Answer:Every time you record a business transaction—a new bank loan, an invoice from one of your clients, a laptop for the office—you have to record it in the right account.

But how do you know which account to record it in? The chart of accounts will tell you.

Below, we’ll go over what the accounting chart of accounts is, what it looks like, and why it’s so important for your business

Explanation:A chart of accounts is a list of all your company’s “accounts,” together in one place. It provides you with a birds eye view of every area of your business that spends or makes money. The main account types include Revenue, Expenses, Assets, Liabilities, and Equity.

Companies in different lines of business will have different looking charts of accounts. The chart of accounts for a major airline will have a lot more references to “aircraft parts” than your local cat cafe.

The chart of accounts should give anyone who is looking at it a rough idea of the nature of your business by listing all the accounts involved in your company’s day-to-day operations