Chart of Accounts Archives | Value Investing - Business and Economic Principles

Chart of Accounts

The chart of accounts is a set of ledgers used to record economic activity of the business. This is achieved by entering each economic transaction into a set of journals identifying ledgers (accounts) to log the amounts The books are formatted to reflect the balance sheet and income statement items. The chart of accounts is designed to present the information in the prescribed format. The layout of the chart of accounts is essential in the final outcome of reports for the entrepreneur.

Contractor’s Chart of Accounts – Completed Contract or Percentage of Completion Method

Construction Industry Standards / By David J Hoare MSA / 11/12/2018 01/23/2022

The contractor’s chart of accounts is significantly different than the traditional chart of accounts. First off, the layout is more dependent on the balance sheet than the income statement (profit and loss) accounts. Furthermore, the income statement accounts are laid out to present a resource based costing presentation than a job costing format. To add another layer of complexity, the chart of accounts is somewhat oriented to the method of accounting selected by the contractor.

Journals and Ledgers

Accounting Systems and Technology / By David J Hoare MSA / 11/04/2018 02/25/2022

Accounting is the process of recording economic activity and organizing this information in a format to inform owners about financial results. It all begins with the journals and ledgers. The initial entry is recorded in one of many journals and then transferred to the respective ledgers where the data is summed and reported to the management team. This article explains how journals and ledgers relate to each other and how the end results are organized.

Bookkeeping – Trial Balance Advanced Concepts (Lesson 68)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 07/29/2017 02/17/2022

The trial balance is a special report used by accountants and bookkeepers. It is NOT a management nor a financial report. Its primary purpose is verification of account balances and compliance to the dual entry system (debits equal credits). It is generally utilized as the first step in the closing process for interim and annual reporting. Experienced bookkeepers use the trial balance to spot egregious errors and obvious discrepancies.

Bookkeeping – Other Transportation Costs (Lesson 63)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 07/08/2017 02/17/2022

There is much more to transportation with bookkeeping than accounting for vehicle operations, addressing mileage reimbursements or tracking auto costs related to owners and family members. Bookkeepers must track the following too:

Bookkeeping – Vehicle Operations and Accounting (Lesson 60)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 07/02/2017 02/17/2022

The Internal Revenue Service authorizes two different methods to deduct expenses for vehicle operations. The most commonly used method in small business is the mileage reimbursement method explained in Lesson 61. The second method is the actual cost of vehicle operations which is explained and illustrated here.

Bookkeeping – Suspense Accounts (Lesson 55)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 06/10/2017 02/17/2022

When bookkeepers face an unknown variable with a transaction and don’t know where to place the debit or credit, they use a temporary account to hold the value. This is called the ‘Suspense’ account. There is a suspense account for each of the types of accounts.

Bookkeeping – Petty Cash (Lesson 44)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 02/20/2017 02/16/2022

Petty cash is cash kept in the office in a lockbox or with staff for instant and emergency purposes. It is actual cash and not checks. There is a process to keep track of purchases paid with petty cash and to refill the depleted amounts of cash.

Working Trial Balance

Accounting Concepts and Principles / By David J Hoare MSA / 02/18/2017 02/25/2022

The accounting profession uses various tools to generate accurate accounting information at the close of accounting cycles (monthly, quarterly and annually). The primary document is the working trial balance. It is very similar to the traditional trial balance except there are additional columns used to identify various adjustments and the corresponding source documents (work papers).

Bookkeeping – Payroll Structure (Lesson 30)

Bookkeeping - Regular Business Activity / By David J Hoare MSA / 01/31/2017 02/15/2022

Every bookkeeper needs to understand how to process a payroll. This is one of the many regular tasks in the bookkeeping cycle. In this lesson I’m going to illustrate a payroll structure as it pertains to the chart of accounts.

Bookkeeping with QuickBooks (Lesson 27)

Bookkeeping - Introduction and Basic Understanding / By David J Hoare MSA / 01/26/2017 02/15/2022

There are multiple positive benefits of QuickBooks for the business and directly for the bookkeeper too. In addition many of the various issues covered in Lessons One through Twenty-Five are distinguishable in the features offered in QuickBooks.