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Service Business Accounting Guide

The document discusses how to set up a chart of accounts for a service business, including examples of typical accounts for assets, liabilities, equity, revenue, and expenses. It explains that a chart of accounts lists the names of accounts used for recording transactions, and a numbering system is used to organize accounts into categories like assets, liabilities, etc. An activity is included where the reader is asked to create a sample chart of accounts for a laundry shop.

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Faithful Chen
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135 views11 pages

Service Business Accounting Guide

The document discusses how to set up a chart of accounts for a service business, including examples of typical accounts for assets, liabilities, equity, revenue, and expenses. It explains that a chart of accounts lists the names of accounts used for recording transactions, and a numbering system is used to organize accounts into categories like assets, liabilities, etc. An activity is included where the reader is asked to create a sample chart of accounts for a laundry shop.

Uploaded by

Faithful Chen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SETTING UP A CHART OF

ACCOUNTS
for
SERVICE BUSINESS

SLIDESMANIA.C
What is Chart of Accounts?
A chart of accounts is a listing of the
names of the accounts that a company has
identified and made available for recording
transactions in its general ledger. 
A company has the flexibility to tailor its
chart of accounts to best suit its needs,
including adding accounts as needed.

SLIDESMANIA.C
The number of accounts included in the
chart of accounts varies depending on the
size of the company and the type of
business.

A numbering system is used in a chart of


accounts to make organization and
recordkeeping easier.

SLIDESMANIA.C
The following numbering system is based on the
five major accounts:
101-199 ASSET ACCOUNTS
201-299 LIABILITY ACCOUNTS

301-399 EQUITY ACCOUNTS

401-499 REVENUE ACCOUNTS

SLIDESMANIA.C
501-599 EXPENSE ACCOUNTS
The following are examples of Asset accounts:

101 Cash
102 Accounts Receivable
103 Short-term Investments
104 Interest Receivable
105 Notes Receivable
106 Merchandise Inventory
107 Office Supplies
108 Prepaid Insurance

109 Furniture and Fixtures

SLIDESMANIA.C
110 Accumulated Depreciation
The following are examples of Asset accounts:

120 Office Equipment


121 Vehicle
122 Land
123 Building
124 Machinery

SLIDESMANIA.C
The following are examples of Liability accounts:

201 Accounts Payable


202 Insurance Payable
203 Interest Payable
204 Salaries Payable
205 Taxes Payable
206 Notes Payable
207 Dividends Payable

SLIDESMANIA.C
The following are examples of Equity accounts:

301 Owner’s Capital


302 Owner’s Withdrawal
303 Retained Earnings
304 Interest Receivable

The following are examples of Revenue/Income


accounts:
401 Service Income
402 Discounts
403 Interest Revenue
404 Commission Earned

SLIDESMANIA.C
The following are examples of Expense accounts:

501 Salaries Expense


502 Advertisement and Promotion Expense
503 Rent Expense
504 Utilities Expense
505 Communication Expense
506 Supplies Expense
507 Bad debts expense

508 Miscellaneous Expense

SLIDESMANIA.C
Individual Activity:
Make a chart of Account for a Laundry Shop.
You may choose applicable account titles from
the samples given. You may add other accounts
not in the list as long as it follows the coding
system (see slide #4)
Copy and fill out the format below in 1 whole
sheet of paper. You may take a picture of your

SLIDESMANIA.C
output and PM it to me anytime this week.
Landry Shop
Chart of Accounts
Assets Revenue/Income
Code Account Title Code Account Title
__________ ____________ _______ ________________
__________ ____________ _______ ________________
__________ ____________ _______ ________________
__________ ____________ _______ ________________
Liabilities Expenses
__________ ____________ ________ ________________
__________ ____________ ________ ________________
__________ ____________ ________ ________________
__________ ____________ ________ ________________

Owner’s Equity
__________ ____________
__________ ____________
__________ ____________

SLIDESMANIA.C
__________ ____________

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