Typically accounts are arranged as a tree, in hierarchical form.
The main branches represent entire categories or groups, while the leaves of the tree denote individual bank accounts or expense categories.
When a summary report is requested, typically only the main branches are shown in the report, rather than the individual accounts. For example, a chart of accounts might look like the following:
300 Expenses | +--310 Living Expenses | | | +--311 Beer | | | +--312 Cable | +--320 Business Expenses | | | +--321 8-inch Floppies | | : :
Note that accounts not only have names; they have codes, in order to provide order. When a report is generated, the sort order is determined by the numbering.
A sensible hierarchy generally will have the "leaf" accounts end in non-zero digits, whilst parent nodes have increasing numbers of zeros. For instance, "cash" accounts might logically be arranged thus:
When you create a new account, GnuCash offers a guess at what an appropriate account code might be; you are free to change this. GnuCash does not prevent duplicate numbering, although we would encourage you to avoid this. Account codes are treated as numbers in base-36, thus, if you run out of numbers, you can use the letters, a through z.
A "typical" chart of accounts is shown below. Each account is of a given account type. This example is a combination of some typical business and personal accounts.
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