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Questions and Answers
What happens to accounts in the chart of accounts if any transaction has been posted to them or if there is a non-zero balance?
What happens to accounts in the chart of accounts if any transaction has been posted to them or if there is a non-zero balance?
- They are combined with other accounts to simplify the chart of accounts
- They would not generally be removed (correct)
- They are automatically closed at the end of the accounting period
- They are reclassified into different categories
What is the purpose of a chart of accounts (COA)?
What is the purpose of a chart of accounts (COA)?
- To calculate the organization's total assets and liabilities
- To list financial accounts for an organization and record transactions in the general ledger (correct)
- To determine the organization's equity and capital structure
- To provide a summary of the organization's revenue and expenses
How are accounts usually grouped in a chart of accounts?
How are accounts usually grouped in a chart of accounts?
- Randomly for flexibility in recording transactions
- Into categories such as assets, liabilities, equity, revenue, and expenses (correct)
- Based on the date of opening the account
- Into alphabetical order for easy reference
In many computerized environments, what type of identifiers are allowed for account numbers in the chart of accounts?
In many computerized environments, what type of identifiers are allowed for account numbers in the chart of accounts?
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What can account numbers in a chart of accounts be associated with?
What can account numbers in a chart of accounts be associated with?
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