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Chart Of Accounts



This post covers the types of account numbering formats that can be used to construct a chart of accounts, and also lists sample charts of accounts that use each of the formats. All of the charts of accounts shown follow the same general sequence of account coding, which itemizes the accounts in the balance sheet first, and the income statement second.

That sequence is as follows:


– Current assets
– Fixed assets
– Other assets
– Current liabilities
– Long-term liabilities
– Equity accounts
– Revenue
– Cost of goods sold
– Selling, general, and administrative expenses
– Income taxes
– Extraordinary items


Three-Digit Account Code Structure

A three-digit account code structure allows one to create a numerical sequence of accounts that contains up to 1,000 potential accounts. It is useful for small businesses that have no predefined departments or divisions that must be broken out separately.

A sample chart of accounts using this format is shown below:

Chart Of Account - 1

3 Digits - Chart of Account

Notice how each clearly definable block of accounts begins with a different set of account numbers. For example, current liabilities begin with “300,” revenues begin with “600,” and cost of goods sold items begin with “700.” This not only makes it easier to navigate through the chart of accounts, but is also mandated by many computerized accounting software packages.


Five-Digit Account Code Structure

A five-digit account code structure is designed for those organizations with clearly defined departments, each of which is tracked with a separate income statement. This format uses the same account codes for the balance sheet accounts that we just saw for three-digit account codes, but replicates at least the operating expenses for each department (and sometimes for the revenue accounts, too).

An example of this format is as follows, using the engineering and sales departments to illustrate the duplication of accounts:

Five Digits - Chart Of Account

Five Digits - Chart Of Accounts 4


In this example, all expense accounts are replicated for every department. This does not mean, however, that all accounts must be used for every department. For example, it is most unlikely that bank charges will be ascribed to either the engineering or sales departments. Accordingly, those accounts that are not to be used can be rendered inactive in the accounting system so that they never appear in the general ledger.


Seven-Digit Account Code Structure

A seven-digit account code structure is used by those companies that not only have multiple departments, but also multiple divisions or locations, for each of which the management team wants to record separate accounting information. This requires the same coding structure used for the five-digit system, except that two digits are placed in front of the code to signify a different company division. These new digits also apply to balance sheet accounts, because most organizations will want to track assets and liabilities by division.

The following chart of accounts, which identifies accounts for divisions in Atlanta and Seattle, continues to use the engineering and sales departments as an example of how the seven-digit account code structure is compiled

Seven Digits - Chart Of Account

Any of the preceding account codes will be eventually used in a journal entry, for which a standard form should be used such as the one shown below:

Journal Entry Standard Form

The form requires both an approval signature and description of the entry, thereby ensuring adequate documentation and evidence that the entry is necessary. There is also space at the bottom of the entry for references to additional exchange rate information, in case foreign exchange is involved.

Further worth reading about chart of accounts: Accounting Term And Definitions For Chart Of Accounts



  1. uus

    Dec 3, 2008 at 7:32 am

    Terima kasih atas berbagi pengetahuan-nya, pak putra.

    Namun karena kemampuan bahasa inggris saya terbatas, saya mohon ada terjemahan dalam bahasa indonesia-nya. sehingga manfaatnya bisa lebih terasa.
    terima kasih.

  2. asih

    Dec 13, 2008 at 11:35 am

    terimakasih sebelunnya untuk ilmu yang diberikan:

    Namun karena kemampuan bahasa inggris saya terbatas, saya mohon ada terjemahan dalam bahasa indonesia-nya.

    Saya bisa minta contoh unuk COA bidang EMKL / Jasa penyewaan Trucking?
    trimakasih untuk perhatian yang diberikan

  3. Bunga

    Jan 14, 2009 at 9:15 am

    terima kasih atas informasinya , tolong di informasikan contoh COA untuk perusahaan pertambangan misalnya batu bara. terima kasih

  4. kim

    Sep 9, 2009 at 9:28 pm

    In the chart of accounts, what account would you locate all of your start up cost?

  5. Putra

    Sep 10, 2009 at 1:36 am


    It depends on what the cost related to;

    If it is incurred prior to the first day of business, then you would group it into the “Other Assets” account after the “fixed assets” and amortized over the lifetime. Examples of this type of cost are market surveys, fees for such professionals as accountants and lawyers who are working on the incorporation of the business, travel costs to set up business arrangements with suppliers and customers, the salaries of employees while they are being trained to perform services for the company, and advertisements related to the initial startup of the business.

    However, costs incurred in order to research and purchase a specific business entity COULD NOT be groupped into the “other asset” account.

  6. J J

    Jan 14, 2010 at 7:57 am

    How about a company that have two or more business units entities which typically not related (service and trading) but use same resources? For instance, a company that have “event-organizer” business unit and “property/real state” business unit. Is “The Five-Digit Account Code Structure” can be applied for this case or have to slightly modified?

  7. Putra

    Jan 14, 2010 at 2:04 pm

    @J J

    Seems you are talking about an entity with multiple-business lines which are typically not related. You can apply some different set of chart of account for each type of business line, and construct different financial statements which provide more detail look according to the type of the business for decision-making purposes. Here, the adoption of the five digits accounts structure is become more beneficial. Sure, you can modify them to better suit your reporting need. On the presentation level [published financial statement], you then would need to consolidate them into a consolidated financial statement.

    Having said so, with many companies organized as diversified holding companies or conglomerates, a presentation of basic consolidated financial statements on an aggregated basis does not provide users with sufficient information for decision-making purposes. To overcome this situation you would need to learn about “Segment Reporting” [if you haven’t familiar with this practice].

    Although it sounds off-topic, it is worth mentioning that segment reporting is an important tool in analyzing companies that are diversified in terms of the types of businesses in which they engage or the geographic locations in which they operate. In addition, financial analysts have consistently requested that financial statement data be more disaggregated. Academic research has also demonstrated the value of disaggregated information for economic decision-making purposes.

  8. Nugroho

    Feb 16, 2010 at 8:18 am

    Pak Putra,

    Would you like to give a sample COA for Manufacturing & trading company especially for Indonesia?


  9. anto

    Mar 24, 2010 at 4:11 pm

    Hi Pak Putra, would you like to explain currency setting for COA, is the currency code attached to account code or g/l code ?
    Says the company original currency is USD, but suddenly they made up their mind to change the currency into IDR. What should we do to accomodate so the amount of account code or g/l code are recorded in correct currency code.

  10. Chandra Purnama

    Jun 7, 2010 at 4:41 am

    Pak Putra terima kasih atas contoh COA-nya, hanya saya masih bingung untuk menentukan Cost Of Goods Sold yang dipisah2 berdasarkan Material, Direct Labor, dll. Kesulitannya karena saya memindahkan biaya2 dari WIP ke dalam Finished Goods untuk kemudian setelah didapatkan unit cost dari Finished Goods tersebut baru saya catat ke COGS berdasarkan jumlah unit Finished Goods yang terjual x unit cost Finished Goods. Mohon bantuan Pak Putra bagaimana cara menentukan Cost of Goods Sold yang benar? Terima aksih.

  11. h4kim

    Nov 2, 2010 at 8:48 am

    terima kasih atas informasinya , tolong di informasikan contoh COA untuk perusahaan kontraktor. terima kasih

  12. TT

    Jan 31, 2011 at 4:39 am

    Hi Pak Putra!..then how and what necessary steps to prepare the consolidated financial statemment for the business that has multi-business lines which are not related!..

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