Impact Accounting, LLC

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2/4/2016

ImpactAccounting,LLC

ChartOfAccounts
SuggestedChartofAccounts
Inmanyways,theCHARTOFACCOUNTSyouuseforyourbusinessaccountingwilldetermineor,atthe
least, significantly impact (1) the amount of effort involved in doing the accounting process for your
businessand(2)theamountandqualityoftheinformationyougetoutofthatprocess.Toomuchdetailwill
multiplyyourworkload,whiletoolittledetailwillmaskcriticalinformationthatisrequiredforunderstanding
your financial information and making critical business decisions. A properly structured Chart of
Accountscanhelpyoumanageyourbusinessmoreeffectively!
ThefollowingisadescriptiveoutlineofthegenericChartofAccountswerecommendforourclients.Itlists
theBalanceSheetandIncomeStatementaccountsneededtoproperlyaccountformostsmallbusinesses
likeyours.Youwillnotethat,incertaincriticalareassuchasSales,CostofSales,andPayrollExpense,
this listing contains only a range of account numbers. These sections reflect the "personality" of your
business and are unique to each company. We will be happy to sit down with you and carefully structure
thesesectionsofyourownChartofAccounts,tohelpminimizeyouraccountingeffortsandmaximizethe
criticalmanagementinformationyouneedtorunyourbusiness.

