AFE Quiz 4: Chart of Accounts

What is a chart of accounts?

A list of all customers and suppliers
A list of all accounts used by a business
A summary of financial statements
A list of all employees

Which of the following is typically NOT included in a chart of accounts?

Assets
Liabilities
Owner’s Equity
Payroll Schedules

What is the main purpose of assigning account numbers in a chart of accounts?

To make accounts easier to identify and organize
To hide accounts from auditors
To track employee performance
To calculate tax rates

If an account number starts with “1”, what type of account is it usually?

Liability
Expense
Asset
Revenue

Which of the following would most likely be found in the expense section of a chart of accounts?

Accounts Receivable
Wages Expense
Notes Payable
Owner’s Capital

Which section of the chart of accounts would “Sales Revenue” most likely appear in?

Asset
Liability
Revenue
Expense

Which of the following is a benefit of using a well-organized chart of accounts?

It simplifies financial reporting
It hides transactions from auditors
It increases tax liability
It eliminates the need for bookkeeping

Which of the following accounts is most likely to have a credit balance?

Cash
Accounts Payable
Rent Expense
Supplies

How are accounts typically grouped in a chart of accounts?

Alphabetically
By account type/category
By the amount of money in each account
By department

Which of the following best describes “Owner’s Drawings” in a chart of accounts?

An asset account
A liability account
An equity account
An expense account

ACCOUNTING for Everyone