Thursday, June 10, 2010
Definition from Wikipedia:
Chart of accounts (COA) is a list of the accounts used by an organization. The list can be numerical, alphabetic, or alpha-numeric. The structure and headings of accounts should assist in consistent posting of transactions. Each nominal ledger account is unique to allow its ledger to be located. The list is typically arranged in the order of the customary appearance of accounts in the financial statements, profit and loss accounts followed by balance sheet accounts.
This post will introduce the process flow for creating a chart of accounts. The chart of Accounts defines the accounting structure of the organization. This structure includes every aspects of the business like business units, accounts, products, services, geographical locations etc. Further COA also tells us about how the elements of the structure combined to form the account combination.
- Accounting combinations defined in Chart of Accounts is used to various transactions happening in the organization.
- Helps in generating account balances.
- Helps in Reporting
- Helps in Analyzing financial information
- Many more …
Basic Steps Involved in Implementation:
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