The Chart of Accounts
The Chart of Accounts (COA) contains all of your accounts, grouped together by type. Each account is named, numbered, and associated with the Balance Sheet, the Income Statement, or specific reports. Some accounts mainly consist of debits, while others mainly have credits.
The COA follows this table:
| Assets | Liabilities | Equity | Income | Expense | |
|---|---|---|---|---|---|
| Normal Balance | DEBIT | CREDIT | CREDIT | CREDIT | DEBIT |
| Statement | Balance Sheet | Balance Sheet | Balance Sheet | Income Statement | Income Statement |
| Increased with | DEBITS | CREDITS | CREDITS | CREDITS | DEBITS |
| Decreased with | CREDITS | DEBITS | DEBITS | DEBITS | CREDITS |
| Sample Range | 1000–1499 | 1500–1999 | 2000–2999 | 3000–3999 | 4000–4999 |
Account Types
You can use any number ranges for your accounts, but they must always be in the following order:
- Assets—Things that are owned, such as cash, checking and savings accounts, land, buildings, cars, computers, and accounts receivable.Note: The predefined asset types are: Heading for Asset Accounts, Cash, Fixed Asset, Accumulated Depreciation, Inventory, Other Assets, Other Current Assets, Account Receivable, Temporarily Restricted Cash, Temporarily Restricted Asset, Permanently Restricted Cash, Permanently Restricted Asset, and Total for Asset Accounts.
- Liabilities—Things owed to others, such as bills, loans, and payables.
- Equity accounts (or Capital)—Financial holdings that are intangible or not day-to-day. Equity accounts include retained earnings (which is the current year's net profit or loss) and prior year fund balance (which is the cumulative total of past years' retained earnings).
- Income—Money received during the year, such as offerings, tithes, and book sales.
- Expense—Money spent during the year, such as utilities, wages, and maintenance.
Accounting Equations and Terms
| Result | Calculation |
|---|---|
| Net Profit/Loss (on Income Statement) | = Total Income - Expenses |
| Retained Earnings (on Balance Sheet) | = Total Income - Expenses |
| Assets | = Liabilities + Equity |