BALANCESHEET
CURRENTASSETS
101 Cash on Hand Includes petty cash funds and any cash fees received from clients that have not
beendeposited
102108CashinBanksIncludescompanycheckingandsavingsaccountbalances.
109CashClearingUsedbyAccountantforBankReconciliation
116AccountsReceivableTradeIncludesallrevenuesandfeesduefromclientsorcustomers.
117AccountsReceivableOtherIncludesallotherrevenuesandfeesduefromoutsideparties.
118NotesReceivableIncludesamountsduefromothersundernoteobligations.
119 Employee Advances Includes all advances paid or loans made to employees such as advance
paymentsofsalaryorhourlywages,traveladvances,orotherloansthathavenotyetbeenpaidback.
120130InventoryIncludescurrentorestimatedvalueofinventoryonhandatcurrentbalancesheetdate
ormostrecentmeasurementdate.
131PrepaidInterestIncludesprepaidinterestamountstobeamortizedovercurrentyear.
132 Prepaid Rent Includes rent paid in advance of rental period (example: rental contract requiring first
andlastmonthsrent).
133PrepaidInsuranceIncludeinsurancepremiumstobeamortizedovertermofinsurancecontract.
134PrepaidOtherExpenseOtherprepaidexpenses
FIXEDASSETS
141 Land Includes total purchase price attributable to land, and cost of all expenditures for land
improvements.
142BuildingsTotalpurchasepriceofbuildings.
144LeaseholdImprovementsIncludestotalcostofallcapitalexpendituresforcapitalimprovements.
146 Furnishings, Fixtures & Equipment Includes cost of office furniture, office machines and other
equipment with a useful life of greater than one year. If the asset has personal usage, include only the
portionofthecostoftheassetattributabletobusinessoperations.
148TransportationEquipment Includes cost of vehicles and other transportation equipment owned by
thebusinesswithausefullifeofgreaterthanoneyear.Iftheequipmenthaspersonalusage,includeonly
theportionofthecostoftheassetattributabletobusinessoperations.
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149AccumulatedDepreciationIncludeslifetodatechargestocurrentoperationsovertheusefullifeof
theassets.
OTHERASSETS
162 Investments Includes all longterm business investments (cash, Certificates of Deposit, stocks,
marketablesecurities,etc.).
172SoftwareIncludesinitialCostofsoftware.
173 Accum Amortization Software Includes todate amount software cost that has been charged to
expense(seeaccount960).
182FranchiseFeeIncludesamountoffranchisefee.
183 Accum Amortization Franchise Fee Includes todate amount of franchise fee that has been
chargedtoexpense(seeaccount961).
184NonCompeteCovenantIncludesamountofnoncompetitioncovenantspurchasedwithbusiness.
185 Accum Amortization NonCompete Covenant Includes todate amount of noncompetition
covenantsthathasbeenchargedtoexpense(seeaccount963).
186 Organization & Startup Cost Includes costs attributed to organizing and establishing business
entity,suchaslegalfees,incorporationfees,registrationoftrademarksandbusinessnames,etc.
187 Accum Amortization Organization & Startup Cost Includes todate amount of organization and
startupcoststhathasbeenchargedtoexpense(seeaccount965).
188OtherAssetsIncludescostsofotherintangibleassetspurchasedwithandrelatedtobusiness.
189AccumAmortizationOtherAssetsIncludestodateamountofotherassetsthathasbeencharged
toexpense(seeaccount967).
190SecurityDepositsIncludescostofallrefundablesecuritydeposits.Nonrefundabledepositsshould
bechargedtoexpensewhenpaid,orelseamortizedoverlifeofagreement.
191GoodwillIncludesexcessvalueofpurchasepriceofbusinessovernetrealizablevalueofbusiness
assets.
CURRENTLIABILITIES
205AccountsPayableTradeIncludesalltradeliabilitiesmaturinginoneaccountingperiodorless,such
asvendorinvoices,etc.
206AccountsPayableOtherIncludesallotherliabilitiesmaturinginoneaccountingperiodorless.
