Assume that you are creating a chart of accounts for a company. Each account number will have two digits. The first digit indicates the major account group to which the account belongs. Which of the following correctly identifies the major account groups typically represented by the numbers 1 through 5?
A) 1-Assets, 2-Liabilities, 3-Owner's Equity, 4-Expenses, 5-Revenues
B) 1-Assets, 2-Liabilities, 3-Owner's Equity, 4-Revenues, 5-Expenses
C) 1-Assets, 2-Owner's Equity, 3-Revenues, 4-Expenses, 5-Drawing
D) 1-Owner's Equity, 2-Drawing, 3-Revenues, 4-Expenses

Question

Quizplus · Accepted Answer

The generally accepted order for the major account groups is:
1-Assets, 2-Liabilities, 3-Owner's Equity, 4-Revenues, 5-Expenses.

This order is to ensure that financial statements are prepared in the correct format for presentation and analysis. Therefore, option B is the correct choice.

Assume That You Are Creating a Chart of Accounts for a Company