CHART OF ACCOUNTS

A contractors chart of accounts is the heart of the accounting

system. Of particular importance is the cost of sales section
(beginning in the 41000 series and ending in 43000). This is the
area that distinguishes the contractor from most other
industries and causes the most confusion for the bookkeeper.
Many transactions, such as repairing a vehicle, could be
recorded in different accounts. If the repair is for a
construction vehicle, the invoice amount should be coded to
account 41231. However, if the expense is for a vehicle used for
office personnel, the expense should be coded to account 77100.
The following chart is generic and should be considered a guide
only. Because it was developed as a learning tool, each generic
account is accompanied by a brief description of the transaction
type that should be coded to the account.
ASSETS

CURRENT ASSETS

10000 CASH

10100 CASH - PETTY - Control for all petty cash accounts whether
in office or by construction superintendent in the
field.

10200 CASH - GENERAL - Demand deposits in banks for all regular

trade receipts and disbursements.

10300 CASH - PAYROLL - Imprest accounts for payroll checks.

Replenish each pay period by an amount equal to the
total of all paychecks issued.

11000 SHORT-TERM INVESTMENTS

11100 SAVINGS DEPOSITS - Funds deposited in banks, brokage

houses, and saving and loan accounts for the purpose of
obtaining interest income.

11200 OTHER (NAME) - Other investments maturing in the current

year such as PBGs or SLCs.

12000 RECEIVABLES

12100 CONTRACTS RECEIVABLE, TRADE - Amounts due for services and

materials performed on open account.

12200 CONTRACTS RECEIVABLE, RETENTION - Balance due on the

portion of contracts receivable, trade which are held
until the work is deemed complete or the job is
complete.

12300 ACCOUNTS RECEIVABLE, OTHER - Amounts due from persons or

organizations which do not arise from typical functions
of business.

12400 NOTES RECEIVABLE, TRADE - Unpaid balance of notes received

in full or partial settlement of open or short-term
accounts.

12500 NOTES RECEIVABLE, OTHER - Notes due from persons or

organizations which do not arise from typical functions
of business.

12600 UNDERBILLINGS - Contracts and estimated earnings in excess

of billings on uncompleted jobs.

12700 ACCRUED INTEREST RECEIVABLE - Interest accrued but not

received from all sources, e.g., bonds, notes, etc.
12800 ALLOWANCE FOR DOUBTFUL ACCOUNTS - Amounts provided to
cover estimated loss from uncollectible accounts and
notes receivable.
13000 INVENTORY

13100 MERCHANDISE INVENTORY - Control account for book value of

construction materials purchased and stored, i.e., not
directly charged to the job. The inventory can be
stored at the business or on the job site. Credit as
material is drawn from stock for use in specific jobs
on a cost-per-item basis and charge the cost to the
applicable job.

15000 OTHER CURRENT ASSETS

15100 REFUNDABLE DEPOSITS - Deposits with governmental agencies

and utility companies held for performance or
completion of operation.

15200 PREPAYMENTS

15210 Prepaid insurance - Charge all insurance premiums to

this account. Credit with the expense as it is
amortized to the appropriate expense account.

15220 Prepaid commitment fees - Charge with commitment

fees paid in advance and credit at the time the
expense is incurred.

15230 Prepaid interest - Charge with interest paid in

advance and credit at the time the expense is
incurred.

15240 Prepaid taxes - Charge with taxes at the time they

are paid and credit monthly for the applicable
pro rata expense.

15300 SALARY ADVANCES - Charge with salary advances and credit

with repayments.

15400 EMPLOYEE INSURANCE - Charge with payment by company and

credit when withheld or paid by employee.

15900 OTHER - Current costs or amounts due which are not other-
wise classified.

16000 INVESTMENTS AND OTHER ASSETS

16100 CASH SURRENDER VALUE OF OFFICERS' LIFE INSURANCE - Accumu-

lated cash surrender net value of any outstanding loans
on life insurance carried on officers' of the company.

16200 DUE FROM PUBLIC AGENCIES - Expenditures for public

improvements to be reimbursed by municipalities from
future appropriations.

16300 DUE FROM OFFICERS - Amounts due from company officers

which are to be carried for an indefinite period of
time. May be interest bearing notes or open accounts.
This practice is discouraged and could result in some
 unpleasant tax consequences.

16400 ORGANIZATION EXPENSE - Legal fees, corporate charter fees

and other organization costs which are normally
capitalized. Amortization of these fees should be
credited directly from this account.

17000 PROPERTY, PLANT, AND EQUIPMENT

17100 LAND - Only land acquired for the purpose of constructing

company offices, warehouses, etc.

