The chart of accounts, which classifies transactions into individual balance sheet and income statement accounts is closely related to documents and records. The chart of accounts provides the framework for gathering the information necessary for management to make effective decisions and for the preparation of the financial statements in accordance with generally accepted accounting principles. A properly designed chart of accounts can also facilitate the preparation of financial reports sent to grantor agencies for claiming reimbursement of expenses, reporting program results, etc. A chart of accounts which accurately and comprehensively describes the types of transactions which should be in particular accounts.