208 Lease Contract Payable Includes current portion of capitalized Lease Contracts (i.e. principal
amountsdueandpayablenexttwelvemonths).
210 Notes Payable Includes current portion of amounts payable to others under notes obligations (i.e.
principalamountspayablewithinnexttwelvemonths).
211 Credit Cards Payable Includes unpaid balances due on company credit cards or other revolving
creditaccounts.
232 Accrued FICA and Withholding Tax Includes employer share and amounts withheld from
Employees for Federal Withholding tax and FICA taxes. Monthly or quarterly tax deposits for Form 941
shouldbechargedtothisaccount.
233AccruedStateWithholdingTaxIncludesemployerandemployeeamountsdueunderstateincome
taxlaws.MonthlyorquarterlypaymentsofStatewithholdingtaxesshouldbechargedtothisaccount.
234 Garnishments Includes amounts withheld from employee pay and payable to third parties or
governmententitiesundergarnishmentorders.Paymentsofgarnishmentswithheldfromemployeesshould
bechargedtothisaccount.
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235 Accrued Unemployment Tax Includes employer's share of federal and state unemployment
insurance due. Payments of monthly or quarterly State or Federal (Form 940) unemployment deposits
shouldbechargedtothisaccount.
236Sales&UseTaxPayableIncludessalestaxcollectedbutnotyetpaid,aswellasUseTaxdueon
purchases.Paymentsofmonthlyorquarterlysalestaxesshouldbechargedtothisaccount.
237 R.E. & Pers. Prop Tax Payable Includes Real Estate & Personal Property tax due (primarily for
AccrualbasetaxpayersconsultwithyourCenturySmallBusinessServicesAccountantbeforeusingthis
account).
240 Accrued Salaries & Wages Includes accrued salaries & wages expense (for Accrual base
taxpayers).
245 Customer Deposits Includes amounts collected from customers for future purchases or work in
process.
LONGTERMLIABILITIES
261 Lease Contracts Payable Long Term Includes noncurrent portion (i.e. principal amounts not
payablewithinnexttwelvemonths)ofamountspayabletoothersundercapitalizedleaseobligations.
262NotePayableLongTermIncludesnoncurrentportion(i.e.principalamountsnotpayablewithinnext
twelvemonths)ofamountspayabletoothersundernotesobligations.
263 Due Officers & Shareholders Includes loans from and other amounts due to officers and
Shareholders.
264277 Other Notes Payable Long Term Includes noncurrent portion (i.e. principal amounts not
payablewithinnexttwelvemonths)ofamountspayabletoothersundernotesobligations.
EQUITY
Note: Do not charge any amounts directly to the accounts in the Equity section of the Balance Sheet
withoutfirstconsultingwithyourCenturySmallBusinessServicesAccountant.
281CapitalStock(CorpOnly)CapitalContributions(PartnershipsLLCs)ForCorporations,includes
the stated value of capital stock issued and outstanding. For Partnerships or LLC's. includes partner's /
member'scapitalcontributions.
283RetainedEarningsIncludesfinalizedtodatecorporateearningsforprioryears.
284UndistributedTaxableIncome (SCorp only) Includes income earned as a CCorp prior to electing
SCorporation status. Distribution of this income should be done only in consultation with your Century
SmallBusinessServicesAccountant.
285AccumulatedAdjustmentAccount(SCorponly)Includesearningswithdrawnfromthecompanyfor
allcompletedprioryears.
287 Current Year Distribution (SCorp only) Includes earnings withdrawn from the company during the
currentyear.
290 Owners Drawing (Sole Proprietor only) Includes earnings withdrawn from the company during the
currentyear.
296 Unadjusted Prior Year P/L Includes preliminary earnings of the company for the prior fiscal year
beforecompletionoftaxreturnandfinalcloseoutofyear.Thisaccountwillbeclosedoutaftercompletion
oftaxreturn.
PROFIT/LOSSIncludestodateearningsofthecompanyforthecurrentyear.