17200 BUILDINGS AND IMPROVEMENTS - Only the costs related to

offices, field offices, warehouses, and other company
structures used in the business.

17300 FURNITURE AND EQUIPMENT - Office furniture and fixtures

and equipment used by administrative and office
personnel.

17400 MOTOR VEHICLES - Automobiles and trucks owned by the

company.

17500 CONSTRUCTION EQUIPMENT - The cost of all construction

equipment capitalized, but not including licensed
motor vehicles charged to account 17400.

17900 OTHER - Capitalized assets not otherwise classified.

18000 ACCUMULATED DEPRECIATION

18200 BUILDINGS AND IMPROVEMENTS - Accumulated depreciation of

assets carried in account 17200. Charge expenses to
account 41245 for depreciation on buildings & improve-
ment used by operating personnel, and to account 73100
for depreciation on buildings & improvements used by
office personnel.

18300 FURNITURE AND EQUIPMENT - Accumulated depreciation of

assets carried in account 17300. Charge expense to
account 73300.

18400 MOTOR VEHICLES - Accumulated depreciation on assets

carried in account 17400. Charge account 41235 for
depreciation on vehicles used by operating personnel,
and account 73200 for depreciation on vehicles used
by administrative personnel.

18500 CONSTRUCTION EQUIPMENT - Accumulated depreciation on

assets carried in account 17500. Charge account
41225 for depreciation accumulated in this account.

18900 OTHER - Capitalized assets not otherwise capitalized.

LIABILITIES AND EQUITY

CURRENT LIABILITIES

21100 DEPOSITS BY CUSTOMERS

 21110 DEPOSITS ON PURCHASES - Potentially refundable
deposits held pending credit approval of the
buyer. When deposit is no longer refundable
transfer to account 21400.

21200 ACCOUNTS PAYABLE

21210 ACCOUNTS PAYABLE, TRADE - Amounts payable on open

account with suppliers, subs, rentals, etc.

21220 ACCOUNTS PAYABLE, RETENTION - Amounts payable on

open accounts when the work is completed or when
the money is collected on the job.

21230 ACCOUNTS PAYABLE, OTHER - Other short-term open

accounts due to nontrade individuals or companies.

21300 NOTES PAYABLE

21310 NOTES PAYABLE, TRADE - Unpaid balance of notes issued

in settlement of open or short-term accounts.

21320 NOTES PAYABLE, OTHER - Notes payable to banks, other

financial institutions, officers, and others.

21400 DEFERRED INCOME - Credit this account with billings on

open contracts (when converting from the accrual method
to the percentage complete method of accounting), and
advances paid by tenants, or other sources for which
income is not yet earned. Charge this account at the
time the revenue is actually earned and credit the
appropriate income account.

21500 TAXES PAYABLE

21510 EMPLOYEE PAYROLL TAXES

21511 FEDERAL WITHHELD TAXES - Credit amounts with-
held from employees and charge with payments
to the IRS.

21512 STATE WITHHELD TAXES - Credit amounts withheld

from employees and charge with payments to
the State.

21513 FICA TAXES - Credit with funds withheld from

employees and charge with payments to the
IRS.

21514 MEDICARE TAXES - Credit with funds withheld from

employees and charge with payments to the IRS
21520 EMPLOYER PAYROLL TAXES AND INSURANCE

21521 FICA TAXES - Credit with the employer's share of

FICA liability and charge with payments to
 the IRS.

21522 MEDICARE TAXES - Credit with the employer's

share of medicare liability and charge with
payments made to IRS.

21523 WORKMAN'S COMPENSATION INSURANCE - Credit with

the monthly expense and charge with the
payments made.

21524 STATE UNEMPLOYMENT TAX - Credit with the

liability for SUTA and charge with payments
made.

21525 FEDERAL UNEMPLOYMENT TAX - Credit with the

liability for FUTA and charge with payments
made to the IRS.

21530 SALES AND USE TAX - Credit with the amount of tax
received from purchasers and charge with payments
to the applicable taxing authority.

21540 REALTY TAX - Credit with the liability incurred to

date and charge with payments made.

21550 PERSONAL PROPERTY TAX - Credit with the liability in-

curred to date and charge with payments made.

21560 STATE INCOME TAX PAYABLE - Credit with current lia-

bility for state income taxes and charge with pay-
ments to the state taxing authority.

21570 FEDERAL INCOME TAX PAYABLE - Credit with the current

liability for federal income taxes and charge
with payments to the IRS.

21580 DEFERRED INCOME TAXES PAYABLE - Credit with the

current portion of deferred income taxes.
21600 OVERBILLINGS - Billings in excess of costs and estimated
earnings on uncompleted contracts.

