Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 49 views

    What Is A Chart of Accounts

    Uploaded by

    Jonhmark Aniñon
    A chart of accounts (COA) provides an organizational breakdown of all the financial transactions a company conducts in an accounting period. It separates expenditures, revenue, assets, and liabilities into subaccounts to give stakeholders clearer insight into a company's financial health and ensure compliance with reporting standards. A COA typically lists balance sheet, income statement, and shareholders' equity accounts and assigns a multi-digit code to each account for easy location. It functions similarly to an individual's overview of accounts at a bank, showing the balance of each asset and liability in one place.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    What Is A Chart of Accounts

    Uploaded by

    Jonhmark Aniñon
    49 views2 pages
    A chart of accounts (COA) provides an organizational breakdown of all the financial transactions a company conducts in an accounting period. It separates expenditures, revenue, assets, and liabilities into subaccounts to give stakeholders clearer insight into a company's financial health and ensure compliance with reporting standards. A COA typically lists balance sheet, income statement, and shareholders' equity accounts and assigns a multi-digit code to each account for easy location. It functions similarly to an individual's overview of accounts at a bank, showing the balance of each asset and liability in one place.

    Original Title

    What Is a Chart of Accounts

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A chart of accounts (COA) provides an organizational breakdown of all the financial transactions a company conducts in an accounting period. It separates expenditures, revenue, assets, and liabilities into subaccounts to give stakeholders clearer insight into a company's financial health and ensure compliance with reporting standards. A COA typically lists balance sheet, income statement, and shareholders' equity accounts and assigns a multi-digit code to each account for easy location. It functions similarly to an individual's overview of accounts at a bank, showing the balance of each asset and liability in one place.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    49 views2 pages

    What Is A Chart of Accounts

    Uploaded by

    Jonhmark Aniñon
    A chart of accounts (COA) provides an organizational breakdown of all the financial transactions a company conducts in an accounting period. It separates expenditures, revenue, assets, and liabilities into subaccounts to give stakeholders clearer insight into a company's financial health and ensure compliance with reporting standards. A COA typically lists balance sheet, income statement, and shareholders' equity accounts and assigns a multi-digit code to each account for easy location. It functions similarly to an individual's overview of accounts at a bank, showing the balance of each asset and liability in one place.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    What Is a Chart of Accounts (COA)?

    A chart of accounts (COA) is an index of all the financial accounts in the general


    ledger of a company. In short, it is an organizational tool that provides a
    digestible breakdown of all the financial transactions that a company conducted
    during a specific accounting period, broken down into subcategories.

    How Charts of Accounts (COA) Works


    Companies use a chart of accounts (COA) to organize their finances and give
    interested parties, such as investors and shareholders, a clearer insight into their
    financial health. Separating expenditures, revenue, assets, and liabilities help to
    achieve this and ensure that financial statements are in compliance with
    reporting standards.

    The list of each account a company owns is typically shown in the order the
    accounts appear in its financial statements. That means that balance
    sheet accounts, assets, liabilities, and shareholders' equity are listed first,
    followed by accounts in the income statement — revenues and expenses.

    For a small corporation, COAs might include these sub-accounts under the
    assets account:

     Cash
     Savings account
     Petty cash balance
     Accounts receivable
     Undeposited funds
     Inventory assets
     Prepaid insurance
     Vehicles
     Buildings

    Liabilities account may have sub-accounts, such as:

     The company credit card


     Accrued liabilities
     Accounts payable
     Payroll liabilities
     Notes payable

    Shareholders' equity can be broken down into the following accounts:

     Common stock
     Preferred stock
     Retained earnings

    To make it easier for readers to locate specific accounts, each chart of accounts
    typically contains a name, brief description, and an identification code. Each
    chart in the list is assigned a multi-digit number; all asset accounts generally start
    with the number 1, for example.

    Here is a way to think about how COAs relate to your own finances. Say you
    have a checking account, a savings account, and a certificate of deposit (CD) at
    the same bank. When you log in to your account online, you’ll typically go to an
    overview page that shows the balance in each account. Similarly, if you use an
    online program that helps you manage all your accounts in one place, like Mint
    or Personal Capital, what you’re looking at is basically the same thing as a
    company’s COA. You can see all your assets and liabilities, all on one page.

    Example of a COA
    Within the accounts of the income statement, revenues and expenses could be
    broken into operating revenues, operating expenses, non-operating revenues,
    and non-operating losses. In addition, the operating revenues and operating
    expenses accounts might be further organized by business function and/or by
    company divisions.

    Many organizations structure their COA so that expense information is separately


    compiled by department; thus, the sales department, engineering department,
    and accounting department all have the same set of expense accounts.
    Examples of expense accounts include the cost of goods
    sold (COGS), depreciation expense, utility expense, and wages expense.

    Special Considerations
    COAs can differ and be tailored to reflect a company’s operations. However, they
    also must respect the guidelines set out by the Financial Accounting Standards
    Board (FASB) and generally accepted accounting principles (GAAP).

    Of crucial importance is that COAs are kept the same from year to year. Doing so
    ensures that accurate comparisons of the company’s finances can be made over
    time.

    You might also like