The Chart of Accounts Question

by Donna
(Patchogue, NY)

The Chart of Accounts

The Chart of Accounts

My company just purchased a Gym. We took out a mortgage on the building/property. How do I classify it in the chart of accounts for my mortgage payments?

Thank you.

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Jun 06, 2018
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by: Stephanie

The mortgage on the building/property should be classified as a long-term liability on the chart of accounts. You would accomplish this by first Debiting the Building Asset account and Crediting the Mortgage Payable long-term liability account.

Then when you make a mortgage payment, you will Credit your Bank Asset account and Debit the principal portion of the payment to your Mortgage Payable long-term liablity account and Debit the interest portion of the payment to your Mortgage Interest expense account.

Thank you for your COA question, Donna.

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What Is The Chart of Accounts?

What Is The Chart of Accounts

What Is The Chart of Accounts

Exactly what is the Chart of Accounts used for?

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Jun 06, 2018
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by: Stephanie

The Chart of Accounts is a complete list of all the general ledger accounts used to post amounts to. The chart of accounts is a useful tool when trying to identify the best account to use when recording transactions.

Typically, the chart of accounts will begin with balance sheet accounts then profit and loss accounts. The accounts will normally be in the same order as they will be found on the the two financial statements.

Click here to learn more about the chart of accounts.

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Which Account on Chart of Accounts

Chart of Accounts

Chart of Accounts

The construction company bought gifts and gift cards for their subcontractors.

Can I post Promotion expense in journal?
or something else?


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Jun 05, 2018
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by: Stephanie

Hello,

Thanks for your question about which account to post to on the chart of accounts.

I believe you can simply post them to a gift expense account.

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