The Chart of Accounts is like a table of contents for your finances. 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
| |
| +--322 Blue Ray RW DVDs
| |
: :
Note that accounts not only have names; they may have codes, to order the accounts. 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.
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.
A sample chart of accounts is shown below. Each account is of a given account type. This example is a combination of some typical business and personal accounts.
Assets
Cash On Hand
Checking account
Money Market Account
Certificate of Deposit
Fixed Assets
Furniture
Computers
Jewelry, Collectibles
Tools, Machinery
Investments
Stocks
Bonds
Mutual Funds
Real Estate
Liabilities
Taxes
Federal Income Tax
Social Security
Medicare
FUTA
State Income Tax
Accounts Payable
MasterCard
Visa
American Express
Diner's Club
Loans
Debentures
School Loan
Uncle Harry's Tide-me-over
Equity
Retained Earnings
Current Year Earnings
Historical Adjustments
Income
Interest Income
Bank Account Interest
Certificate of Deposit
Bond Interest
Dividends
Stock
Mutual Fund
Consulting
ABC Design
PQR Infomatics
Salary
My Day Job
Commissions
Royalties
Expenses
Rent and Utilities
Rent
Rent Late Fees
Electricity
Gas
Phone
Internet
Cable TV
Office Expenses
Accounting
Legal
Software
Postage
Bank Charges
Credit Card Charges
Toner, Paper, Paper Clips
Auto Expenses
Gas
Insurance
Repair
Rental
Taxes
Social Security
Unemployment
IRS penalties
Wages and Salaries
Consulting
Wages
Health Insurance
Travel
Air
Hotel
Meals
Auto
Marketing
Advertising
Trade Shows
Give Aways