Below is a screenshot of a sample file chart of accounts created by QuickBooks:
As you can see, Liability accounts start at 20xxx, Equity starts at 30xxx, and so on. You can clearly see which account names are which types, which make it easier to manage and analyze.
Of course, account types have subtypes, for example:
• Assets has
o Cash & Deposits (checking account, saving account, cash & others)
o Current Assets (account receivables, inventory, short term investment, & other current assets)
o Long Term Assets (furniture, land, buildings, long term investment, & other fixed assets)
o Other Assets
• Liabilities has
o Current Liabilities (account payable, short term debt, & other current liabilities)
o Long term Liabilities (long term debt/obligation & others)
You can then assign numbers to subtypes, such as 10100-10199 to Cash & Deposits, 10200-10499 to Current Assets, and so on.
When naming chart of accounts, consistency is the most important task in how you word, punctuate, abbreviate, and use space. For example:
• If you use Advertising and Promotion Expense in your expense account, which means a complete wording with space and without punctuation, then the next time you should use Postage and Delivery Expense when creating postage and delivery expense account.
• If you use Advertising&Pro. which combines word, abbreviation with punctuation, then you should use Postage&Del.