The Numbering System Used in a Company's Chart of Accounts

question 18

Multiple Choice

The numbering system used in a company's chart of accounts:

• A) Is the same for all companies.
• B) Is determined by generally accepted accounting principles.
• C) Depends on the source documents used in the accounting process.
• D) Typically begins with balance sheet accounts.
• E) Typically begins with income statement accounts.

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Definitions:

Credit

An accounting entry that increases liabilities or equity or decreases assets, representing a transfer of value in financial transactions.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts to verify that total debits equal total credits.

Mathematical Equality

A situation in mathematics where two expressions are equivalent in value, denoted by the equal sign.

Ledger

A comprehensive book or database of financial accounts where all transactions are recorded, typically categorized by account.