The Chart of Accounts (COA) is used to identify and process the bookkeeping and financial transactions for your firm. The COA that you create identifies the accounts used by your firm for assets, liabilities, capital, income, and expenses. You create only one Chart of Accounts; however you must complete a Chart of Accounts maintenance screen for each account in your Chart of Accounts.
A default Chart of Accounts is included in the initial setup of the program, but you can add/modify as needed. To access the Chart of Accounts click File > Setup > Chart of Accounts.
Account Number Configuration
Each account is 8 digits that uniquely identify the account. The format for each account number is very specific and must be in the following format:
thhss.dd, where t = a type account, h = a header account, s = a sub-header account and d = a detailed account.
- t = Type of account (i.e. 1 = asset, 2 = liability, 3 = capital, 4 = revenue and 5 = expense).
- h = Header Accounts – These accounts are also used for grouping/totaling on the Financial Statements. No activity will be found in these accounts.
- s = Sub-header Accounts – Activity will be found in these accounts with balances reported on Financial Statements.
- d = 2 digits after decimal point are Detail Accounts – Activity will be found in these accounts. Balances for these accounts will only appear on the Trial Balance. For all other Financial Statements, the balances of detail accounts will roll up and be reported with the Sub header Account.
Type accounts: These accounts are used for grouping/totaling on the financial Statements. No activity will be found in these accounts. Type accounts are:
- 10000.00 = Assets
- 20000.00 = Liabilities
- 30000.00 = Capital
- 40000.00 = Income
- 50000.00 = Expense
Header accounts: Are used when printing the financial statements so the system knows how to group/total individual accounts. You do NOT post activity to header accounts. Examples of header type accounts:
- 11000.00 – Current Assets
- 21000.00 – Current Liabilities
- 31000.00 – Equity
- 41000.00 – Fee Revenue
- 51000.00 – Administrative Expenses
Sub header accounts: “Working” accounts into which activity is directly posted if NO detail accounts exist for the sub header account. Examples of sub header accounts:
- 11010.00 – Operating Cash Account
- 21010.00 – Trust Liabilities
- 31010.00 – Paid In Capital
- 41010.00 – Fee Revenue from Client
- 51010.00 – Salaries Expense
Detail accounts: “Working” account that further details a sub header account. The balance of the detail accounts are rolled into the relating sub header account on the Balance Sheet and Income Statement, but are listed individually on the Trial Balance. Example of Detail Accounts”
- 51010.01 – Salaries Partner
- 51010.02 – Salaries Associates
- 51010.03 – Salaries Paralegals
- 51010.04 – Salaries Staff
In this example each of the above accounts would appear on the Trial Balance with the respective balance, but on the Income Statement the balance of each account would roll up and the total reported as one amount under account 51010.00.