A chart of accounts is the organized list of all the categories your business uses to record financial transactions. Think of it as the backbone of your bookkeeping structure. Each account in the list represents a specific type of financial activity—like sales, rent, payroll, or utilities. Together, these accounts create the framework for your company’s financial statements.

A Chart of Accounts (COA) is simply the master list of all the accounts a business uses to record financial transactions. Think of it as the “filing cabinet” for your bookkeeping system—each account is like a folder where specific types of income, expenses, assets, or liabilities are tracked. In other words, if bookkeeping is the process of recording transactions, the Chart of Accounts is the roadmap that tells you where each transaction belongs.