21700 ACCRUED INTEREST PAYABLE - Credit with interest accrued

and payable.

21800 OTHER CURRENT LIABILITIES

21810 ACCRUED SALARIES AND WAGES - Control accounts for

accrued salaries and wages and related special
funds.

22000 NONCURRENT LIABILITIES

22100 LONG-TERM NOTES PAYABLE - Liability for notes due beyond

one year. The Company should consider setting up an
account for each note payable and periodically adjust
the short-term portion ( or have the Company's CPA
make the adjustment).
 22200 MORTGAGES PAYABLE - Control account for mortgages due be-
yond one year on rental properties, land and buildings,
and improvements.

22300 LONG-TERM DEFERRED INCOME TAXES PAYABLE - Credit with the

long-term portion of deferred income taxes payable.

25000 EQUITY

25100 COMMON STOCK - Par or stated value of common outstanding

stock.

25200 ADDITIONAL PAID-IN-CAPITAL - Amounts received for common

stock which is in excess of the par or stated value.

25300 RETAINED EARNINGS - Prior years accumulation of earnings.

DO NOT CREDIT OR CHARGE THIS ACCOUNT WITH CURRENT YEARS
PROFITS OR LOSSES.

25400 CURRENT YEAR'S PROFIT AND/OR LOSS - Credit or charge with

the current year's profit or loss.

25900 OTHER - Equity accounts not otherwise classified above,

such as Treasury stock.

REVENUE AND EXPENSES

31000 SALES

31100 CONSTRUCTION SALES - Revenue earned or billings accrued.

Its easier, depending on the client's accounting
expertise, to credit this account with billings (the
accrual method) rather than perform percentage of com-
plete calculations. Please keep in mind the revenue
recognized will most likely be materially misstated
using the accrual method. Consult with your CPA when
converting from the accrual to the percentage complete
method.

31200 OTHER SALES - Revenue received from miscellaneous jobs.

32000 OTHER REVENUE

32100 RENTAL INCOME - Revenue received from rental of

investment property, office space, etc.

32200 INVESTMENT INCOME - Revenue received from investments

other than rental property, such as dividends,
interest income on bonds and savings deposits, etc.
32900 MISCELLANEOUS INCOME - Revenue received from work other
than the primary operation of business. An example
might be the revenue received from litigation support.
40000 COST OF SALES

41000 COST OF CONSTRUCTION SALES - These are costs directly

attributable to specific jobs. Due to the uniqueness
of each contractor, the following accounts are for
representative purposes only.

41110 - LABOR

41120 - MATERIAL

41130 - SUBCONTRACTORS

41140 - EQUIPMENT AND VEHICLES

41190 - OTHER

41200 INDIRECT CONSTRUCTION COSTS - These charges are more

or less variable with volume but not likely to be
in exact proportion to volume and are not
precisely attributable to one specific job.

41210 SALARIES, WAGES, AND FEES

41211 SUPERINTENDENTS - Wages of supervisory

foreman for time spent in organization
and planning or supervising crews.
Does not include the company general
superintendent who is charged to G&A.
Does not include the working foreman
who work on a specific job along with
their crew.

41212 PURCHASING - Salaries of persons who per-

form purchasing functions. Company
supervisory personnel in this area are
charged to G & A expense.
41213 OTHER - Timekeepers, dispatchers, etc.
Salaries and wages of personnel direct-
ly engaged in the operations who are
not identified with a specific unit in
the job cost records.

41220 EQUIPMENT EXPENSE, COMPANY OWNED AND RENTAL

41221 REPAIRS - Maintenance and repair costs on

equipment.

41222 FUEL, OIL, AND LUBRICATION - Servicing

costs for construction equipment, such
as generators, compressors, tractors,
graders, etc.

41223 OPERATORS' SALARIES AND WAGES - Wages of

full or part-time employees directly
attributable to the operation of equip-
 ment, the other costs for which are in-
cluded in these 41220 accounts.

41224 TAXES AND INSURANCE - Taxes and insurance

required on equipment.

41225 DEPRECIATION - Depreciation of all con-

struction equipment. Charge when
crediting account 18500.

41226 TOOL EXPENSE - Difference between begin-

ning and ending inventory.

41227 RENTAL EXPENSE - Cost of renting equipment

not directly attributable to one job.

41229 RENTAL INCOME CREDIT - Credit amount

charged to jobs for use of owned
equipment. Charge to account 41140 when
crediting this account.

41230 AUTOMOBILE AND TRUCK EXPENSE

41231 REPAIRS - Maintenance and repair costs on

automobiles and trucks.

