Chart of Accounts Coding
Bumble Beasley Attempted to Design a Hierarchical

question 9

Essay

Chart of accounts coding
Bumble Beasley attempted to design a hierarchical chart of accounts in the following format: x.y.z. "X" stands for the type of account (1 = asset, 2= liability, etc.), while "Y" indicates whether the account is current (1) or non-current (2). If the current/non-current designation doesn't apply, "Y" is the number "zero." "Z" identifies the specific account. He developed the following account numbers:
Identify the accounts that are correctly coded. $$\begin{array} { | l | l | } \hline 2.1 .1 & \text { Accounts payable } \\\hline 3.1 .1 & \text { Capital stock } \\\hline 1.1 .1 & \text { Cash } \\\hline 3.0 .1 & \text { Cost of goods sold } \\\hline 4.0 .2 & \text { Depreciation expense } \\\hline 1.2 .2 & \text { Equipment } \\\hline 1.1 .3 & \text { Interest payable } \\\hline 2.1 .2 & \text { Inventory } \\\hline 3.2 .1 & \text { Land } \\\hline 2.2 .1 & \text { Long-term notes payable } \\\hline 3.0 .1 & \text { Retained earnings } \\\hline 4.1 .1 & \text { Sales } \\\hline\end{array}$$

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Definitions:

Monetary Policy

Actions by a central bank or other regulatory authority to influence a nation's money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.

Fiscal Policy

Government policies related to taxation and public spending with the aim of influencing economic conditions, including growth, inflation, and unemployment rates.

Legislation

Laws and statutes that are enacted by a legislative body through its legislative process.

Marginal Propensity

The portion of additional income that an individual spends on consuming goods and services, as opposed to saving.