Definition

A chart of accounts is a comprehensive list or an index of financial accounts included in a company's general ledger. It provides a bird's eye view of a company's business areas that spend or make money. The primary account categories included are revenues, expenses, assets, liabilities, and equity.

Example

For a small business, COAs could include some of these sub-accounts within the head 'assets':a. Cashb. Savings accountc. Accounts receivabled. Inventory assetse. Prepaid insurance

Why it matters

A chart of accounts lays out all the accounts for a business and its various financial components like a map. It tries to separate out all the company’s key accounts, making it easy to determine which transactions were recorded in each account.This could help a company make better financial decisions by giving an accurate snapshot of the company’s financial health.

Get Started

Ready to see Vareto in action?

Give your finance team the tools they deserve so your company can make better, faster operational decisions.

Request a demo