Q. What is Chart of accounts explain?
The chart of accounts is a absolute listing of the titles and numbers of all the accounts in the ledger. The chart of accounts is able to be compared to a table of contents. The groups of accounts typically appear in these order 1)assets, 2)liabilities, 3)stockholders' equity, 4)dividends, 5)revenues and 6)expenses. Individual accounts are in series in the ledger. Every account typically has an identification number and a title to help locate accounts when recording data. For instance a company might number asset accounts 100-199, liability accounts 200-299, stockholders' equity accounts and Dividends account 300-399, revenue accounts 400-499, and expense accounts 500-599.
We utilize this numbering system in this text. The uniform chart of accounts can be used in the first 11 section appears in a separate file at the end of the text. You must print that file and keep it handy for working certain problems and exercises. Companies may perhaps use other numbering systems. For example sometimes a company numbers its accounts in sequence starting with 1, 2 etc. The imperative idea is that companies use some numbering system. Now that you know how to record debits and credits in an account and how all accounts together form a ledger you are ready to study the accounting process in operation.