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

Contractor's Chart of Accounts

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.

Working Trial Balance

Working Trial Balance

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 traitional trial balance except there are additional columns used to identify various adjustments and the corresponding source documents (work papers).

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