A chart of accounts (COA) is a list of all the financial accounts identified in the general ledger of any business. In other words, COAs list all the accounts involved in the company’s day-to-day operations. The COA is used to locate any financial transaction performed by the company. Although each company may have different looking COAs, commonly, they identify account types like revenue, expenses, assets, liabilities, and equity. COAs typically contain a name, a brief description, and an identification code for each account. In any case, though COAs may vary in form, they must comply with the guidelines set out by the generally accepted accounting principles (GAAP).
For example, in a COA, the assets account may include cash, accounts receivable, inventory assets, vehicles, and real estate. The liabilities account may list items like the company’s credit lines, accounts payable, and payroll liabilities. The equity account may list items such as common stock, preferred stock, and retained earnings.
[Last updated in November of 2021 by the Wex Definitions Team]