Your Chart of Accounts Balance Sheet
,That’s it! You’re finished with the initial chart of accounts related to the balance sheet. Here’s what the finished product would look like.
Assets
Liabilities
Equities
That wasn’t so bad, was it? You’re about halfway done with the development of the chart of accounts. Chapter 3 explains how to complete the chart of accounts with accounts related to the P&L statement.
The Least You Need to Know
• The general ledger is a road map for the financial progress of your business; the data used to develop the general ledger come from the chart of accounts, which you can think of as the routes on a map.
• You should develop the chart of accounts in a way that enables you to easily produce two critical financial reports: the balance sheet and the profit and loss (P&L) statement.
• The assets section of the chart of accounts includes accounts that track cash, inventory, equipment, and depreciation.
• The liabilities section of the chart of accounts lists a company’s debts and the equities section reflects the company’s net worth.
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