Business glossary
Chart of accounts
The organized list of accounts a business uses to classify financial transactions.
Example
A small contractor might maintain separate accounts for sales, materials, subcontractors, travel, bank fees, cash, receivables and payables. Each transaction is assigned to the appropriate account.
How it differs from related terms
The chart of accounts is the list of categories; the general ledger contains the entries and balances in those categories. A project label identifies a job and can be used alongside an account without replacing it.
Frequently asked questions
What is an example of chart of accounts?
A small contractor might maintain separate accounts for sales, materials, subcontractors, travel, bank fees, cash, receivables and payables. Each transaction is assigned to the appropriate account.
How should chart of accounts be interpreted?
The chart of accounts is the list of categories; the general ledger contains the entries and balances in those categories. A project label identifies a job and can be used alongside an account without replacing it.