Chart of Accounts

The Chart of Accounts is like a table of contents for your financial organization. The best way to conceptualize a chart of accounts is as a tree. 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. It's customary to have the "leaf" accounts end in non-zero digits, while parent nodes have increasing numbers of zeros. For instance, "cash" accounts might logically be arranged thus:

• Overall Assets:

  100

  • Overall Cash:

    110

    • Cash in Wallet:

      111

    • Cash in Sock in Closet:

      112

    • Cash in Mattress:

      113

    • Petty Cash Box:

      114

  • Overall Banking Assets

    120

    • Checking Account

      121

    • Savings Account

      122

When you create a new account, GnuCash suggests an appropriate account code; you are free to change this. GnuCash does not prevent duplicate numbering, although we would encourage you to avoid this. Account codes are treated as numbers in base-36, thus, if you run out of numbers, you can use the letters, a through z.