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:

Double-Declining-Balance Method

An accelerated method of depreciation that doubles the normal depreciation rate.

Journal Entry

A record of a transaction in the accounting journal that may affect one or more accounts.

Residual Value

The projected worth of an asset at the time of sale, after it has served its purpose.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the wear and tear, deterioration, or obsolescence of the asset.