The chart of accounts
An account is a list of related transactions (date, description and amount) in date order. I do not need to explain this. I am sure that you are familiar enough with your bank account or credit card statement.
For business accounting, all spending on rent is recorded in an office rent account, all spending on paper and pencils in an office stationery account, and so on – all very straightforward. A list of all of a company’s accounts, by category, is known as a chart of accounts. A very short extract from a typical chart of accounts follows. Note that for ease of reference, each account is allocated an arbitrary identification or account number. Take a quick glance and then I will explain what it means.
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