Using the List of Accounts Below, Construct a Chart of Accounts

question 142

Essay

Using the list of accounts below, construct a chart of accounts for a merchandising business that rents out a portion of its building, and assign account numbers and arrange the accounts in balance sheet and income statement order
("1" for assets, and so on). Each account number should have three digits. Contra accounts should be designated with a decimal of the account
(100.1 for contra of account 100). Assets and liabilities should be in order of liquidity; expenses should be in alphabetical order.? $$\begin{array} { | l | l | l | } \hline\text { Accounts Payable } & \text { Interest Expense } & \text { Salaries Payable } \\\hline \text { Accounts Receivable } & \text { Land } & \text { Sales } \\\hline \text { Accumulated Depr.-Equip. } & \text { Merchandise Inventory } & \text { Supplies Expense } \\\hline \text { Advertising Expense } & \text { Notes Payable } & \text { Unearned Revenue } \\\hline & & \\\hline \text { Cash } & \text { Office Supplies } & \text { Utilities Expense } \\\hline \text { Cost of Merchandise Sold } & \text { Owner, Capital } & \\\hline \begin{array} { l } \text { Depreciation Expense- } \\\text { Equip. }\end{array} & \text { Owner, Drawing } & \\\hline \text { Equipment } & \text { Rent Revenue } & \\\hline & \text { Salaries Expense } & \\\hline\end{array}$$

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Definitions:

General Partner

A general partner is an owner of a partnership who has unlimited liability and is typically involved in the day-to-day management of the business.

Share of Profit

An individual's or entity's portion of the net profits derived from a business venture, investment, or partnership.

Conversion

The wrongful act of taking or using someone else's property without permission, treating it as if it were one's own.

Preferred Stock

A class of share ownership in a corporation that typically confers priorities over common stock in dividend payments and upon liquidation.