Preheat the oven to 350°F. Grease and flour two 9-inch round baking pans.
PREPARE THE CAKE:
In a large bowl, whisk together the sugar, flour, cocoa, baking powder, baking soda and salt. Add the eggs, milk, oil and vanilla; use an electric mixer to beat for 2 minutes. Stir in the water (batter will be thin). Divide the batter evenly between the prepared pans.
Bake 30 to 35 minutes or until a wooden pick inserted into the center comes out clean. Cool 10 minutes; remove from the pans to wire racks. Cool completely.
PREPARE THE FROSTING:
Melt the butter. Stir in the cocoa. Alternately add sugar and milk, beating to spreading consistency. Add a small amount of additional milk, if needed. Stir in the vanilla.
Notes
*Double the frosting recipe if you'd like a good amount of frosting to work with. Pictures in this post show a cake with double the amount of frosting.
ONE PAN: You can bake this same cake batter in a 9x13-inch pan (greased and floured) for 35 to 40 minutes.
CUPCAKES: Put cupcake papers in a muffin pan, fill each 2/3 full with batter, and bake 22 to 25 minutes
BUNDT: Grease and flour a tube pan, fill with cake batter and bake 50 to 55 minutes.
THREE LAYERS: Grease and flour three 8-inch pans. Divide batter evenly between the pans and bake 30 to 35 minutes.