Lesson 2 – Categories

Chart of Accounts Categories

  • Numeric systems are more efficient and easier to use
  • Identifies Assets, Liabilities, Net Assets, Revenue and Expenses
  • Requires segmentation for funds, functional areas, programs, departments, grants and sites and account codes
  • Helps in preparation of financial statements and year-end IRS Form 990

The chart of accounts typically has five areas, including assets, liabilities, net assets (or fund balances), revenue and expenses. The account numbers you come up with should depend on the particular kinds of revenue and expenses you expect to have most frequently.

The preferred set up for a chart of accounts uses the following numeric ranges, assuming a four digit account number.