Seven digit chart of accounts

The number of digits used to describe each account in a chart of accounts drives the level of detail that can be recorded. The seven digit chart of accounts is needed by larger organizations in which management wants to track information about departments within divisions. The seven-digit coding structure requires the coding used for a five digit system as its baseline, plus two additional digits that are placed to the left of the five-digit codes to designate company divisions. In those cases where a business also wants to track its assets and liabilities by division, it will also be necessary to apply the additional two digits to balance sheet accounts.

The following sample chart of accounts uses divisions located in Boston and Omaha to demonstrate how a seven-digit chart of accounts could be structured.

Account No. Division Department Description
10-00-010 Boston xxx Cash
10-00-020 Boston xxx Petty cash
10-00-030 Boston xxx Accounts receivable
10-00-040 Boston xxx Reserve for bad debts
10-00-050 Boston xxx Marketable securities
10-00-060 Boston xxx Raw materials inventory
10-00-070 Boston xxx Work-in-process inventory
10-00-080 Boston xxx Finished goods inventory
10-00-090 Boston xxx Reserve for obsolete inventory
10-00-100 Boston xxx Fixed assets – Computer equipment
10-00-110 Boston xxx Fixed assets – Computer software
10-00-120 Boston xxx Fixed assets – Furniture and fixtures
10-00-130 Boston xxx Fixed assets – Leasehold improvements
10-00-140 Boston xxx Fixed assets – Machinery
10-00-150 Boston xxx Accumulated depreciation – computer equipment
10-00-160 Boston xxx Accumulated depreciation – Computer software
10-00-170 Boston xxx Accumulated depreciation – Furniture and fixtures
10-00-180 Boston xxx Accumulated depreciation – Leasehold improvements
10-00-190 Boston xxx Accumulated depreciation – Machinery
10-00-200 Boston xxx Other assets
10-00-300 Boston xxx Accounts payable
10-00-310 Boston xxx Accrued payroll liability
10-00-320 Boston xxx Accrued vacation liability
10-00-330 Boston xxx Accrued expenses liability – other
10-00-340 Boston xxx Unremitted sales taxes
10-00-350 Boston xxx Unremitted pension payments
10-00-360 Boston xxx Short-term notes payable
10-00-370 Boston xxx Other short-term liabilities
10-00-400 Boston xxx Long-term notes payable
10-00-500 Boston xxx Capital stock
10-00-510 Boston xxx Retained earnings
10-00-600 Boston xxx Revenue
10-00-700 Boston xxx Cost of goods sold – materials
10-00-710 Boston xxx Cost of goods sold – direct labor
10-00-720 Boston xxx Cost of goods sold – manufacturing supplies
10-00-730 Boston xxx Cost of goods sold – applied overhead
10-10-800 Boston Engineering Bank charges
10-10-805 Boston Engineering Benefits
10-10-810 Boston Engineering Depreciation
10-10-815 Boston Engineering Insurance
10-10-825 Boston Engineering Office supplies
10-10-830 Boston Engineering Salaries and wages
10-10-835 Boston Engineering Telephones
10-10-840 Boston Engineering Training
10-10-845 Boston Engineering Travel and entertainment
10-10-850 Boston Engineering Utilities
10-10-855 Boston Engineering Other expenses
10-10-860 Boston Engineering Interest expense
10-20-800 Boston Sales Bank charges
10-20-805 Boston Sales Benefits
10-20-810 Boston Sales Depreciation
10-20-815 Boston Sales Insurance
10-20-825 Boston Sales Office supplies
10-20-830 Boston Sales Salaries and wages
10-20-835 Boston Sales Telephones
10-20-840 Boston Sales Training
10-20-845 Boston Sales Travel and entertainment
10-20-850 Boston Sales Utilities
10-20-855 Boston Sales Other expenses
10-20-860 Boston Sales Interest expense
10-00-900 Boston xxx Extraordinary items
20-00-010 Omaha xxx Cash
20-00-020 Omaha xxx Petty cash
20-00-030 Omaha xxx Accounts receivable
20-00-040 Omaha xxx Reserve for bad debts
20-00-050 Omaha xxx Marketable securities
20-00-060 Omaha xxx Raw materials inventory
20-00-070 Omaha xxx Work-in-process inventory
20-00-080 Omaha xxx Finished goods inventory
20-00-090 Omaha xxx Reserve for obsolete inventory
20-00-100 Omaha xxx Fixed assets – Computer equipment
20-00-110 Omaha xxx Fixed assets – Computer software
20-00-120 Omaha xxx Fixed assets – Furniture and fixtures
20-00-130 Omaha xxx Fixed assets – Leasehold improvements
20-00-140 Omaha xxx Fixed assets – Machinery
20-00-150 Omaha xxx Accumulated depreciation – computer equipment
20-00-160 Omaha xxx Accumulated depreciation – Computer software
20-00-170 Omaha xxx Accumulated depreciation – Furniture and fixtures
20-00-180 Omaha xxx Accumulated depreciation – Leasehold improvements
20-00-190 Omaha xxx Accumulated depreciation – Machinery
20-00-200 Omaha xxx Other assets
20-00-300 Omaha xxx Accounts payable
20-00-310 Omaha xxx Accrued payroll liability
20-00-320 Omaha xxx Accrued vacation liability
20-00-330 Omaha xxx Accrued expenses liability – other
20-00-340 Omaha xxx Unremitted sales taxes
<20-00-350 Omaha xxx Unremitted pension payments
20-00-360 Omaha xxx Short-term notes payable
20-00-370 Omaha xxx Other short-term liabilities
<20-00-400 Omaha xxx Long-term notes payable
20-00-500 Omaha xxx Capital stock
20-00-510 Omaha xxx Retained earnings
20-00-600 Omaha xxx Revenue
20-00-700 Omaha xxx Cost of goods sold – materials
20-00-710 Omaha xxx Cost of goods sold – direct labor<
20-00-720 Omaha xxx Cost of goods sold – manufacturing supplies
20-00-730< Omaha xxx Cost of goods sold – applied overhead
20-10-800 Omaha Engineering Engineering -- bank charges
20-10-805 Omaha Engineering Engineering -- benefits
20-10-810 Omaha Engineering Engineering -- depreciation
20-10-815 Omaha Engineering Engineering -- insurance
20-10-825 Omaha Engineering Engineering -- office supplies
20-10-830 Omaha Engineering Engineering -- salaries and wages
20-10-835 Omaha Engineering Engineering -- telephones
20-10-840 Omaha Engineering Engineering -- training
20-10-845 Omaha Engineering Engineering -- travel and entertainment
20-10-850 Omaha Engineering Engineering -- utilities
20-10-855 Omaha Engineering Engineering -- other expenses
20-10-860 Omaha Engineering Engineering -- interest expense
20-20-800 Omaha Sales Sales -- bank charges
20-20-805 Omaha Sales Sales -- benefits
20-20-810 Omaha Sales Sales -- depreciation
20-20-815 Omaha Sales Sales -- insurance
20-20-825 Omaha Sales Sales -- office supplies
20-20-830 Omaha Sales Sales -- salaries and wages
20-20-835 Omaha Sales Sales -- telephones
20-20-840 Omaha Sales Sales -- training
20-20-845 Omaha Sales Sales -- travel and entertainment
20-20-850 Omaha Sales Sales -- utilities
20-20-855 Omaha Sales Sales -- other expenses
20-20-860 Omaha Sales Sales -- interest expense
20-00-900 Omaha xxx

Extraordinary items