On January 1, Cassie Harris and Other Stockholders Established a Catering

question 92

Essay

On January 1, Cassie Harris and other stockholders established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two digit account numbering scheme that is consistent with the rules of a proper chart of accounts.
1. Cash
2. Supplies
3. Equipment
4. Accounts Payable
5. Common Stock
6. Wages Expense
7. Rent Expense
8. Truck
9. Utilities Expense
10. Dividends
11. Truck Expense
12. Prepaid Insurance
13. Fees Earned
14. Miscellaneous Expense
15. Insurance Expense
16. Notes Payable
17. Accounts Receivable

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Definitions:

Estimated Average Annual Income

An approximation of the amount of money one is expected to earn on average each year, considering various income sources over a specified period.

Average Investment

The mean value of all investments held over a specific period, used to assess overall investment performance.

Estimated Average Annual Income

An approximation of the amount of money an individual or business expects to earn in an average year.

Straight-Line Method

A method of amortizing a bond discount or premium that provides for equal amounts of discount (or premium) to be written off to interest expense each period.