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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Chart of accounts

Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical order, as follows:

Accounts Payable Accounts Receivable

Accumulated Depreciation—Office Equipment Accumulated Depreciation—Store Equipment Advertising Expense Cash

Cost of Merchandise Sold Customer Refunds Payable Delivery Expense

Depredation Expense—Office Equipment

Depreciation Expense—Store Equipment

Estimated Returns Inventory

Insurance Expense

Interest Expense

Kailey Gamer, Capital

Kailey Gamer, Drawing

Land

Merchandise Inventory

Miscellaneous Administrative Expense

Miscellaneous Selling Expense

Notes Payable

Office Equipment

Office Salaries Expense

Office Supplies

Office Supplies Expense

Prepaid Insurance

Rent Expense

Salaries Payable

Sales

Sales Salaries Expense

Store Equipment

Store Supplies

Store Supplies Expense

Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 2. Each account number is three digits: the first digit is to indicate the major classification (1 for assets. for example); the second digit is to indicate the subclassification (11 for current assets, for example); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Merchandise Inventory, etc.).

To determine

Chart of Accounts

To Prepare: A chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order.

Explanation

Prepare the chart of accounts.

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