What is chart of accounts in SAP FI - Financial Accounting?

SAP Term: chart of accounts

• Component: FI

• Component Name: Financial Accounting

• Description: A classification scheme consisting of a group of general ledger G/L accounts. A chart of accounts provides a framework for the recording of values to ensure an orderly rendering of accounting data. The G/L accounts it contains are used by one or more company codes. For each G/L account, the chart of accounts contains the account number, the account name, and technical information. A chart of accounts must be assigned to each company code. This chart of accounts is the operative chart of accounts and is used in both financial accounting and cost accounting. Other charts of accounts include: Country-specific charts of accounts - These are structured in accordance with legal requirements of the country in question Group chart of accounts - This is structured in accordance with requirements pertaining to Consolidation.

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• Key Concepts: 
  The chart of accounts is a list of all the accounts used by a company in its accounting system. It is used to classify and record financial transactions. In SAP, the chart of accounts is part of the Financial Accounting (FI) component. 
  
  How to use it: 
  The chart of accounts is used to record and classify financial transactions. It is used to create financial statements, such as balance sheets and income statements. The chart of accounts can be customized to meet the specific needs of a company. 
  
  Tips & Tricks: 
  When creating a chart of accounts, it is important to ensure that all accounts are properly classified and that the structure is logical and easy to understand. It is also important to ensure that all accounts are properly linked to each other. 
  
  Related Information: 
  The chart of accounts is closely related to other components in SAP, such as Controlling (CO) and Materials Management (MM). It is also related to other accounting concepts, such as double-entry bookkeeping and accrual accounting.