Question

To be effective, the chart of accounts must

A) not use alpha-numeric characters.
B) contain sufficient detail.
C) utilize only one coding technique.
D) begin with account 001.

Answer 1

The chart of accounts must contain sufficient detail; it can use alpha-numeric characters, multiple coding techniques, and does not need to begin with any specific account number.

Step-by-step explanation:

To be effective, the chart of accounts must contain sufficient detail to accurately reflect the company's transactions and maintain organizational control.

A chart of accounts does not necessarily need to avoid alpha-numeric characters, utilize only one coding technique, or start with account 001.

Instead, the key is that the chart of accounts is designed to provide a clear structure that allows for easy identification and processing of financial information.

It can be adapted to the size and complexity of the business, therefore it might use alpha-numeric characters for better identification, can incorporate multiple coding techniques, and does not need to start with any specific number or code.