Understanding the Chart of Accounts

The Chart of Accounts (COA) is the foundation of your accounting system. It's a structured list of every account your business uses to categorise financial transactions. Think of it as the filing system for all your money.

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The 5 Account Types

Every account belongs to one of five types:

Type	What It Tracks	Examples
Assets	What your business owns	Cash, Bank, Accounts Receivable, Inventory
Liabilities	What your business owes	Accounts Payable, Credit Cards, Loans
Equity	Owner's stake in the business	Owner's Capital, Retained Earnings
Income	Money earned	Sales, Service Revenue, Interest Income
Expenses	Money spent	Salaries, Rent, Office Supplies, Advertising

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Account Groups (Heads)

Within each type, accounts are organised into groups. Acusheet uses 18 default account groups:

Assets:

• Cash and Bank
• Current Asset
• Inventory Asset
• Other Current Asset
• Fixed Asset

Liabilities:

• Credit Card
• Current Liability
• Other Current Liability
• Tax and Duty
• Long Term Liability

Equity:

• Equity

Income:

• Income
• Discount and Refund
• Other Income

Expenses:

• Operating Expense
• Cost of Sales
• Payroll Expense
• Other Expense

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Default Accounts (Created Automatically)

When you create your company, Acusheet automatically creates 37 accounts including:

Account	Type	Purpose
Accounts Receivable (A/R)	Asset	Money customers owe you
Accounts Payable (A/P)	Liability	Money you owe vendors
Inventory	Asset	Stock value
Cash on Hand	Asset	Physical cash
Sales	Income	Revenue from sales
Cost of Sales	Expense	Direct cost of goods sold
Retained Earnings	Equity	Accumulated profits
Salary & Wages	Expense	Staff costs
Advertising & Promotion	Expense	Marketing spend

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System Accounts

Some accounts are marked as System accounts (shown with a lock icon). These are:

• Accounts Receivable — used by all invoices
• Accounts Payable — used by all bills
• Retained Earnings — used for equity calculations

System accounts cannot be edited or deleted as they are required for the software to function correctly.

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How Accounts Connect to Transactions

Every transaction in Acusheet posts to at least two accounts following double-entry bookkeeping:

Example — Approving an invoice for AED 1,000:

Account	Debit	Credit
Accounts Receivable	1,000	—
Sales	—	1,000

Example — Receiving payment AED 1,000:

Account	Debit	Credit
Bank Account	1,000	—
Accounts Receivable	—	1,000

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Frequently Asked Questions

Do I need to set up accounts manually?
No. Acusheet creates 37 accounts automatically when your company is set up. You only need to add accounts for specific needs your business has that aren't covered by the defaults.

Can I rename default accounts?
Yes — most accounts can be renamed. System accounts (A/R, A/P, Retained Earnings) cannot be edited.

What if I don't see the account I need?
Add it yourself. See Adding an Account.

How does the COA affect my reports?
Every transaction maps to accounts in the COA. The Profit & Loss report pulls from Income and Expense accounts. The Balance Sheet pulls from Asset, Liability, and Equity accounts.