Understanding the Chart of Accounts
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Understanding the Chart of Accounts
Learn how financial accounts, account types, and double-entry bookkeeping work in DiverDash. This guide explains the concepts behind your chart of accounts.
Prerequisites
FINANCE_VIEWpermission to view the chart of accounts.Familiarity with the Chart of Accounts overview.
Overview
The chart of accounts is the foundation of your accounting system. Every financial transaction in DiverDash is recorded against accounts in this chart. Understanding how accounts work helps you maintain accurate books and read your financial reports with confidence.
Account Types
DiverDash uses five account types. Each type serves a specific role in your financial records.
Assets
Assets are resources your business owns or controls. They have economic value.
Current Assets: Cash, bank balances, accounts receivable, inventory. These can be converted to cash within a year.
Fixed Assets: Equipment, boats, dive gear, property. These are long-term resources.
Asset accounts normally carry a debit balance.
Liabilities
Liabilities are obligations your business owes to others.
Current Liabilities: Accounts payable, customer deposits held, short-term loans. Due within a year.
Long-Term Liabilities: Mortgages, long-term equipment loans. Due beyond a year.
Liability accounts normally carry a credit balance.
Equity
Equity represents the owner's interest in the business after subtracting liabilities from assets.
Owner's Capital: Money invested in the business.
Retained Earnings: Accumulated profits not yet distributed.
Equity accounts normally carry a credit balance.
Income
Income accounts track revenue earned from your business activities.
Course fees, certification charges
Equipment rental income
Retail sales
Trip and excursion revenue
Income accounts normally carry a credit balance.
Expense
Expense accounts track costs incurred in running your business.
Staff wages and payroll
Fuel and boat maintenance
Insurance premiums
Rent, utilities, supplies
Expense accounts normally carry a debit balance.
Double-Entry Bookkeeping
DiverDash uses double-entry bookkeeping. This means every transaction affects at least two accounts. The total debits must equal the total credits for every transaction.
How It Works
When you record a transaction, you specify:
One or more accounts to debit.
One or more accounts to credit.
Amounts that balance (total debits = total credits).
Example: Client Pays for a Course
A client pays $500 cash for an Open Water course.
Cash (Asset)
$500
Course Revenue (Income)
$500
Cash increases (debit to an asset account).
Revenue increases (credit to an income account).
The entry balances: $500 debit = $500 credit.
Example: Pay Monthly Rent
You pay $2,000 rent from your bank account.
Rent Expense (Expense)
$2,000
Bank Account (Asset)
$2,000
Rent expense increases (debit to an expense account).
Bank balance decreases (credit to an asset account).
The entry balances: $2,000 debit = $2,000 credit.
Debits and Credits Summary
Asset
Increase
Decrease
Debit
Liability
Decrease
Increase
Credit
Equity
Decrease
Increase
Credit
Income
Decrease
Increase
Credit
Expense
Increase
Decrease
Debit
Standard Accounts
DiverDash creates a standard set of accounts during registration. These accounts are designed for dive center operations and follow QuickBooks-compatible numbering conventions.
Default Numbering Ranges
Assets
1000 - 1999
Liabilities
2000 - 2999
Equity
3000 - 3999
Income
4000 - 4999
Expense
5000 - 9999
You can add custom accounts using numbers within these ranges. See Customizing the Chart of Accounts for details.
Tips
You do not need to be an accountant to use DiverDash. The system enforces balanced entries automatically.
Focus on selecting the correct accounts when entering transactions. The double-entry mechanics are handled for you.
If you are unsure which account to use, check with your accountant or refer to the default account descriptions.
Related Pages
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