assignment of an identification number to each account in the financial statements. A chart of accounts lists the account titles and account numbers being used by a business. For example, the numbers 1 to 29 may be used exclusively for asset accounts; numbers from 30 to 49 may be reserved for liabilities; numbers in the 50s may signify owners' equity accounts; numbers in the 60s may represent revenue accounts; and numbers from 70 to 99 may designate expense accounts. In large or complex businesses with many more accounts, a more elaborate coding system would be needed. Some companies use a four-digit coding system. The coding system is especially necessary for computerized accounting.
assignment of an identification number to each account in the financial statements. A chart of accounts lists the account titles and account numbers being used by a business. For example, the numbers 1 to 29 may be used exclusively for asset accounts; numbers from 30 to 49 may be reserved for liabilities; numbers in the 50s may signify owner's equity accounts; numbers in the 60s may represent revenue accounts and numbers from 70 to 99 may designate expense accounts. In large or complex businesses with many more accounts, a more elaborate coding system would be needed.
