Impact Accounting, LLC

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2/4/2016

Im pact Accounti ng, LLC

Chart Of Accounts Suggested Chart of Accounts In many ways, the CHART OF ACCOUNTS  ACCOUNTS  you use for your business accounting will determine or, at the least, significantly impact (1) the amount of effort involved in doing the accounting process for your  business and (2) the amount and quality of the information you get out of that process. Too much detail will multiply your workload, while too little detail will mask critical information that is required for understanding your financial information and making critical business decisions.  A properly structure structured d Chart of   Accounts  Accounts can help you manage m anage your business more effect effectively!  ively!  The following is a descriptive outline of the generic Chart of Accounts we recommend for our clients. It lists the Balance Sheet and Income Statement accounts needed to properly account for most small businesses like yours. You will note that, in certain critical areas such as Sales, Cost of Sales, and Payroll Expense, this listing contains only a range of account numbers. These sections reflect the "personality" of your  business and are unique to each company. We will be happy to sit down with you and carefully structure these sections of your own Chart of Accounts, to help minimize your accounting efforts and maximize the critical management information you need to run your business.

BALANCE SHEET CURRENT ASSETS 101 Cash on Hand  Hand   - Includes petty cash funds and any cash fees received from clients that have not been deposited 102-108 Cash in Banks  Banks   - Includes company checking and savings account balances. 109 Cash Clearing - Used by Accountant for Bank Reconciliation 116 Accounts Receivable - Trade  - Includes all revenues and fees due from clients or customers. 117 Accounts Receivable - Other  Other  - Includes all other revenues and fees due from outside parties. 118 Notes Receivable  Receivable  - Includes amounts due from others under note obligations. 119 Employee Advances  Advances  - Includes all advances paid or loans made to employees such as advance payments of salary or hourly wages, travel advances, or other loans that have not yet been paid back. 120-130 Inventory  Inventory   - Includes current or estimated value of inventory on-hand at current balance sheet date or most recent measurement date. 131 Prepaid Interest  Interest   - Includes prepaid interest amounts to be amortized over current year. 132 Prepaid Rent  Rent  - Includes rent paid in advance of rental period (example: rental contract requiring first and last months rent). 133 Prepaid Insurance Insurance  - Include insurance premiums to be amortized over term of insurance contract. 134 Prepaid Other Expense  Expense   - Other prepaid expenses

FIXED ASSETS 141 Land  Land  - Includes total purchase price attributable to land, and cost of all expenditures for land improvements. 142 Buildings Buildings - Total purchase price of buildings. 144 Leasehold Improvements   - Includes total cost of all capital expenditures for capital improvements. 146 Furnishings, Fixtures & Equipment   - Includes cost of office furniture, office machines and other  equipment with a useful life of greater than one year. If the asset has personal usage, include only the portion of the cost of the asset attributable to business operations. 148 Transportation Equipment   - Includes cost of vehicles and other transportation equipment owned by the business with a useful life of greater than one year. If the equipment has personal usage, include only the portion of the cost of the asset attributable to business operations. http://www.i mpactaccounti ngl lc.com/user s/ser vi ew .asp?sui d= 1705

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149 Accumulated Depreciation   - Includes life-to-date charges to current operations over the useful life of  the assets.

OTHER ASSETS 162 Investments  - Includes all long-term business investments (cash, Certificates of Deposit, stocks, marketable securities, etc.). 172 Software  - Includes initial Cost of software. 173 Accum Amortization Software  - Includes to-date amount software cost that has been charged to expense (see account 960). 182 Franchise Fee - Includes amount of franchise fee. 183 Accum Amortization Franchise Fee   - Includes to-date amount of franchise fee that has been charged to expense (see account 961). 184 Non-Compete Covenant - Includes amount of non-competition covenants purchased with business. 185 Accum Amortization Non-Compete Covenant   - Includes to-date amount of non-competition covenants that has been charged to expense (see account 963). 186 Organization & Start-up Cost  - Includes costs attributed to organizing and establishing business entity, such as legal fees, incorporation fees, registration of trademarks and business names, etc. 187 Accum Amortization Organization & Start-up Cost   - Includes to-date amount of organization and start-up costs that has been charged to expense (see account 965). 188 Other Assets - Includes costs of other intangible assets purchased with and related to business. 189 Accum Amortization Other Assets   - Includes to-date amount of other assets that has been charged to expense (see account 967). 190 Security Deposits  - Includes cost of all refundable security deposits. Non-refundable deposits should be charged to expense when paid, or else amortized over life of agreement. 191 Goodwill  - Includes excess value of purchase price of business over net realizable value of business assets.