OPERATINGSTATEMENT
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SALES The sales revenue reported on this statement should include only revenue earned in the current
period.
301399SalesRevenue Includes sales revenue received or earned for sales of products and services
duringthecurrentaccountingperiod.
COSTOFSALES
401439CostofSalesIncludespurchaseandproductioncostsdirectlyrelatedtoproductsandservices
soldduringthecurrentaccountingperiod.
GROSSPROFITEqualsTotalSaleslessTotalCostofSales.
OPERATING EXPENSES are regular monthly payroll and other expenses of the business that are not
directly related to sales revenue. The expenses charged to this statement should include only those
expense amounts directly related to operation of the business and chargeable against sales revenue
earnedinthecurrentorprioraccountingperiods.
Any prepaid or deferred expenses that apply against future revenues should be pulled out of operating
expenseandincludedinprepaidexpensesundertheAssetssectionofthebalancesheet.
Anybusinessrevenuesorchargesnotdirectlyrelatedtooperationofthebusiness(example:subleaseofa
portionofyourofficespace)shouldberecordedasOtherincomeandOtherexpense.
For any Personal expenses or charges paid by the business that are not related to operation of the
business,consultwithyourAccountant.
451498PAYROLL&RELATEDEXPENSES
451 474 Wages & Salaries Includes wages, salaries and other compensation paid to regular full and
parttimeemployees.
481F.I.C.A.Tax.Includescostofemployermatchingofsocialsecuritytax.
482UnemploymentTaxIncludesstateandfederalunemploymentcompensationtaxes.
483 Employee Insurance & Benefits Includes gross cost of companysupplied insurance and other
benefitsprograms.
484 Employee Med. Reimbursements Includes amounts withheld from or paid by employees for
companysuppliedinsuranceandotherbenefitsprograms.
485WorkersCompensationInsuranceIncludescostofWorkersCompensationinsurance.
501595OTHERGENERAL&ADMINISTRATIVEEXPENSES
509OutsideServicesIncludeschargesfortemporaryoutsidehelporservices.
510 Operating Supplies Includes cost of supplies used for company operations that are not directly
relatedtoproductsandservicesandincludedinCostofSales.
511SmallToolsIncludescostofsmalltoolspurchasedforuseinthebusiness.
512Postage&UPSIncludesallchargesforstamps,UPSoranyothertypeofdeliveryserviceusedin
sendingorreceivingbusinessdata.
520Rent Includes all charges paid for rent of office or storage space. Does not include rent or lease of
vehiclesortransportationequipment,whichshouldbechargedtoAccount553VehicleLeaseExpense.
521EquipmentRentalIncludescostofallequipmentrentedundershorttermrentalagreementsornon
capitalizedleases.
526UtilitiesIncludesallchargesforheat,light,power,etc.
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529TelephoneExpenseIncludesallchargesasbilledexceptforDirectoryAdvertising.
530Repairs&MaintenanceIncludesallchargesforregularrepairsandmaintenanceofbusinessassets,
exceptforrepairsthatsignificantlyenhancetheusefulnessorextendthelifeoftheasset.Thosetypesof
charges should be included in the appropriate asset account on the balance sheet (141148) and
depreciatedoverthelifeoftheasset.
533SecurityIncludescostofsecurityservices,alarms,guardservices,etc.
534 Advertising & Promotion Includes all costs of advertising and promotion, including the portion of
thetelephonebillapplicabletodirectoryadvertising,placementofhelpwantedads,signs,businesscards,
etc.
535 Insurance Expense Includes any insurance charges for office contents, professional liability,
businessliability,etc.DonotincludeAutoInsurance,whichshouldbechargedtoVehicleExpense(552).
538Meals&EntertainmentIncludescostsofbusinessmealswhiletravelingaswellasallfundsspent
forcliententertainment.
539Travel&LodgingIncludescostsofbusinesstravelsuchasairfare,hotels,rentalcars,taxiorlimo,
tips, etc. Does not include costs of meals or entertainment, which should be charged to Meals &
Entertainment(539).
540 Property & Other Taxes Includes any other taxes related to business or professional assets and
activitiesotherthanPayrolltaxesorstateandfederalincometaxes.
544Sales&UseTaxIncludessalesandusetaxpaidbycompanythatisnotcollectedfromcustomers,
orthatiscollectfromcustomersbutnotsegregatedfromreportedsalesrevenues.
548PermitsandLicensesIncludescostofallbusinesspermitsandlicenses.
550InterestExpenseIncludesanybusinessloaninterestcharges(auto,buildings,equipment).
551 Bank Charges Includes all bankrelated charges for accounts such as service fees, lockbox or
safetydepositboxes,orotherbankfees.
552VehicleExpenseIncludessuchitemsasgas,oil,repairs,insurance,tires,etc.Italsoincludesany
employee reimbursements for mileage on personal vehicles. Records should be retained with payment
documentationfordocumentationofmilestraveledandpurposeoftrip.
554 Vehicle Lease Expense Includes all lease costs for vehicles leased by the company. Costs of
operatingleasedvehiclesshouldbeincludedinVehicleExpense(552).
564LegalandAccountingIncludesthecostofprofessionallegalandaccountingservices.
566OfficeExpenseIncludesallchargesforofficesuppliessuchasstationery,forms,pensandpencils,
maintenance contracts on office machines, incidental office furniture and other office equipment not
subjecttodepreciation,andanyotherincidentalofficeexpenses.
567BadDebtsIncludeschargesandcollectionfeesrelatedtocollectionand/orwriteoffofuncollectable
portion of accounts receivable. Only aged items should be recorded as Bad Debts. Writeoff of current
receivablesshouldberecordedassalesreturns.
574AmortizationIncludescurrentyearamortizationofIntangibleAssets.
575DepreciationIncludescurrentyeardepreciationofFixedAssets.
576 Professional Development Includes cost of seminars, schools, and other forms of professional
development.
580Dues&SubscriptionsIncludeschargesformembershipsinprofessionalorbusinessorganizations,
andallpublications.
581 Laundry & Uniforms Includes costs of obtaining and maintaining companyrequired and company
suppliedemployeeclothingoruniforms.
585 Contributions Charitable contributions to qualified taxexempt charities and other qualified
organizations.
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595MiscellaneousExpensesincludeschargesforanyitemsnotincludedinanyoftheaboveoperating
expenseaccounts.

OTHERINCOMEANDEXPENSE
901 Interest Income Includes interest on bank accounts, investments or Accounts Receivable owned
andmaintainedbythebusiness.
902 Other Income Includes any other business revenue received by the company that is not related to
ongoing operation of the principal business (example: rental revenue from sublease of a portion of a
businessfacility).
95197 Other Expense Includes any other expenses incurred by the company that are not related to
operationofthebusiness.

3313NorthbrookDr.SiouxCity,IA51105
Phone:(712)2243160

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