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 items,each of which is tracked in real time by the AIS.In designing a chart of accounts for this business,what is the minimum number of digits necessary to represent the account codes,including subsidiary ledgers?

Question

Quizplus · Accepted Answer

Based on the size of the inventory and the small size of the business, a six-digit chart of accounts should be sufficient to represent account codes, including subsidiary ledgers. This would allow for enough detail and organization without adding unnecessary complexity. A four-digit chart of accounts may be too limited for the inventory size, and a nine-digit chart of accounts may be overly complex for a small business.

Callow Youth Clothing Is a Boutique Retailer Located in Estes