CURRENT LIABILITIES 205 Accounts Payable Trade  - Includes all trade liabilities maturing in one accounting period or less, such as vendor invoices, etc. 206 Accounts Payable Other  - Includes all other liabilities maturing in one accounting period or less. 208 Lease Contract Payable  - Includes current portion of capitalized Lease Contracts (i.e. principal amounts due and payable next twelve months). 210 Notes Payable  - Includes current portion of amounts payable to others under notes obligations (i.e. principal amounts payable within next twelve months). 211 Credit Cards Payable  - Includes unpaid balances due on company credit cards or other revolving credit accounts. 232 Accrued FICA and Withholding Tax   - Includes employer share and amounts withheld from Employees for Federal Withholding tax and FICA taxes. Monthly or quarterly tax deposits for Form 941 should be charged to this account. 233 Accrued State Withholding Tax   - Includes employer and employee amounts due under state income tax laws. Monthly or quarterly payments of State withholding taxes should be charged to this account. 234 Garnishments  -Includes amounts withheld from employee pay and payable to third parties or  government entities under garnishment orders. Payments of garnishments withheld from employees should be charged to this account. http://www.impactaccountingllc.com/users/serview.asp?suid=1705

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235 Accrued Unemployment Tax   - Includes employer's share of federal and state unemployment insurance due. Payments of monthly or quarterly State or Federal (Form 940) unemployment deposits should be charged to this account. 236 Sales & Use Tax Payable  - Includes sales tax collected but not yet paid, as well as Use Tax due on purchases. Payments of monthly or quarterly sales taxes should be charged to this account. 237 R.E. & Pers. Prop Tax Payable  - Includes Real Estate & Personal Property tax due (primarily for   Accrual base taxpayers - consult with your Century Small Business Services Accountant before using this account). 240 Accrued Salaries & Wages  - Includes accrued salaries & wages expense (for Accrual base taxpayers). 245 Customer Deposits  - Includes amounts collected from customers for future purchases or work inprocess.

LONG TERM LIABILITIES 261 Lease Contracts Payable Long Term   - Includes non-current portion (i.e. principal amounts not payable within next twelve months) of amounts payable to others under capitalized lease obligations. 262 Note Payable Long Term   - Includes non-current portion (i.e. principal amounts not payable within next twelve months) of amounts payable to others under notes obligations. 263 Due Officers & Shareholders   - Includes loans from and other amounts due to officers and Shareholders. 264-277 Other Notes Payable Long Term   - Includes non-current portion (i.e. principal amounts not payable within next twelve months) of amounts payable to others under notes obligations.

EQUITY Note: Do not charge any amounts directly to the accounts in the Equity section of the Balance Sheet without first consulting with your Century Small Business Services Accountant. 281 Capital Stock  (Corp Only) Capital Contributions (Partnerships – LLCs) – For Corporations, includes the stated value of capital stock issued and outstanding. For Partnerships or LLC's. includes partner's / member's capital contributions. 283 Retained Earnings  - Includes finalized to-date corporate earnings for prior years. 284 Undistributed Taxable Income   (S-Corp only) - Includes income earned as a C-Corp prior to electing S-Corporation status. Distribution of this income should be done only in consultation with your Century Small Business Services Accountant. 285 Accumulated Adjustment Account   (S-Corp only) - Includes earnings withdrawn from the company for  all completed prior years. 287 Current Year Distribution   (S-Corp only) - Includes earnings withdrawn from the company during the current year. 290 Owners Drawing  (Sole Proprietor only) - Includes earnings withdrawn from the company during the current year. 296 Unadjusted Prior Year P/L   - Includes preliminary earnings of the company for the prior fiscal year  before completion of tax return and final close-out of year. This account will be closed out after completion of tax return. PROFIT/LOSS  - Includes to-date earnings of the company for the current year.

OPERATING STATEMENT http://www.impactaccountingllc.com/users/serview.asp?suid=1705

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SALES  - The sales revenue reported on this statement should include only revenue earned in the current period. 301 - 399 Sales Revenue  - Includes sales revenue received or earned for sales of products and services during the current accounting period.

COST OF SALES 401 - 439 Cost of Sales  - Includes purchase and production costs directly related to products and services sold during the current accounting period.

GROSS PROFIT  Equals Total Sales less Total Cost of Sales.

OPERATING EXPENSES  - are regular monthly payroll and other expenses of the business that are not directly related to sales revenue. The expenses charged to this statement should include only those expense amounts directly related to operation of the business and chargeable against sales revenue earned in the current or prior accounting periods.  Any prepaid or deferred expenses that apply against future revenues should be pulled out of operating expense and included in prepaid expenses under the Assets section of the balance sheet.  Any business revenues or charges not directly related to operation of the business (example: sublease of a portion of your office space) should be recorded as Other income and Other expense. For any Personal expenses or charges paid by the business that are not related to operation of the business, consult with your Accountant.

