Analytical Accounting

Some European countries use two types of accounting systems. (The United States and most other countries use only one.)

The general accounting system is a legal obligation. It must conform to certain accounting principles and must represent a fair picture of the financial situation of the company by producing a balance sheet and a profit and loss statement. Its foundation is the Chart of Accounts, made up of eight classes. Classes 1-5 are balance sheet accounts and classes 6 and 7 (expenses and revenues) are used for the profit and loss statement. All journals and accounts post to the General Ledger.

The second accounting system used in some countries is called Analytical Accounting. Its main purpose is to track expense and revenue accounts by categories in order to derive profit and loss by activity. Its foundation is a separate Chart of Accounts made up of a single class (class 9). Its journals and accounts post to a separate ledger (the Analytical Ledger.)