Account Classification Rubric

Document Reference: ACR-2084-02

Effective Date: [Month, Day Year]

This document outlines our company's Account Classification Rubric, a systematic approach to categorize financial accounts for efficient management and reporting. This rubric ensures consistency and clarity in our financial documentation and analysis.

Classification Criteria

The accounts are classified based on the following criteria:

• Nature of Transaction (Revenue, Expense, Asset, Liability, Equity)

• Frequency of Transaction (Regular, Occasional, Rare)

• Amount Range (Small, Medium, Large)

Account Categories

Revenue Accounts

1. Regular Income: Recurring revenue streams

2. Occasional Income: Non-recurring or seasonal income

3. Other Income: Miscellaneous or infrequent income sources

Expense Accounts

1. Operational Expenses: Regular business operation costs

2. Capital Expenses: Infrequent, high-value expenditures

3. Miscellaneous Expenses: Unplanned or irregular expenses

Asset Accounts

1. Current Assets: Assets convertible to cash within a year

2. Fixed Assets: Long-term tangible assets

3. Intangible Assets: Non-physical assets with value

Liability Accounts

1. Short-term Liabilities: Obligations due within a year

2. Long-term Liabilities: Obligations due beyond a year

Equity Accounts

1. Owner's Equity: Owner's investment in the business

2. Retained Earnings: Profits reinvested in the business

Rubric for Classification

Account Type	Frequency	Amount Range	Example
Revenue	Regular	Small-Medium	Sales Revenue
Revenue	Occasional	Large	Asset Disposal Gain
Expense	Regular	Small	Utility Bills
Expense	Rare	Large	Machinery Purchase
Asset	-	Medium-Large	Office Building
Liability	-	Medium	Bank Loan
Equity	-	Large	Shareholder Capital

Application of Rubric

To demonstrate the application of this rubric, consider the following financial transactions:

• Transaction A: Sale of goods totaling $5,000 (Regular, Small-Medium, Revenue)

• Transaction B: Purchase of a new office computer for $1,200 (Rare, Small, Expense)

• Transaction C: Receipt of a bank loan for $50,000 (Large, Liability)

According to our rubric:

• Transaction A is classified under Regular Revenue.

• Transaction B falls under Rare Expenses.

• Transaction C is categorized as a Medium Liability.

Prepared By: [Finance Department Head Name]

Reviewed and Approved By: [Chief Financial Officer Name]

Document Completion Date: [Month Day, Year]

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