What is Chart of Accounts

The Chart of Accounts is the foundational framework of your accounting system, providing a complete list of all accounts used to categorise and record every financial transaction in your business. This systematic structure organises accounts into five primary categories following double-entry bookkeeping principles: assets representing resources owned, liabilities representing obligations owed, equity representing ownership interest, income representing revenue earned, and expenses representing costs incurred.

Exacc's Chart of Accounts uses numerical coding systems enabling efficient organisation, quick identification, and logical grouping of related accounts, with standard code ranges assigning 1000-series to assets, 2000-series to liabilities, 3000-series to equity, 4000-series to income, and 5000-9000 series to various expense categories. Each account within the chart contains a unique account code, descriptive account name, account type classification, current balance, and active/inactive status, whilst the hierarchical structure supports sub-accounts and detail accounts for granular tracking when required.

Proper account selection when recording transactions ensures accurate financial reporting, with every invoice, bill, payment, receipt, or journal entry assigning amounts to appropriate accounts, thereby updating balances and feeding into profit and loss statements, balance sheets, cash flow reports, and management analyses. Exacc provides pre-configured default charts suitable for most Australian businesses whilst supporting customisation through adding industry-specific accounts, renaming accounts to match business terminology, inactivating unused accounts, and creating sub-accounts for detailed departmental or project tracking.

Want to learn how to effectively understand and use your Chart of Accounts? Follow our guide below for a detailed explanation of account structure and usage.