Definition
The Chart of Accounts (CoA) is the complete, ordered list of all ledger accounts a company uses to record its financial transactions. Think of it as the index: the Chart of Accounts names and organizes every account, while each Ledger Account holds the actual transaction records and balances.Purpose
- Provide a consistent classification structure for all financial data.
- Ensure every transaction is mapped to the correct category before feeding into reports and statements.
Structure
- Accounts are organized by code or numbering range.
- Can be hierarchical: main accounts with sub-accounts.
- Includes account type classifications: Asset, Liability, Equity, Revenue, Expense.
- Can be customized per folder while following the general framework.
Relationships
- Each folder has exactly one Chart of Accounts.
- The CoA contains all ledger accounts for that entity.
- It is the foundation for financial statements (balance sheet, P&L).