The system of social accounts described in this article is based on the following five principles:(1) Producers of goods and services are working organizations which represent groups of people or individuals organized for the purpose of earning a living by producing goods and services that satisfy individual or collective needs. Business, government, profit and nonprofit, corporate and unincorporated working organizations are treated in a uniform way.(2) Since the behaviors of the market and non‐market sectors differ considerably, these two sectors are consistently separated throughout the accounting system.(3) There are four basic activities: (a) production, (b) consumption, (c) investment, and (d) income redistribution. These call for four separate accounts: (a) Working Organizations, (b) Households, (c) Community, including government and certain non‐government institutions, and (d) Accumulation. The fifth account, Rest of the World, serves for balancing purposes.(4) The same classifications of transactions are used for activities and institutions, making possible complete matching of social product and financial flows accounts.(5) The system strives to achieve the maximum analytical flexibility. Some of its possibilities are visible from the classification of industries: A. Market (Material) Sector: 1. Agriculture, II. Forestry, III. Mining and Manufacturing, IV. Construction, V. Transportation, VI. Trade and Catering, VII. Handicrafts; B. Non‐Market (Non‐Material) Sector: VIII. Housing and Communal Economy, IX. Education, Culture, and Social Welfare, X. Public Services Social Organizations (Political, Religious, etc.), Finance and Insurance, Public Administration and Judiciary, National Defence. Sector A corresponds to the material definition of social product. Sectors A + B correspond to the SNA definition. Sectors A + B minus Industry × reflects the welfare definition. Further, Industries I‐IV produce goods, V‐VII market services, VIII and IX non‐market services with welfare content, X intermediate nonmarket services, V