| If you plan on starting a business, a basic | | | | account types, and these are: assets, liability, |
| knowledge of the accounting code guide is | | | | system control, fund balance, revenue, |
| necessary in order to keep track of your | | | | expenditure and transfer. |
| transactions. Even if you are not a bookkeeper | | | | PROGRAM |
| and you decide to hire a professional, the basic | | | | Yet another six character code, it represents the |
| accounting knowledge is always a plus in the | | | | functions of the respective company. |
| success of your business. | | | | ACTIVITY |
| Accounting information is organized within the | | | | This is designed for future use. |
| financial system of your company through the | | | | LOCATION |
| Chart of Accounts (COA). A list of all account | | | | It is a six character code, and it is used for |
| names and numbers (cost elements) that appear | | | | identifying assets from transactions. |
| in the company's General Ledger is included in this | | | | INDEX |
| document. | | | | This one is a seven character code and it |
| The COA is used to classify transactions as | | | | represents FOPAL (fund, organization, program, |
| income, expenditure, assets, liabilities and equity. All | | | | activity and location). The first three characters of |
| financial transactions must be coded against an | | | | the index are letters and they represent the |
| internal order (indicating ownership) and cost | | | | name of the organization. The last four identify |
| element (what the transaction represents), which | | | | the FOPAL combinations. |
| provide the basis for budgeting, monitoring and | | | | This is a simple and basic walkthrough in the world |
| reporting. The elements of the COA are: | | | | of the accounting code guide. A professional |
| FUND | | | | bookkeeper is much more than that though, and |
| This is a 6 character code which basically | | | | if you consider an accounting career, you should |
| describes to source of funding in a transaction. | | | | know that it's a work that requires a lot of |
| Generally, the first 5 digits represent the office of | | | | patience, but it can pay off in the end. |
| the president fund number, while the final digit is | | | | You should also consider purchasing accounting |
| used to establish sub-funds for further | | | | software (although you can also get it for free) if |
| breakdown. | | | | you are serious about your company. The choice |
| ORGANIZATION | | | | is yours, and it really depends on the size of your |
| It is also a 6 digit code, which represents the | | | | organization also. Most of the business owners |
| department of a company. | | | | leave the accounting stuff to specialized people, |
| ACCOUNT | | | | who are able to process all the information |
| It is a six character code which represents the | | | | correctly, people who have a good knowledge of |
| basic accounts classification. There are 7 different | | | | the accounting code guide. |