Question

Using the following list of accounts, construct a chart of accounts for a merchandising business that rents out a portion of its building, and assign account numbers and arrange the accounts in balance sheet and income statement order (“1” for assets, and so on). Each account number should have three digits. Contra accounts should be designated with a decimal of the account (100.1 for contra of account 100). Assets and liabilities should be in order of liquidity; expenses should be in alphabetical order.

Accounts PayableInterest ExpenseSalaries Payable
Accounts ReceivableLandSales
Accumulated Depr.—EquipMerchandise Inventory Supplies Expense
Advertising Expense Notes PayableUnearned Revenue
CashOffice SuppliesUtilities Expense
Cost of Merchandise SoldOwner, Capital
Depreciation Expense—Equip.Owner, Drawing
EquipmentRent Revenue
Salaries Expense

Answer

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