# Chart of Accounts

Your chart of accounts is the backbone of your bookkeeping. It’s a list of every account your business uses to categorize transactions, from cash and receivables to expenses and revenue.

When you create a company, Libro auto-generates a chart of accounts based on your business structure, type, and selected modules. You can customize it by adding, editing, or deactivating accounts.

## Viewing your accounts

The **Accounts** page shows all your accounts grouped by type.

Use the search bar to find accounts by name, code, or description.

## Account types

Libro organizes accounts into nine types. Each type determines how balances are calculated (debit-normal or credit-normal) and where accounts appear in your financial reports.

### Assets

| Type | Code Range | Examples |
| --- | --- | --- |
| Cash | 1000-1099 | Cash on Hand, Cash in Bank, Petty Cash |
| Current Asset | 1100-1399 | Accounts Receivable, Inventory, Prepaid Rent |
| Noncurrent Asset | 1500-1799 | Land, Building, Equipment |

Asset accounts have **debit-normal balances**. Debits increase the balance, credits decrease it.

### Liabilities

| Type | Code Range | Examples |
| --- | --- | --- |
| Current Liability | 2000-2399 | Accounts Payable, Salaries Payable, VAT Payable |
| Noncurrent Liability | 2500-2599 | Long-term Loans, Mortgage Payable |

Liability accounts have **credit-normal balances**. Credits increase the balance, debits decrease it.

### Equity, Revenue, and Expenses

| Type | Code Range | Examples |
| --- | --- | --- |
| Equity | 3000-3299 | Owner’s Equity, Retained Earnings, Share Capital |
| Revenue | 4000-4199 | Service Revenue, Sales |
| Other Income | 7000-7099 | Interest Income, Gain on Sale |
| Expense | 5000-6299 | Cost of Goods Sold, Rent, Utilities, Salaries |

Equity and revenue accounts have credit-normal balances. Expense accounts have debit-normal balances.

## Adding an account

Click **New Account** to open the account creation form.

### Fields

- **Account type** (required) determines where the account appears in reports and how balances are calculated
- **Code** (optional) is a numeric code for organizing and sorting accounts (e.g., 1001, 2105). Must be unique.
- **Name** (required) is the account name shown throughout the app. Must be unique.
- **Description** (optional) is a note explaining the account’s purpose, searchable from the accounts list

## Editing an account

Click the actions menu on any account and select **Edit** to modify it.

You can change the code, name, type, and description. The same uniqueness rules apply. Codes and names must be unique within your company.

## Account ledger

Click any account name to view its ledger, a detailed log of every transaction affecting that account.

The ledger shows:

| Column | Description |
| --- | --- |
| Date | When the transaction occurred |
| Entry No. | Links to the journal entry |
| Description | Line or entry description |
| Debit | Amount debited to this account |
| Credit | Amount credited to this account |
| Balance | Running balance after each transaction |

The running balance uses the account type to determine direction:

- **Debit-normal** (assets, expenses): debits increase, credits decrease
- **Credit-normal** (liabilities, equity, revenue): credits increase, debits decrease

## Deactivating accounts

If you no longer need an account but it has existing transactions, you can **deactivate** it instead of deleting it.

Deactivated accounts:

- Stay visible in your chart of accounts (marked as inactive)
- Keep their ledger history intact
- Won’t appear in dropdowns when creating new journal entries
- Can be reactivated at any time

To deactivate, click the actions menu and select **Deactivate**. You’ll need to type the account name to confirm.

## Deleting accounts

You can permanently delete an account only if it has **no associated journal entries**. If the account has been used in any entry, you’ll need to deactivate it instead.

To delete, click the actions menu and select **Delete**. You’ll need to type the account name to confirm.

## Auto-generated accounts

When you create a company, Libro generates accounts based on your setup choices:

### By legal structure

- **Sole Proprietorship** includes Owner’s Equity and Personal Drawings
- **Partnership** includes per-partner Capital and Drawings accounts
- **Corporation** includes Share Capital, Retained Earnings, Treasury Shares, Dividends
- **Cooperative** includes Member Deposits, Share Capital, Reserves, Education Fund

### By business type

- **Service** adds Service Revenue
- **Merchandising** adds Inventory, Sales, COGS, Purchase Discounts
- **Manufacturing** adds all merchandising accounts plus Raw Materials, WIP, Factory accounts

### By modules

Each module you enable adds relevant accounts:

- **Receivables** adds Accounts Receivable, Notes Receivable, Allowance for Bad Debts
- **Fixed Assets** adds Land, Building, Equipment with Accumulated Depreciation
- **Payroll** adds Salaries Payable, SSS/PhilHealth/Pag-IBIG Payable
- **Taxes** adds Input/Output VAT, Withholding Tax, Income Tax Payable
- **Loans** adds Notes Payable, Loan accounts, Interest Expense

### Base accounts (always created)

Every company gets these regardless of setup choices:

- **Cash** includes Cash on Hand, Cash in Bank, Petty Cash, Cash Equivalents
- **Liabilities** includes Accounts Payable (Trade & Non-Trade), Accrued Expenses
- **Expenses** includes Rent, Utilities, Office Supplies, Repairs, Transportation, Professional Fees, and more.