COA

[Andrew Chaplin]

Hi

 

I am struggling to find the link between COA accounts and transactions. Can someone help please?

Andrew

[Steel, Mark]

Hi Andrew,

In short there isn't really a link between the chart of accounts and transactions. The COA defines the structure of the ledger accounts and is a template that differs based on business type and location.

Its primary function is to sort the ledger_accounts into categories or types for accounting and reporting purposes. For example, a basic COA may be made up of 

• Assets.
• Liabilities.
• Equity.
• Expenses.
• Revenue.

each hold ledger_accounts/Nominal codes for those different categories. 

If we take revenue as an example for a transaction in Sage Business Cloud Accounting, we would create a sales_invoice(income/revenue) and then pass a ledger_account_id to record the income in the profit and loss. For a UK business, the Income/Revenue ledger accounts  are set out as in the attached screenshot.

Thanks

Mark