I'm new to bookkeeping and I'm setting up my own chart of accounts template to use for future exercises. I want my chart to be as generic as possible so that I can use it for many different theoretical businesses. This is what I've got so far but I know I'm missing some fundamental accounts:
Balance sheet accounts
Assets
Current assets
Transactional account
Accounts receivable
Fixed assets
?
Liabilities
Current liabilities
Accounts payable
?
Long-term liabilities
?
Equity
Capital stock
Retained earnings
Income statement accounts
Expenses
Operating expenses
?
Non-operating expenses
?
Revenue
Operating revenue
?
Non-operating revenue
?
I'm trying to be as hierarchical as possible for clarity's sake. Note: "transactional account" is a generic term for current account (UK) and checking account (US).
Here are a typical set (excluding notes) for a sole trader (limited Companies are a little different). Note that they have just been lifted from a set that I've recently prepared so excuse the formating :
Profit and Loss Account
for the year ended ??????????
Sales
Cost of sales
Construction industry - payments to subcontractors
Gross profit
Other business income
Expenses
Wages, salaries and other staff costs
Car, van and travel expenses
Rent, rates, power and insurance costs
Repairs and renewals of property and equipment
Telephone, fax, stationery and other office costs
Advertising and business entertainment costs
Interest on bank and other loans
Bank, credit card and other finance charges
Irrecoverable debts written off
Accountancy, legal and other professional fees
Depreciation and loss/(profit) on sale
Other business expenses
Profit
Balance Sheet as at ???????????????????
Fixed assets Equipment, machinery and motor vehicles Other fixed assets
Current assets Stock and work in progress Trade debtors Bank/building society balances Cash in hand Other current assets and prepayments
Current liabilities Trade creditors Loans and overdrawn bank accounts Other liabilities and accruals
Net current assets
Loans due after more than one year
Net assets
Capital account Balance at start of period Net profit Capital introduced Drawings
Whilst your chart of accounts will give you a basic outline you will find that accounts differ from one entity to another so beyond basic structure I wouldn't try to be too rigid.
Basic structure to me is :
P&L
Sales
Cost of sales
expenses
Balance Sheet
Non Current Assets
Current Assets
Non Current Liabilities
Current Liabilities
Capital Account
Some have the capital account in the middle between assets and liabilities and thats the way I write it when doing accounts long hand.
Most software has the Capital account at the end (see my example above lifted from VT).
As I say, don't try to be too rigid as you will find that accounts are (within a loose structure) a lot more fluid than you you possibly believe at the moment.
good luck in your studies,
Shaun.
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Shaun
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