Question

In: Accounting

For each of the following items, indicate whether a sequential, block, group, alphabetic, or mnemonic code would be most appropriate (you may list

For each of the following items, indicate whether a sequential, block, group, alphabetic, or mnemonic code would be most appropriate (you may list multiple methods; give an example and explain why each method is appropriate):

a. state codes

b. check number

c. chart of accounts

d. inventory item number

e. -bin number (inventory warehouse location)

f. sales order number

g. vendor code

h. invoice number

i. customer number

Solutions

Expert Solution

a.

state codes—alphabetic code, i.e. PA, this method is appropriate because it corresponds with the postal services abbreviation and is meaningful to humans.

b.

check number—numeric, sequential. This method allows the checks to be examined to determine if any are missing.

c.

chart of accounts—block coding since this method allows a whole class of items to be restricted to a specific range. i.e. assets 100-199, liabilities 200-299, equity accounts, 300-399.

d.

inventory item number—alpha-numeric. The numeric portion allows the items to be easily sorted and found. The alphabetic portion allows more combinations to be made with fewer digits or characters. i.e. 2000A, 2000B, 2000C could represent virtually the same inventory item but in three different sizes.

e.

bin number (inv warehouse location)—group codes since certain digits may be used to represent which warehouse, certain digits may be used to represent floor, certain digits may be used to represent rows, certain digits may be used to represent bins. i.e. 211225 could represent warehouse 2, floor 1, row 12, and bin #25.

f.

sales order number—numeric, sequential. This method allows the sales orders to be examined to determine if any are missing.

g.

vendor code—alpha-numeric. The alphabetic portion allows more meaningful codes to be used and found. The numeric portion allows different firms with similar names to be distinguished. i.e. ALPH01, ALPH02 where ALPH01 is the vendor code for Alphahydraulics and ALPH02 is the vendor code for Alpha Trucking Services. Once the name of the company is known, finding the vendor code is much easier than if only numbers are used.

h.

invoice number—numeric, sequential. This method allows the invoices to be examined sequentially. Gaps in the sequence may signify missing invoices.

i.

customer number—same as for vendor code.

 


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