41232 FUEL, OIL, AND LUBRICATION - Servicing

costs automobiles and trucks used by
operations.

41233 OPERATORS' SALARIES AND WAGES - Wages of

drivers directly attributable to con-
struction operations when not charge-
able to a specific job.

41234 TAXES AND INSURANCE - Property damage and

liability insurance, license and fees,
and taxes on vehicles used by the pro-
duction department.
41235 DEPRECIATION - Depreciation for all auto-
mobiles and trucks used in operations.
Credit account 18400 when charging this
account.

41236 RENTAL EXPENSE - Cost of renting equipment

used in operations but not directly
identified with a specific job.

41239 RENTAL INCOME CREDIT - Credit amount

charged to jobs for use of owned
vehicles. Charge account 14140 when
crediting this account.
41230 OTHER INDIRECT EXPENSES

41241 WARRANTY EXPENSE - Labor and material re-

quired to repair, replace, or service
any item deemed defective as a result of
 poor materials or workmanship after
possession by the owner.

41242 LOST TIME - Cost of time spent away from

the job by non-salaried employees as a
result of attendance at meetings, public
relations activities, paid vacations,
time of productions personnel in waiting
on the job for an occurrence such as
material delivery.

41243 MISCELLANEOUS MATERIALS - Stakes, forms,

and other material not directly attri-
butable to a specific job.

41244 LICENSE BOND - Cost of securing a license

bond, this does not include bid and per-
formance bonds which are costs directly
charged to the job that is bonded.

41245 DEPRECIATION - Depreciation on all build-

ings and improvements used for purposes
other than office facilities. The re-
spective credit, partial if applicable,
is to account 18200.

41249 MISCELLANEOUS - All other indirect costs,

e.g., vandalism, arbitrated adjustments,
product insurance, etc.

42000 COST OF OTHER SALES - Cost incurred on miscellaneous

jobs.

43000 COST OF OTHER REVENUES - Cost incurred associated with

other revenues.

50000 FINANCING EXPENSE

51100 INTEREST ON NOTES - Interest charges on loans with banks

and other lending institutions.

51200 OTHER - Those costs not otherwise classified.

60000 MARKETING EXPENSE

61000 ADVERTISING - Cost of advertising which is directly re-

lated to selling a specific job or community.

62000 ESTIMATORS' SALARIES AND WAGES - Salaries and wages for

the company's estimators.

70000 GENERAL AND ADMINISTRATIVE EXPENSE

71000 OFFICERS' SALARIES - Salaries paid to company officers.

71200 OTHER SALARIES AND WAGES - Salaries and wages paid to
clerical and other personnel whose work is not directly
related to operations.
71300 PAYROLL TAXES AND EMPLOYEE BENEFITS

71310 HEALTH AND ACCIDENT INSURANCE - Premiums paid by the

Company for all personnel other than direct labor.

71320 FICA TAXES - Employer's share of FICA taxes on the

salaries and wages of all personnel other than
direct workers.

71330 MEDICARE TAXES - Employer's share of Medicare Taxes

on the salaries and wages of all personnel except
direct labor.

71340 WORKMAN'S COMPENSATION - Insurance premiums for work-

man's compensation for all employees except direct
labor.

71350 STATE UNEMPLOYMENT COMPENSATION - Tax paid to the

State unemployment fund for all personnel other
than direct labor.

71360 FEDERAL UNEMPLOYMENT COMPENSATION - Tax paid to the

Federal unemployment fund for all personnel other
than direct labor.

72000 OFFICE EXPENSE

72100 RENT - Payments made for the facilities used by the

Company's general and administrative personnel.

72200 SUPPLIES - Printing, stationery, drafting, ribbons,

and all other supplies used by the office person-
nel.

72300 POSTAGE AND MAILING - Charge all administrative ex-

pense for all mailing charges except those specif-
ically applicable to another function or
department.

72400 REPAIRS AND MAINTENANCE - Control account for all

interior and exterior administrative office build-
ing maintenance and repairs, including janitorial
services, landscaping, window washing, etc.

72500 OFFICE MACHINES AND EQUIPMENT - All contracts and

other charges for maintenance or rental on office
equipment.

72600 HEAT, LIGHT, AND POWER - Cost of utilities which

serve the administrative offices.
72700 TELEPHONE - Includes standard monthly charge and
long-distance calls not applied to other functions
or departments.

72900 MISCELLANEOUS OFFICE EXPENSE - Office expenses not

 otherwise classified.

