart of accounts plays a very important role in the preparation of profit & loss statement and balance sheet.
- It minimizes the hard work and effort involved in integrating the information.
- It arranges the data and information in such a way so as to make it fairly easy to understand.
- With the help of a properly prepared chart of accounts, standard reports can be prepared on monthly or quarterly basis.
- The information is provided across all the departments of the entity on a consistent basis.
- It is also helpful in saving time and effort required for reconciliations.
- As each account type or account head is assigned a specific number, it is quite easy to extract any required information just by entering the number of the relevant account head.
