Chart of accounts › Economic sectors › Primary sector
Sector 1 of 5 · Extraction of natural resources
Primary sector: most-used accounting accounts
It obtains resources directly from nature. Here the business depends on the land, the sea or the subsoil. The balance sheet is dominated by land, machinery and inventories of supplies and harvests. The most-used accounts revolve around the production season, the financing of machinery and the replacement of equipment.
Activities included
- Agriculture (crops, cereals, fruit, vegetables)
- Livestock (meat, milk, eggs, wool)
- Fishing and aquaculture
- Forestry (timber)
- Mining and extraction (coal, oil, gas, minerals)
- Beekeeping, hunting and similar extractive activities
Characteristic accounts of this sector
These 27 accounts of the chart best distinguish this sector. Tap one to open its full page: definition, when it is debited and credited, and common mistakes. Account pages are currently in Spanish and show the English and French names.
27 accounts
1Assets 13
- 1121Raw materials inventorySeeds, fertilizers, agrochemicals, animal feed, ice and fuel for the operation.Debit
- 1122Work in progressGrowing crops or animals being fattened, when their costs are accumulated until harvest or sale.Debit
- 1123Finished goods inventoryHarvests, milk, eggs, wool or fish that are ready to sell.Debit
- 1124Goods in transitImported supplies, or export products that have left but have not yet arrived.Debit
- 1125Inventory obsolescence allowancePerishable or slow-moving products that lose value before they are sold.Credit
- 1131Advances to suppliersAdvance payments for seeds, supplies or equipment before the season.Debit
- 1201LandFarmland, pasture, farms, mine sites or concessions used in the activity.Debit
- 1202BuildingsBarns, sheds, greenhouses, silos and packing plants.Debit
- 1203Machinery and equipmentTractors, irrigation systems, milking machines, vessels and drilling equipment.Debit
- 1206Motor vehiclesTrucks and field vehicles.Debit
- 1207Leasehold improvementsDrainage, fences or facilities built on leased land or premises.Debit
- 1208Construction in progressSheds, wells or facilities under construction that are not yet operating.Debit
- 1210Right-of-use assetsMulti-year leases of land, machinery or vessels (IFRS 16).Debit
2Liabilities 5
- 2102Notes payablePromissory notes with input suppliers or agricultural lenders.Credit
- 2104Current portion of long-term debtPortion of the seasonal or equipment loan due within one year.Credit
- 2112Customer advances (deposits)Advance payments for harvests or production not yet delivered.Credit
- 2117ProvisionsFuture costs of restoring land or closing mines and wells (IAS 37).Credit
- 2201Long-term bank loansLoans to buy land, machinery or vessels.Credit
3Equity 1
4Income 2
5Costs 3
6Expenses 3
- 6111Repairs and maintenanceRepair of tractors, irrigation pumps, nets, vessels or extraction equipment.Debit
- 6112Fuel and transportDiesel, gasoline and transport of the output to market.Debit
- 6119Loss on disposal of assetsLoss on selling or writing off equipment or land below its carrying amount.Debit
Typical entry in this sector
Purchase of seeds and fertilizer on credit for 4,000.
| Account | Debit | Credit |
|---|---|---|
| Raw materials inventory | 4,000.00 | |
| Accounts payable (trade creditors) | 4,000.00 | |
| Totals | 4,000.00 | 4,000.00 |
Accounts this chart does not include
This sector usually also needs accounts that are created as sub-accounts or in a specialized chart:
- Biological assets. Animals and crops measured at fair value (IAS 41).
- Exploration and evaluation assets. Mining and oil exploration costs (IFRS 6).
- Depletion of natural resources. Wearing out of mines, wells and forests, instead of depreciation.
- Government grants. Aid to farmers and fishers (IAS 20).
See the 41 accounts common to all sectors
Almost every business, whatever its sector, uses these accounts: cash and banks, customers and suppliers, taxes, basic payroll, capital and equity, and general expenses.
- 1101Cash on handDebit
- 1102Petty cashDebit
- 1103Cash at bankDebit
- 1104Cash equivalentsDebit
- 1110Accounts receivable (trade debtors)Debit
- 1116Input VAT (VAT recoverable)Debit
- 1117Prepaid income taxDebit
- 1130Prepaid expensesDebit
- 1204Furniture and office equipmentDebit
- 1205Computer equipmentDebit
- 1209Accumulated depreciationCredit
- 1231Long-term receivablesDebit
- 2101Accounts payable (trade creditors)Credit
- 2105Wages and salaries payableCredit
- 2106Social security payableCredit
- 2107Withholding taxes payableCredit
- 2108Output VAT (VAT payable)Credit
- 2109Income tax payableCredit
- 2110Accrued expensesCredit
- 2111Interest payableCredit
- 2114Dividends payableCredit
- 3101Share capitalCredit
- 3104Legal reserveCredit
- 3107Retained earningsCredit
- 3108Profit (loss) for the yearCredit
- 3109Dividends declaredDebit
- 3111Owner's drawingsDebit
- 4201Finance income (interest income)Credit
- 4202Other incomeCredit
- 6101Salaries and wages expenseDebit
- 6102Employer payroll taxesDebit
- 6103Rent expenseDebit
- 6104Utilities expenseDebit
- 6105Depreciation expenseDebit
- 6108Insurance expenseDebit
- 6109Professional feesDebit
- 6113Office suppliesDebit
- 6115Bank chargesDebit
- 6116Interest expenseDebit
- 6118Income tax expenseDebit
- 6121Other expensesDebit