Chart of accounts

 


This article is part of a series on. The default tax status for LLCs with multiple members is as a partnership, which is required to report income and loss on IRS Form Under partnership tax treatment, each member of the LLC, as is the case for all partners of a partnership, annually receives a Form K-1 reporting the member's distributive share of the LLC's income or loss that is then reported on the member's individual income tax return. It is used to organize the finances of the entity and to segregate expenditures, revenue, assets and liabilities in order to give interested parties a better understanding of the financial health of the entity.

"Kontenplan" English translation


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Related areas Civil procedure Contract Corporate registers. Company portal Law portal. The charts of accounts can be picked from a standard chart of accounts, like the BAS in Sweden. In some countries, charts of accounts are defined by the accountant from a standard general layouts or as regulated by law.

However, in most countries it is entirely up to each accountant to design the chart of accounts. The list can use numerical, alphabetic, or alpha-numeric identifiers. However, in many computerized environments like the SIE format , only numerical identifiers are allowed. The structure and headings of accounts should assist in consistent posting of transactions. Each nominal ledger account is unique, which allows its ledger to be located.

The list is typically arranged in the order of the customary appearance of accounts in the financial statements: Each account in the chart of accounts is typically assigned a name and a unique number by which it can be identified. Software for some small businesses, such as QuickBooks , may not require account numbers. Account numbers are often five or more digits in length with each digit representing a division of the company, the department, the type of account, etc.

The first digit might signify the type of account asset, liability, etc. For example, if the first digit is a "1," it is an asset. If the first digit is a "6,".

Most countries have no national standard charts of accounts, public or privately organized. In many countries, there are general guidelines, and in France the guidelines have been codified in law. The European Commission has spent a great deal of effort on administrative tax harmonisation, and this harmonization is the main focus of the latest version of the EU VAT directive, which aims to achieve better harmonization and support electronic trade documents, such as electronic invoices used in cross border trade, especially within the European Union Value Added Tax Area.

However, there is still a great deal to be done to realize a standard chart of accounts and international accounting information interchange structure. The trial balance is a list of the active general ledger accounts with their respective debit and credit balances. A balanced trial balance does not guarantee that there are no errors in the individual ledger entries. The French generally accepted accounting principles chart of accounts layout is used in France , Belgium , Spain and many francophone countries.

In France Liabilities and Equity are seen as negative Assets and not account types of themselves, just balance accounts. The Spanish generally accepted accounting principles chart of accounts layout is used in Spain. It's very similar to the French one.