What is a chart of accounts?

A chart of accounts is the organized list of every account a business uses to categorize its financial transactions. It serves as the foundation of the general ledger and determines how financial information is organized and reported. In Digits, the chart of accounts is managed through Category Manager.

Example: A business may have separate accounts for cash, accounts receivable, revenue, payroll expenses, and rent expenses, all organized within its chart of accounts.

Related terms: General Ledger, Category Manager, Financial Statements, Journal Entry