Starter chart of accounts

A numbered list for a small sole prop or single-member service and product business. Rename what you do not use. Add accounts before you dump costs into miscellaneous.

Important: Educational estimates only. Not tax, legal, or accounting advice. AI Accounting Desk is not a CPA firm and does not provide professional services. Verify figures with a licensed professional and official IRS sources (irs.gov) before making decisions.

How to use the numbers

The number is an address. Assets start with 1, liabilities with 2, equity with 3, income with 4, cost of goods sold with 5, and expenses with 6 and 7. Gaps are intentional so you can insert 6110 between 6100 and 6200 later. This is a bookkeeping starter, not an IRS-required chart. The category guide explains what should not share an account.

Assets

Number	Account	What it holds
1000	Cash on hand	Petty cash you actually count
1010	Checking	The operating account you reconcile
1020	Savings	A business reserve, still a business account
1100	Accounts receivable	Invoices you have earned and not collected
1200	Inventory	Goods held for sale, at cost
1500	Equipment	Cost of gear you will use for more than a year
1510	Accumulated depreciation	The contra account for book depreciation

Liabilities

Number	Account	What it holds
2000	Accounts payable	Bills you have entered and not paid
2100	Credit card	The card statement balance that is still unpaid
2200	Sales tax payable	Tax collected and not remitted. See sales tax in the books
2300	Payroll liabilities	Withheld taxes and the employer share not yet deposited
2400	Owner loans	Money the owner lent the company and expects back, which is not a draw

Equity

Number	Account	What it holds
3000	Owner’s equity	The owner’s residual interest, including capital put in
3100	Owner’s draws	Cash and personal costs taken out. Not an expense. See draw versus salary
3200	Retained earnings	Prior years’ profit left in the business. Some software rolls this for you

Income and cost of goods sold

Number	Account	What it holds
4000	Service revenue	Fees for work, excluding sales tax
4100	Product revenue	Sales of goods, excluding sales tax
4200	Other income	Interest, and a late fee you actually invoiced and earned
5000	Materials	Direct materials in cost of goods sold
5100	Direct labor	Labor that exists only because a unit or job was delivered
5200	Other cost of goods sold	Freight-in and other direct costs you have decided belong above gross profit

Expenses

Number	Account
6000	Rent
6100	Utilities
6200	Insurance
6300	Software and subscriptions
6400	Office supplies
6500	Advertising
6600	Professional fees
6700	Bank and merchant fees
6800	Wages
6900	Payroll tax expense
7000	Depreciation expense
7100	Meals
7200	Travel
7300	Vehicle
7400	Contract labor

Contract labor is separate from wages so a 1099-NEC review has one account to total. If you elect S corporation taxation later, do not reuse 3100 for shareholder distributions without renaming it; the entity page explains why the pattern changes.