Chart of Accounts

There are 5 Types of Accounts

Assets - things the business owns (even if they're not all paid for yet)
Liabilities - money owed to others
Equity - amount you've put into the business, plus cumulative profits and losses from previous years
Revenue - money coming into the business from sales (not new loans) for the current year
Expense - cost of purchases and other expenses the business has incurred (maybe not paid for yet) for the current year

Some accountants and bookkeepers show their Chart of Accounts with the numbers preceding the name of every account, with the numbers following the pattern above.

For example:

101 Cash in Bank (assets)
102 Inventory (assets)
201 Accounts Payable (liabilities)
301 Capital Investment (equity)
401 Sales (revenue)
501 Purchases (expense)

This numbering system is obsolete with software programs such as Quicken or Quickbooks.

Click the Taxes tab in the right hand column to continue your research.