FINANCIAL ACCOUNTING Tools for Business Decision Making
E IGHTH EDIT ION
CHART OF ACCOUNTS
The following is a sample chart of accounts. It does not represent a comprehensive chart of all the accounts used in this textbook but rather those accounts that are commonly used. This sample chart of accounts is for a company that generates both service revenue as well as sales revenue. It uses the perpetual approach to inventory. If a periodic system was used, the following temporary accounts would be needed to record inventory purchases: Purchases, Freight-In, Purchase Returns and Allowances, and Purchase Discounts.
Assets Cash
Accounts Receivable
Allowance for Doubtful Accounts
Interest Receivable
Inventory
Supplies
Prepaid Insurance
Prepaid Rent
Land
Equipment
Accumulated Depreciation— Equipment
Buildings
Accumulated Depreciation— Buildings
Copyrights
Goodwill
Patents
Liabilities Notes Payable
Accounts Payable
Unearned Service Revenue
Salaries and Wages Payable
Interest Payable
Dividends Payable
Income Taxes Payable
Bonds Payable
Discount on Bonds Payable
Premium on Bonds Payable
Mortgage Payable
Stockholders’ Equity Common Stock
Paid-in Capital in Excess of Par Value—Common Stock
Preferred Stock
Paid-in Capital in Excess of Par Value—Preferred Stock
Treasury Stock
Retained Earnings
Dividends
Income Summary
Revenues Service Revenue
Sales Revenue
Sales Discounts
Sales Returns and Allowances
Interest Revenue
Gain on Disposal of Plant Assets
Expenses Administrative Expenses
Amortization Expense
Bad Debt Expense
Cost of Goods Sold
Depreciation Expense
Freight-Out
Income Tax Expense
Insurance Expense
Interest Expense
Loss on Disposal of Plant Assets
Maintenance and Repairs Expense
Rent Expense
Salaries and Wages Expense
Selling Expenses
Supplies Expense
Utilities Expense
ACCOUNT CLASSIFICATION AND PRESENTATION
Account Title Classification Financial Statement Normal Balance
A Accounts Payable Current Liability Balance Sheet Credit
Accounts Receivable Current A