what standards does the Chart of Accounts need to be prepare

what standards does the Chart of Accounts need to be prepared and what role has the AASB in this? (plz type up ur answer)

Solution

Chart of accounts refers to a standardized list of general ledger accounts for facilitating claiming of the business expenditures for taxation purposes for the companies which maintains two separate sets of books-one for accounting purposes and the other for taxation purposes. Accounting standards board has also specified a standard format for reference only. Because chart of accounts is to be prepared depending on the company size, nature of business, number and types of accounts involved in it.

Every account is associated with individual account numbers assigned to it specifically designed to identify that particular accounts usually forming numbers and alphabetical codes.

Sometimes these chart of accounts are broken down to primarily the major categories first and then segregating these primary accounts into their sub-categories. The codes are assigned accordingly to track where does a particular account title belong to which prime category.

A standard Chart of Accounts may contain the following:

Assets Category:

Liabilities Category:

Revenues Category:

Expenses Category:

Stockholder’s Equity Category: