Structure of CAS

The essentials

A CAS is built on an organised chart of accounts: a list of all account heads arranged in a hierarchy. At the top are the main groups (assets, liabilities, capital, revenues and expenses); below them are sub-groups, and at the lowest level are the individual ledger accounts where transactions are recorded. Each account is given a unique code so that it can be identified and processed quickly.

Key points

• Hierarchy example: Assets → Current Assets → Trade Receivables → individual customer accounts.
• Codification: assigning codes to accounts so they can be sorted and grouped.
• Sequential codes: numbers or letters given in the order in which items occur (such as voucher or cheque numbers).
• Block codes: a range of numbers reserved for each category, for example 100–199 for one group and 200–299 for another.
• Mnemonic codes: letters that help recall the account, for example "SAL" for sales.
• Good codes are unique, simple, consistent and allow for future expansion.

Exam tips

Learn one example of each type of code. A typical question gives a code and asks you to identify its type.

Common mistakes

• Calling mnemonic codes "block codes" because they are grouped.
• Placing an individual ledger account above its group in the hierarchy.