73000 DEPRECIATION AND AMORTIZATION

73100 BUILDINGS AND IMPROVEMENTS - Depreciation on build-

ings and improvements utilized by the general and
administrative personnel. Credit account, part-
ially if applicable, 18200.

73200 AUTOMOBILES - Depreciation charges on company autos

used by office personnel. Credit account, part-
ially if applicable, 18400.

73300 FURNITURE AND EQUIPMENT - Depreciation charges on

furniture, fixtures, office machines, and equip-
ment. Credit account 18300.

73400 ORGANIZATION EXPENSE - Write-off organization costs,

including legal fees, relocation expenses, etc.
Credit account 16500 when charging this account.

73500 IDLE EQUIPMENT AND VEHICLE EXPENSE - If the company

is underutilizing construction equipment, it
should charge the underutilized expense to this
account.

73900 OTHER - Depreciation and amortization charges not

otherwise classified.

74000 TAXES

74100 SALES AND USE TAXES - Tax on purchase of office

equipment and general supplies, but not on pur-
chase of direct construction material. Taxes on
the purchase of large items can either be expensed
or capitalized, and the decision should be made
in conjunction with other tax issues.
74200 REALTY TAXES - Tax on property used for company off-
ices and realty taxes not charged elsewhere.

74300 PERSONAL PROPERTY TAXES - Assessment on personal

property owned by the company.

74400 LICENSE FEES - Registrations, municipal fees, oper-

ating permits, etc.

74900 OTHER - Any taxes not otherwise classified.

75000 INSURANCE

75100 HAZARD - Fire and extended coverage on buildings and

content.
75200 VEHICLES - Coverage for company owned vehicles, but
not including construction trucks and vehicles
which should be charged to account 41234.
 75300 GENERAL LIABILITY - Cost of liability insurance other
than on construction equipment and vehicles which
should be charged to accounts 41224 and 41234 re-
spectivably.

75900 OTHER - Any insurance premiums not otherwise classi-

fied.

76000 PROFESSIONAL FEES

76100 ACCOUNTING - Services rendered by an outside account-

ing firm. Preferably Mike Civalier, P.C.

76200 LEGAL - Charges submitted by legal counsel for all

services rendered.

76900 OTHER - Professional fees not otherwise classified.

77000 TRAVEL AND ENTERTAINMENT

77100 AUTOMOBILE EXPENSE - Gas, oil, repairs, maintenance,

licenses, mileage reimbursements, and other auto-
mobiles expenses incurred by administrative and
office personnel.

77200 TRANSPORTATION EXPENSE - Transportation other than

automobiles.

77300 MEETINGS - Expenses incurred by officers and other

employees in representing the company before
groups, attendance at industry meetings, etc.

77400 BUSINESS ENTERTAINMENT - Expenses incurred for en-

tertainment purposes, e.g., customers, suppliers,
etc.
77900 OTHER - Other travel and entertainment expenses in-
curred by the G & A personnel and not otherwise
classified.

78000 CONTRIBUTIONS - Add subaccounts for each donee.

79000 OTHER

79100 CORPORATE EXPENSE - Trustees' fees, escrow charges,

and other miscellaneous charges not directly
related to the operations or sales department.

79200 CONTRIBUTIONS TO BONUS PLAN - Employer contributions

to an employee profit-sharing trust or plan, or
any distribution of bonus or profits to employees.
79400 DUES AND SUBSCRIPTIONS - Trade association dues and
contributions, magazines, newspapers, trade jour-
nals, business publications, reports, and manuals.
 79500 MISCELLANEOUS - Charges not otherwise classified.

80000 OTHER INCOME AND EXPENSES

81000 OTHER INCOME

81100 DISCOUNTS - Purchase discounts not recorded as a re-

duction of applicable expense.

81200 REBATES OR REFUNDS - Rebates or refunds which cannot

be identified with a specific expense.

81300 GAIN ON SALE OF ASSETS - To record gain on sale of

autos, furniture, equipment and any other fixed
assets.

81400 RECOVERY OF BAD DEBT - Revenue received from cust-

omers and others whose accounts had been written
off in prior years.

81900 OTHER INCOME - Income not otherwise classified.

82000 OTHER EXPENSE

82100 BAD DEBT EXPENSE - Open accounts or notes receivable

which are considered uncollectible.

82200 LOSS ON SALE OF ASSETS - To record loss on sale of

autos, furniture, equipment and any other fixed
assets.

82900 OTHER EXPENSE - Expenses not otherwise classified.

83000 PROVISION FOR INCOME TAX - STATE

84000 PROVISION FOR INCOME TAX - FEDERAL

85000 PROVISION FOR INCOME TAX - DEFERRED