Chart of Accounts

Typically accounts are arranged as a tree, in hierarchical form.

The main branches represent entire categories or groups, while the leaves of the tree denote individual bank accounts or expense categories.

When a summary report is requested, typically only the main branches are shown in the report, rather than the individual accounts. For example, a chart of accounts might look like the following:

        300             Expenses
         |
         +--310         Living Expenses
         |   |
         |   +--311     Beer
         |   |
         |   +--312     Cable
         |
         +--320         Business Expenses
         |   |
         |   +--321     8-inch Floppies
         |   |
         :   :

Note that accounts not only have names; they have codes, in order to provide order. When a report is generated, the sort order is determined by the numbering.

A sensible hierarchy generally will have the "leaf" accounts end in non-zero digits, whilst parent nodes have increasing numbers of zeros. For instance, "cash" accounts might logically be arranged thus:


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