An Overview of the Chart of Accounts in Microsoft Dynamics NAV

The chart of accounts is a listing of all accounts used in the general ledger of an organization. The chart is used by the accounting software to aggregate information into an entity's financial statements. The chart is usually sorted in order by account number, to ease the task of locating specific accounts. The accounts are usually numeric, but can also be alphabetic or alphanumeric. 

Sample Chart of Accounts

Accounts are usually listed in order of their appearance in the financial statements, starting with the balance sheet and continuing with the income statement. Thus, the chart of accounts begins with cash, proceeds through liabilities and shareholders' equity, and then continues with accounts for revenues and then expenses. Many organizations structure their chart of accounts so that expense information is separately compiled by department; thus, the sales department, engineering department, and accounting department all have the same set of expense accounts.

Typical accounts found in the chart of accounts are:

Assets:

• Cash (main checking account)
• Cash (payroll account)
• Petty Cash
• Marketable Securities
• Accounts Receivable
• Allowance for Doubtful Accounts
• Prepaid Expenses
• Inventory
• Fixed Assets
• Accumulated Depreciation 
• Other Assets

Assets

Liabilities:

• Accounts Payable
• Accrued Liabilities
• Taxes Payable
• Wages Payable
• Notes Payable

Liabilities

Stockholders' Equity:

• Common Stock
• Preferred Stock
• Retained Earnings

Equity

Revenue:

• Revenue
• Sales returns and allowances 

Revenue

Expenses

• Cost of Goods Sold
• Advertising Expense
• Bank Fees
• Depreciation Expense
• Payroll Tax Expense
• Rent Expense
• Supplies Expense
• Utilities Expense
• Wages Expense
• Other Expenses

Expense

You can customize the chart of account list to include only the fields you need. Details on the chart of accounts to be discussed later.