A chart of accounts for a business: Select one: a. lists the accounts in the ledger....

A chart of accounts for a business:

Select one:

a. lists the accounts in the ledger.

b. shows the balance of each account in the general ledger.

c. is a graph.

d. indicates the amount of profit or loss for the period.

Solutions

Expert Solution

The correct answer is Option(A) List the accounts in the ledger.

Explanation:-

(A) A chart of accounts is a tool that the company prepares in order to list every account in the general ledger being run and maintained by the business and further divided into sub-categories of accounts. Therfore, the option is correct. A sample of a chart of accounts prepared by a business is given below:-

(B) A chart of accounts is just a listing of accounts wilth the respective account numbers and account type and it doesn't include or show any balance of the accounts listed. Therefore, the option is incorrect.

(C) A chart of accounts is a tabular representation of accounts and thus graphs are not used while preparing it. Therefore, the option is incorrect.

(D) It is the income statement that shows the profit or loss made during the period not the chart of accounts. Therefore, the option is incorrect.

ekkarill92 answered 1 year ago

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