Chart of accounts
In one sentenceAn organized list of all the business's accounts and their numbers in a tree structure, starting with the main groups and ending with the detail accounts.
Simply put
The chart of accounts is the “index” of the books: it defines which accounts you use, where each account sits and under which number.
Numbering makes the tree clear: the main group's number comes first, and the number grows longer as you go down into detail. A good chart makes it easier to prepare the financial statements and cost centers later.
Example
An example of numbering in a store: 1 Assets, then 11 Current assets, then 1101 Cash on hand, 1102 Bank and 1103 Customers; and 2 Liabilities, then 21 Current liabilities, then 2101 Suppliers.
Don't confuse it with
Trial balanceIt shows account balances on a given date, while the chart is the list of accounts itself, with no balances.
in FullScreen ERP
A multi-level chart of accounts in a flexible tree that suits any business activity. General accounts