Understanding the Chart of Accounts

General Ledger Concepts

An account is the basic unit of storage for information in an accounting system. An accounting system has separate accounts for assets, liabilities, and so forth. To find and identify accounts easily, the accounts are numbered. A list of these numbers, with the corresponding descriptions, is called a chart of accounts.

A standard chart of accounts is provided for location 1. The accounts you use depend on the needs of your business. However, this standard chart of accounts provides accounts that are common to most businesses, and you may be able to use it with little or no modification. See Default Chart of Accounts.

Print a copy of the provided chart of accounts, examine its structure and compare it to your financial statements (balance sheets and profit and loss statements). The chart of accounts has gaps in the sequence of numbers. These gaps allow you to add new accounts if you need them. You can also add new locations, change the account descriptions, or delete account numbers you do not need. To print the chart of accounts, see Printing the Chart of Accounts.

If you decide to design your own chart of accounts, be sure to organize the account numbers in the order they should appear on financial statements. Also, be sure you have all the appropriate major and book summaries for each minor account. This makes it easier to develop customized financial statements.

Note: Before you go live and begin posting to general ledger, we recommend that you make a copy of your chart of accounts and save it to location 99. If you add a location in the future, you can copy this unused chart of accounts to the new location.

From the Chart of Accounts Master window, you can edit, change, and delete chart of accounts. You can also access chart of accounts history, allocations, special functions, edit categories, close G/L periods, and edit prior years.

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Chart of Accounts Concepts