Straight answers on categories, charts of accounts, and what this generator can and can't do.
What is a chart of accounts? +
A chart of accounts is the organized list of categories a business uses to record every transaction. It feeds the balance sheet, the profit-and-loss statement, and the cash-flow statement. Full explainer: what is a chart of accounts.
What are the five main accounting categories? +
Assets (what you own), liabilities (what you owe), equity (the owner's stake), revenue (income earned), and expenses (operating costs). Cost of goods sold is often tracked as a sixth group.
What do account numbers like 1010 and 5010 mean? +
The 1000-series convention: 1000s assets, 2000s liabilities, 3000s equity, 4000s revenue, 5000s expenses. It's a widespread convention, not a legal standard — pick a scheme and stay consistent.
How many categories does a small business need? +
Most run well on 15–25 accounts. Start with the smallest set that answers your real questions; split a category only when you regularly ask things it can't answer.
What expense categories should freelancers track? +
Software subscriptions, home office, equipment, professional development, marketing, professional fees, travel, and contractor payments. See the freelancer guide for the costs most independents forget.
Should cost of goods sold be separate from expenses? +
For product businesses, yes — separating COGS reveals gross profit, which drives pricing and margin decisions. Service businesses can usually skip it.
Is LedgerLeaf accounting advice? +
No. It generates common starting-point categories for drafting. Tax rules vary by jurisdiction — consult a qualified accountant for filing decisions.
Is my data private? +
Yes. Everything runs locally in your browser with crypto.getRandomValues(). No accounts, no cookies, no tracking. Details on the privacy page.