Chart of Accounts Explained

What is the Chart of Accounts?

This page allows you to view, create and edit all of your accounts. This includes your physical bank accounts and expense/income categories.

The Chart of Accounts are divided into the standard accounting account types:

1. Assets
2. Liabilities
3. Income
4. Expense
5. Equity

Sections

Below is a description of each account type.

Each of the below account types are further divided into "Sub-types". Hover over or tap the "?" icon next to each heading on the Chart of Accounts page to see a more detailed description.

Assets

Your asset accounts includes everything that your company owns. For example; cash, inventory, equipment, vehicles & property. This can also include money owed to you, such as when you have delivered a product or service, but payment is expected at a later date.

Liabilities

Liabilities include the debts or obligations payable to creditors and other outsiders to which your company owes money. These can be loans, unpaid utility bills, bank overdrafts, car loans, mortgages and more.

Income

Revenue, one of the primary types of accounts in accounting, includes the money your company earns from selling goods and services. This term is also used to denote dividends and interest resulting from marketable securities.

Expenses

Any product or service that your company purchases to generate income or manufacture goods is considered an expense. This may include advertising costs, utilities, rent, salaries and others. Some expenses are deductible and help reduce your taxable income.

Equity

The equity account defines how much your business is currently worth. It's the residual interest in your company's assets after deducting liabilities. Common stock, dividends and retained earnings are all examples of equity.

Don't get overwhelmed! If you're new to accounting, this can be confusing. Have patience and seek online resources - everyone starts somewhere. There are plenty of YouTube videos explaining the basics of double entry accounting.

Editing & Deleting Accounts

To delete an account, click Delete next to the account name. Accounts with transactions assigned to them cannot be deleted. To add an account, choose the correct sub-type, then click Add New Account. Fill in the account name and click Save. To edit an account, click Edit next to the account name. Update the account name, then click Save

Sales Tax & VAT Accounts

The Sales Tax section on the Liabilities account type contains your sales tax (VAT) account. If the VAT rate changes, you can change the default VAT rate by clicking Edit next to the VAT account. Options to add a new rate, or change the default rate will be presented. The rates cannot be deleted once added.