Callow Youth Clothing is a boutique retailer located in Estes Park,Colorado.It is a sole proprietorship that stocks an inventory of between 80 and 160 different products.Inventory is updated in real time by the AIS.When designing a chart of accounts for this business,what is the minimum number of digits necessary to represent the general ledger account code,including subsidiary ledgers?
A) 4
B) 6
C) 7
D) 9

Question

Quizplus · Accepted Answer

The minimum number of digits necessary to represent the general ledger account code, including subsidiary ledgers, is six. This is because there are different categories of accounts that need to be accounted for, such as assets, liabilities, equity, income, and expenses, and each category may have several sub-accounts. Using a six-digit code allows for enough flexibility to accommodate all these different accounts and sub-accounts, while still being manageable and easy to use.

Callow Youth Clothing Is a Boutique Retailer Located in Estes