Setting Up Your Chart of Accounts

There are three kinds of general ledger account records in aACE:

  • Detail accounts accept transactions and are always assigned to a header accounts (e.g. Checking Account 4563).
  • Header accounts summarize accounts. They are always assigned either to another header or to a root header account (e.g.  Total Cash, which may contain Checking Account 4563, Undeposited Funds, and others). 
  • Root Header accounts are header accounts that occupy the root level of the chart of accounts (e.g. Total Assets, Total Liabilities).

Sample Chart of Accounts Structure

In this example structure, note that header accounts can contain both other header and detail accounts. This allows you to build your chart of accounts with as many levels as you need.

  • Total Assets (Root Header)
    • Current Assets (Header)
      • Total Cash (Header)
        • Checking Account 4563 (Detail)
        • Undeposited Funds (Header)
          • Undeposited Funds - Cash/Checks (Detail)
          • Undeposited Funds - Visa/MC (Detail)        

Setting Up Root Header Accounts

aACE is designed to work with nine root header accounts, such as the following:


Account #
Account Name

1000
Total Assets

2000
Total Liabilities

3000
Total Equity

4000
Total Revenue

5000
Total Cost of Revenue

6000
Total Expenses

7000
Total Overhead Expenses

8000
Total Other Income

9000
Total Other Expenses

The first digit in each account number is used to determine the natural balance of an account and its placement on various reports. For example, accounts beginning with a 1 have a debit natural balance, whereas accounts beginning with a 2 have a credit natural balance. The natural balance determines whether a credit appears as a positive value or a negative value on reports such as the income statement. Similarly, accounts beginning with 1 - 3 appear on the balance sheet, while accounts beginning with 4 - 9 appear on the income statement.

You may choose a number range and account names that work for you as long as the first number for the Account # belongs to the logical equivalent. For example, your Account # for "Total Revenue" must begin with a 4, but having an Account # and Account Name combination of "400" and "Sales" is equivalent to "44100" and "Revenue" from aACE's perspective. We generally recommend using 4 or 5 digit account numbers. Segmenting your account numbers is not required in aACE and is not supported by aACE. 

Setting Up Detail and Header Accounts

Detail and header accounts follow the same rules as root header accounts with regards to numbering. The numbering should be logically coherent for several reasons. For example, you would not want to assign a "2000" series detail account to a "1000" series header account. Likewise, grouping similar accounts into sequential ranges will make searching, reporting, and auditing easier. Accounts can be renumbered at any time in aACE, so it is not critical that you perfectly number every account the first time.

Account Types

The Account Type field adds summaries to your income statement. For example, account records with an Account Type of "Revenue" or "Cost of Sales" will be grouped together by default as "Gross Profit (Loss)". 

To customize your income statement using this field, speak with your aACE partner.