HELPING YOU MOVE TO THE RIGHT DIRECTION
Choosing the right accountant for you could be one of the biggest decision you can make in your life.
An accountant can help you with any one of your life's major events. From having a new child
to dealing with a death of a loved one; from getting married to getting a divorce; from buying
a home to selling one; or from forming a new business to dissolving one.
A good accountant can be a good partner to help you make these events a better one. A good
accountant can help you save some of your hard-earned dollars and can make your business
and personal endeavors a more successful one.
Ladinez & Company, PC is a CPA firm located in the city Torrance, California. We provide services in income tax return preparations, payroll, bookkeeping, and business consulting. We are tax accountants, tax preparers, bookkeepers, payroll service providers, and business consultants. Our office is within a comfortable driving distance from the beach cities, such as Redondo Beach, Manhattan Beach, Hermosa Beach, El Segundo, Long Beach, San Pedro, and Rancho Palos Verdes. We are also within a driving distance from Los Angles city and Orange County.
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How to Create a Simple Chart of Accounts?
Have you ever tried creating your own chart of accounts? Did you ever feel lost in the middle of it? If you’ve experienced either one of this, don’t freak out and give up. Just sit back, relax and organize your thoughts on this.
A chart of account is essential in any bookkeeping system. It is the backbone of the financial statements because an incorrectly set up chart of accounts will result in an incorrect financial report.
A chart of accounts is a list of account titles or account codes with account titles. These account titles or account names are used to record the financial transactions which are summarized in the general ledger which then produces the financial statements.
Before you start, you must have the type of business in your mind. Some bookkeeping software, like Quickbooks can tailor fit the chart of accounts with the type that your business belongs. You have to think of also of what accounts that you need to track and those that will not be useful to you. So if you just copy a chart of accounts from other business that has the same type as yours, or you just use the chart of accounts tailor fit by your bookkeeping software, you might as well remove those items that you will not need in the future. This will make your chart of accounts, general ledger, trial balance and financial statements look neat. Fewer accounts also lead to fewer entry mistakes and less confusion in recording.
For large companies, it is necessary to use number codes before the account names for easier categorization while it may be unnecessary to use number codes if there are only few account titles to use and this is true with most small businesses. Whatever you choose, you must think of the future. How do you foresee the number of your account titles in the future? If you see that it will increase in such a way that you think you should have used the numbering system at the onset, then you may do so at the very start.
Usually, there are seven categories of accounts for numbering. These are as follows:
1000 – Assets
2000- Liabilities
3000 – Equity
4000 – Revenue
5000 – Cost of Goods Sold
6000 - Expenses
7000 – Other Income
8000 – Other Expenses
Again, think of the future when using the number coding. For example, instead of using 1001,1002 and so on for sub accounts of assets such as cash and accounts receivables, you may want to use 1010 for Cash, 1020 for Accounts Receivables because you may have more than one type of sub accounts for cash, for accounts receivables, and so with other accounts.
Creating a chart of accounts for the first time may be time consuming and may seem daunting but you must have a lot of patience to carefully plan and prepare it if you want to make your financial reports accurate and avoid messing up your tax return.
- We are CPAs, tax accountants, tax preparers, business managers and consultants based in Torrance, CA near Los Angeles & OC, serving the entire U.S. See us at Yelp & Facebook. Call us (424) 278-4838 or e-mail us at This email address is being protected from spambots. You need JavaScript enabled to view it. .
CPA Firm, Tax Preparers, Accountants, Bookkeepers, Payroll & Business Consultants in Torrance, CA
Our CPA firm is based in the City of Torrance, CA. We provide tax, accounting, and business services to individuals and business. The 2010 United States Census reported that Torrance had a diverse population with (51.1%) White, (34.5%) Asian, (2.7%) African American, (0.4%) Native American, (0.4%) Pacific Islander, (5.4%) from other races, and (5.5%) from two or more races. Hispanics or Latinos of any races were 23,440 persons (16.1%), while non-Hispanic whites formed 42.3% of the population. Our CPA firm understands and accommodates the needs of these diverse taxpayers.
We are a CPA firm, tax preparers, tax accountants, bookkeepers, payroll service providers, business managers and consultants based in Torrance, CA, near Los Angeles, Long Beach, and OC. And we serve the entire U.S.
Other facts about Torrance:
Torrance’s economy is majorly supported by big companies, such as Honda, Exxon Mobil Refinery, Allied Signal Aerospace, and others. The ExxonMobil refinery in the north end of the Torrance is responsible for much of Southern California's gasoline supply. Torrance was also an important hub and shop site of the Pacific Electric Railway.
Torrance was originally part of the Tongva Native American homeland for thousands of years. In 1784 the Spanish land grant for Rancho San Pedro, in the upper Las Californias Province of New Spain and encompassing present day Torrance, was issued to Juan Jose Dominguez by King Carlos III—the Spanish Empire.vIt was later divided in 1846 with Governor Pío Pico granting Rancho de los Palos Verdes to José Loreto and Juan Capistrano Sepulveda, in the Alta California territory of independent Mexico.
