Your chart of accounts is used as a means to explain the types of transactions your business is engaging in. If you don’t adequately name your chart of accounts with conventional naming, you could confuse or mislead investors and other stakeholders. As a recent example, I worked with a company that had a chart on their P&L called “Investment Income.” This, to a seasoned investor or user of financial statements, could be misleading. This would imply that you generated income from an investment of some sort, rather than receiving cash for an investment into your business. As such, having clear naming conventions is critical for your startup or small business.