A chart of accounts (coa)


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double entry terms


A chart of accounts (COA) is a financial, organizational tool that provides an index of every account in an accounting system. This provides an insight into all the financial transactions of the company. Here, an account is a unique record for each type of asset, liability, equity, revenue and expense.

Ledger Account A ledger in accounting refers to a book that contains different accounts where records of transactions pertaining to a specific account is stored. It is also known as the book of final entry or principal book of accounts. It is a book where all transactions either debited or credited are stored.

Double-entry bookkeeping is a method of recording transactions where for every business transaction, an entry is recorded in at least two accounts as a debit or credit. In a double-entry system, the amounts recorded as debits must be equal to the amounts recorded as credits.

In double-entry accounting, every transaction is recorded with a debit and credit in two or more accounts, which categorize different types of financial activities in a company’s general ledger. Debits and credits are both opposite and equal

  • Every transaction in double-entry accounting is recorded with at least one debit and credit.

  • Debits and credits indicate where value is flowing into and out of a business. They must be equal to keep a company’s books in balance.

  • Debits increase the value of asset, expense and loss accounts. Credits increase the value of liability, equity, revenue and gain accounts.

  • Debit and credit balances are used to prepare a company’s income statement, balance sheet and other financial documents.

A T-account is an informal term for a set of financial records that uses double-entry bookkeeping. The term describes the appearance of the bookkeeping entries. First, a large letter T is drawn on a page. The title of the account is then entered just above the top horizontal line, while underneath debits are listed on the left and credits are recorded on the right, separated by the vertical line of the letter T.
A T-account is also called a ledger account.

  • A T-account is an informal term for a set of financial records that use double-entry bookkeeping.

  • It is called a T-account because the bookkeeping entries are laid out in a way that resembles a T-shape.

  • The account title appears just above the T. Underneath, debits are listed on the left and credits are recorded on the right, separated by a line.

  • The T-account guides accountants on what to enter in a ledger to get an adjusting balance so that revenues equal expenses. 


The account's net balance is the difference between the total of the debits and the total of the credits. This can be a net debit balance when the total debits are greater, or a net credit balance when the total credits are greater. By convention, one of these is the normal balance type for each account according to its category. Asset and expense accounts have a normal debit balance, while liability, equity and income accounts have a normal credit balance
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