The chart sheet
The “chart” sheet
The chart sheet contains all our acounts:
- Accounts are not necessarily bank accounts. This may be obvious to accountants, but non-accountants should be aware that accounts can be any source or destination of funds. In the example, you will see accounts like “1000-BANK-ACCOUNT”, “2010-PAYABLE-SUPPLIER-A”. The former is an actual bank account, but the latter is money you owe a supplier.
- Dcycle Accounting recommends a “number-name” scheme such as “1000-BANK-ACCOUNT” rather than “1000”. If later on, for reporting needs, you want to extract just the number, you can run “=LEFT(X99, 4)” (if cell X99 contains your account number and name).
- The list of accounts is often referred to as the chart of accounts.
Most jurisdictions recommend or impose specific account numbers, but it often goes something like this:
- 1000-1999 for assets.
- 2000-2999 for liabilities.
- 3000-5999 for income.
- 6000-9999 for expenses.
Accounts categories
Dcycle Accounting splits its accounts into categories. There are four in the example, but you can add more if necessary for your organization.
- Assets are anything your organization owns that has value, for example a bank account, or accounts receivable (money that clients owe you).
- Liabilities are anything your organization owes, like accounts payable or money owed to tax authorities. These amounts are internally represented as negative because they reduce the value of your organization.
- Income any money your organization made during the period. Income is internally represented as negative, which might be hard to wrap your head around at first; to understand why, see the “Why is income negative” section, below.
- Expenses are self-explanatory, and expressed as positive numbers.
Why is income negative?
Movements between accounts always need to balance to zero, so if you get a cheque for $1000 and another for $500, you may see journal entres that looks like this:
| DATE | AMOUNT | ACCOUNT |
|---|---|---|
| 2020-01-01 | -1000 | 3300-INCOME |
| 2020-01-01 | 1000 | 1100-BANK-ACCOUNT |
| 2020-01-10 | -500 | 3300-INCOME |
| 2020-01-10 | 500 | 1100-BANK-ACCOUNT |
Your journal entries balances out (SUM(B1:B) is zero, as it should be), and your accounts also balance out:
| ACCOUNT | AMOUNT |
|---|---|
| 1100-BANK-ACCOUNT | 1500 |
| 3300-INCOME | -1500 |
On the chart of accounts, the “AMOUNT” column balances out to zero (SUM(B1:B) is zero).
But the income is now negative, how can this be?
Do not think of think of income as something you own. Your assets (in this example account 1100-BANK-ACCOUNT) as positive, that’s what you own, it’s the value of your organization.
Your income accounts represent the world outside your organization: to balance things out, when your organization gets $1500 richer, the world gets $1500 poorer. Once you think of your income like this, it makes sense for your income to be negative.
The great accounting software Ledger CLI has some documentation with a more detailed explanation.
Summary name
Often, several accounts can be grouped together when creating a report summary. For example, all your bank accounts can be grouped as “Cash on hand”; all your accounts payable accounts can be grouped as “Accounts payable”. See the “summary” tab for how this plays out.
Account currency
All accounts have an associated currency. This will generally be your home currency as defined in the “variables” tab; however, if you have, say, a client whom you invoice in a different currency, or a supplier who invoices you in a different currency, you need to define it here.
Starting balance and proof
Each account also needs to specify its balance at the start of the period covered by your spreadsheet, and associated proof.
Ending balance
You will also be able to see the chart balance at the end of the reporting period.
- Back home
- Back to sheets overview
- instructions sheet: Any instructions such as what to do monthly, which source to import exchange rates from, etc., can go here.
- sandbox sheet: Has no incidence on your reporting, can be used to test ideas, functions.
- variables sheet: Global variables related to the document such as your base currency.
- verification sheet: Consolidations verification inforation from all other sheets, and makes a master verification cell available to all sheets. If it is zero, checks pass; if it is not zero, there are errors.
- current page: chart sheet: The chart of accounts and how much money is in each account. A good overview of your assets, liabilities, expenses and income.
- facets sheet: Allows grouping of accounts in the chart of accounts.
- journal sheet: The journal of operations which is generated automatically from the imported data (sheets starting with "imp") via the intermediate sheet intJournal. Do not modify this directly.
- summary sheet: Running balance sheet, and any other high-level reporting, for the desired period. This sheet also lets you select a period and currency for all your reporting.
- acctStatement sheet: View operations related to a single account in the desired period, in the desired currency.
- log sheet: Supports the good practice of logging important work done on the document, for example monthly importing of data from your bank.
- partners sheet: All your partners.
- ACMEBANK sheet: Most organizations will import data from various sources; this is an example import short.
- PAYMENTS sheet: Example data import sheet allowing you to enter payments.
- MANUAL sheet: For "exceptional" operations which do not fall into any of your data entry sheets.
- LINE sheet: For "exceptional" operations which do not fall into any of your data entry sheets.
- INVOICES sheet: Display and print invoices.
- Invoice sheet: View and print an invoice.
- intJournal sheet: An intermediate sheet which colladates data from "imp" sheets and prepares them for the automated journal.
- forex sheet: Define your available currencies, and import daily rates.