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What is a Chart of accounts?

Chart of accounts (Definition)

A chart of accounts is a business tool that shows a full list of every financial account you or your accountant set up. It shows the day-to-day costs associated with the running of the business, often broken down into sub-categories.

A chart of accounts is ideal when giving interested parties, shareholders, or investors a clear view of the business’s financial health. It also makes it easier to check specific accounts quickly, as accounts are separated into assets, liabilities, equity, revenue, costs of goods and expenses. Each sub-category has a brief description, a name or identification code of some kind.

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