Foundations
Chart of accounts
A chart of accounts is the organized list of accounts a business uses to classify transactions.
Reviewed by the Booksmrt bookkeeping teamLast reviewed 2026-07-27
How it works in the books
It supplies the structure for assets, liabilities, equity, revenue, and expenses. A useful chart is detailed enough to support decisions without creating overlapping accounts no one can apply consistently.
Example
A restaurant may separate food cost, beverage cost, delivery fees, payroll, and occupancy expense.
What can go wrong
Creating a new account for every merchant makes reports noisy and does not replace consistent categorization.
Compare Chart of accounts
Sources
Educational information only. Booksmrt provides bookkeeping services, not tax, legal, audit, or investment advice. Confirm material accounting and tax decisions with the appropriate professional.