The Chart of Accounts is a vital bookkeeping tool that provides businesses with a system to organize their financial activity. It consists of categories (also known as accounts) that are used to classify transactions, enabling managers and accounting professionals to easily interpret the data and make pertinent decisions. Each category on the Chart of Accounts contains a unique identification code and description, making it easy to identify what is being tracked. With categories that range from cash and expenditures to assets and liabilities, the Chart of Accounts helps ensure that all necessary information and associated costs are captured so that financial health can be accurately assessed.