451 - 498 PAYROLL & RELATED EXPENSES 451 - 474 Wages & Salaries  - Includes wages, salaries and other compensation paid to regular full and part time employees. 481 F. I. C. A. Tax.   - Includes cost of employer matching of social security tax. 482 Unemployment Tax - Includes state and federal unemployment compensation taxes. 483 Employee Insurance & Benefits  -Includes gross cost of company-supplied insurance and other  benefits programs. 484 Employee Med. Reimbursements  -Includes amounts withheld from or paid by employees for  company-supplied insurance and other benefits programs. 485 Workers Compensation Insurance  - Includes cost of Workers Compensation insurance.

501 - 595 OTHER GENERAL & ADMINISTRATIVE EXPENSES 509 Outside Services - Includes charges for temporary outside help or services. 510 Operating Supplies  - Includes cost of supplies used for company operations that are not directly related to products and services and included in Cost of Sales. 511 Small Tools  - Includes cost of small tools purchased for use in the business. 512 Postage & UPS  - Includes all charges for stamps, UPS or any other type of delivery service used in sending or receiving business data. 520 Rent  - Includes all charges paid for rent of office or storage space. Does not include rent or lease of  vehicles or transportation equipment, which should be charged to Account 553 - Vehicle Lease Expense. 521 Equipment Rental   - Includes cost of all equipment rented under short-term rental agreements or noncapitalized leases. 526 Utilities - Includes all charges for heat, light, power, etc.

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529 Telephone Expense - Includes all charges as billed except for Directory Advertising. 530 Repairs & Maintenance - Includes all charges for regular repairs and maintenance of business assets, except for repairs that significantly enhance the usefulness or extend the life of the asset. Those types of  charges should be included in the appropriate asset account on the balance sheet (141-148) and depreciated over the life of the asset. 533 Security  - Includes cost of security services, alarms, guard services, etc. 534 Advertising & Promotion   - Includes all costs of advertising and promotion, including the portion of  the telephone bill applicable to directory advertising, placement of help wanted ads, signs, business cards, etc. 535 Insurance Expense  - Includes any insurance charges for office contents, professional liability, business liability, etc. Do not include Auto Insurance, which should be charged to Vehicle Expense (552). 538 Meals & Entertainment  - Includes costs of business meals while traveling as well as all funds spent for client entertainment. 539 Travel & Lodging  - Includes costs of business travel such as air fare, hotels, rental cars, taxi or limo, tips, etc. Does not include costs of meals or entertainment, which should be charged to Meals & Entertainment (539). 540 Property & Other Taxes  - Includes any other taxes related to business or professional assets and activities other than Payroll taxes or state and federal income taxes. 544 Sales & Use Tax  - Includes sales and use tax paid by company that is not collected from customers, or that is collect from customers but not segregated from reported sales revenues. 548 Permits and Licenses  - Includes cost of all business permits and licenses. 550 Interest Expense - Includes any business loan interest charges (auto, buildings, equipment). 551 Bank Charges  - Includes all bank-related charges for accounts such as service fees, lock-box or  safety deposit boxes, or other bank fees. 552 Vehicle Expense  - Includes such items as gas, oil, repairs, insurance, tires, etc. It also includes any employee reimbursements for mileage on personal vehicles. Records should be retained with payment documentation for documentation of miles traveled and purpose of trip. 554 Vehicle Lease Expense  - Includes all lease costs for vehicles leased by the company. Costs of  operating leased vehicles should be included in Vehicle Expense (552). 564 Legal and Accounting  - Includes the cost of professional legal and accounting services. 566 Office Expense  - Includes all charges for office supplies such as stationery, forms, pens and pencils, maintenance contracts on office machines, incidental office furniture and other office equipment not subject to depreciation, and any other incidental office expenses. 567 Bad Debts  - Includes charges and collection fees related to collection and/or write-off of uncollectable portion of accounts receivable. Only aged items should be recorded as Bad Debts. Write-off of current receivables should be recorded as sales returns. 574 Amortization - Includes current year amortization of Intangible Assets. 575 Depreciation - Includes current year depreciation of Fixed Assets. 576 Professional Development  - Includes cost of seminars, schools, and other forms of professional development. 580 Dues & Subscriptions - Includes charges for memberships in professional or business organizations, and all publications. 581 Laundry & Uniforms  - Includes costs of obtaining and maintaining company-required and companysupplied employee clothing or uniforms. 585 Contributions  - Charitable contributions to qualified tax-exempt charities and other qualified organizations.

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595 Miscellaneous Expenses  - includes charges for any items not included in any of the above operating expense accounts.

OTHER INCOME AND EXPENSE 901 Interest Income  - Includes interest on bank accounts, investments or Accounts Receivable owned and maintained by the business. 902 Other Income  - Includes any other business revenue received by the company that is not related to ongoing operation of the principal business (example: rental revenue from sublease of a portion of a business facility). 951-97 Other Expense  - Includes any other expenses incurred by the company that are not related to operation of the business.

3313 Northbrook Dr. Sioux City, IA 51105 Phone: (712) 224-3160

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