How Does an Account Get Name and Number in Chart of Accounts?
A company has a general ledger to note down all accounts for measuring gross profits or losses. There you can find various accounts holding detailed information on different transactions. It is useful for calculating at the end of a fiscal year. What needs more attention is how after creating an account you’ll name and number them? For this reason you should get Account names and numbers Assignment Help from us at 24x7assignmenthelp.com.
What is Chart of Accounts?
The first thing that you will face when learning with Account names and numbers Assignment Help is Chart of Accounts. Basically this is a general ledger containing all names and numbers of accounts created for book keeping. Both income and expenses are listed inside it.
The closest example will be found when you’ll read a content table. In there you will get a list of topics and the pages they are on. In a chart of accounts too you will get the names and numbers of accounts in a ledger. It helps a lot for searching quickly. Just as you can read content chart in the beginning so you can find chart of accounts in the beginning of bookkeeping ledger.
How to create a chart of accounts?
From Account names and numbers Homework Help you’ll notice that the chart of accounts generally follows accounting equation. For this reason, very first account to appear is
- Asset
- Liability
- Equity
- Income
Expense comes in the end of chart because it is longest among others. The order comes alphabetically. Since this is a long list, similar expenses are written under same account names.
With each name of those accounts you’ll have to place numbers. These are Level 1 accounts so they require separate ledger pages. That is why numbers are also separate from each other. There is a main number and then it is divided under details. You can check out some examples found from Account names and numbers Homework Help.
For example, if you have Assets as in number 1000 and subcategory, current assets start in number 1101. So when you’ll need to place Petty cash in assets then you’ll place them under asset number 1000 and continuously following after current asset number 1101. So you can easily write it down under 1102 or 1103 etc.
How to improve faster?
Account names and numbers are not something separately studied. You need to learn about accounts first. You can take time to gather information on definitions and types of accounts. The classification of each account and then studying their subcategories are important. Only by learning these interconnected topics can you grab a full view in account names and numbers.
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