The chart of accounts is an index of every financial account located within a general ledger of a company or organization. It is primarily used as a tool for the organization and breakdown of financial transactions during a certain period. These are then broken down into subtypes for additional organizational needs. These include Ohio class, Los Angeles class, and George Washington class. No, wait, those are submarine types. Not the subtypes we are looking for.

Much like so many other terms in this glossary, the chart of accounts is useful for investors to gain a clearer image into a company’s financial health.

The Chart of Accounts lists each account owned by the company in the order they appear in a financial statement, meaning the major reports of the balance sheet, assets, liability, shareholder equity, and more are listed first for the interested parties to study. Then come the revenues and expenses found in the income statement.