So some businesses like sales all lumped together, while others like to separate them out so that they can analyze them better. Some businesses have one Sales Account to record all the sales, but others will have a Sales Account for each Product Group, or even for each Product. ![]() The Profit & Loss Account accounts are either Sales or Purchases / Expenses.Īlso, in modern software, accounts can be separated into sub-accounts, which can be a big help for categorizing and grouping together. The Balance Sheet accounts are either Assets or Liabilities. The Chart of Accounts will be divided into two sections for the accounts of the Balance Sheet and the accounts of the Profit and Loss Account The General (or Nominal) Ledger, is frequently known as Chart of Accounts in accounting software. If your Year End Accounts have to be filed publicly (for example limited companies in the UK) then there are certain rules for categorizing the various accounts and transactions so that they can be commonly understood. The main thing to bear in mind is who might read the reports and will they understand them, especially HMRC. You can have as many, or as few, accounts as you want - and you can call them what you want. The Corporation Tax Return for a Limited Company does require a categorisation of expenses. Other businesses will split these into separate accounts if they prefer it. a "Printing Postage & Stationery Account" - so these are similar enough to be grouped together in one account. Sometimes, businesses like to have one account which groups together a wider range of transactions eg.
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