Which of the following is a correct numbering system for a chart of accounts?
A) Office supplies is numbered 0145.
B) Notes payable is numbered 20.
C) Advertising expense is numbered 877.
D) Interest revenue is not given an account number because it is not used on a monthly basis.

Question

Quizplus · Accepted Answer

The numbering system for a chart of accounts typically follows a hierarchical structure where accounts are grouped and numbered according to their category and subcategory. Therefore, it is more appropriate to assign a two-digit number, such as 20, to a category of accounts, such as liabilities, rather than to individual accounts such as notes payable. Options A and C use four-digit account numbers which go beyond the standard numbering system. Option D is incorrect because interest revenue is still an account that should be assigned a number even if it is not used monthly.

Which of the Following Is a Correct Numbering System for a Chart