The company’s r asset, liability, equity, income and expense accounts compile a businesses’ chart of accounts. Most of a basic list will be provided for you if you are using accounting software or software with an accounting function.
Common questions regarding the chart of accounts are:
1) What goes above or below the line (COGS/COP)
2) What belongs on the income statement vs the balance sheet (Inventory/WIP)
3) How frequently should I review my financials and how do I manage from my financials (KPIs/metrics). KPIs should identify and measure pain points in the business and help spur discussion as to generating solutions
4) How do I develop a budget from the financials then compare to the future financials
As an accountant, one common question we received is “what can we expense” which is a broad question but generally any item that is reasonable and necessary for business operations can be expensed unless otherwise prohibited.
