Step 3 · The chart of accounts (where money lands)

In one sentence

An "account" is a drawer in the ledger. Every entry you make picks a drawer — picking the wrong one throws no error, but your reports and tax filing will be wrong.

1

Create one if nothing fits — but ask siow first

Fig. 01-coa

---

1. You only need four categories

Type	What it means	Examples
Asset	Things the company owns	Bank balance, computers, renovation
Liability	Money the company owes	Suppliers, the director's advances, CPF
Revenue	Money coming in	Tuition, corporate training
Expense	Money spent and gone	Rent, utilities, stationery

---

2. 🔴 The big one: buying something is not always an "expense"

This is the most common beginner mistake and the hardest to unwind.

The test is one sentence: if it lasts more than a year and wasn't cheap, it's an asset, not an expense.

What you bought	Goes to	Why
A ream of A4 paper, $12	5810 Stationery → expense	Consumed
A laptop, $1,899	1410 Computers & IT → asset	Lasts years
A classroom TV, $1,200	1430 Office equipment → asset	Same
Renovation, $28,000	1440 Renovation → asset	Same
This month's rent, $4,500	5300 Rent → expense	Gone with the month

Why the split matters

Singapore tax treats computers and renovation completely differently from ordinary expenses:

• Computers (Section 19A) can be written down in one year
• Renovation (Section 14Q) is spread over three years, capped at S$300,000 per three-year period
• Ordinary expenses are deducted as incurred

We deliberately split fixed assets into four accounts (1410 computers / 1420 furniture / 1430 office equipment / 1440 renovation) so they can be pulled out at filing time. Lump them together and someone re-sorts hundreds of receipts at year end.

When unsure: ask John, don't guess.

---

3. Accounts you'll use daily

Spending (expenses)

5300 Rent · 5400 Utilities · 5810 Stationery · 5820 Repairs · 5830 Marketing · 5840 Telecom · 5860 Travel · 5920 Teaching materials · 5930 Government fees · 5990 Sundry

Buying (assets)

1410 Computers & IT · 1420 Furniture & fittings · 1430 Office equipment · 1440 Renovation

Earning (revenue)

4150 Tuition income · 4100 Service revenue (corporate training)

Owing (liabilities)

2000 Trade payables · 2600 Due to director · 2610 Staff reimbursement payable

---

4. When nothing fits

Two options, in order:

1. Use 5990 Sundry and move on. Getting it recorded beats getting it perfect — a missing entry is a real problem, a mis-classified one can be moved any time.
2. Once you have a few of the same kind, tell John and let him decide whether to open a dedicated account. You can create one yourself (New Account), but ask first — otherwise the chart turns into a mess fast.

---

5. Nothing to do on this page

The chart is already set up (66 accounts). This step is just so you can read it; you'll use it constantly in the steps below.