Chart of accounts

Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical  order,  as follows:

 

 

Accounts Payable Accounts Receivable

Accumulated Depreciation—Office Equipment Accumulated Depreciation—Store Equipment Advertising Expense

Cash

Common Stock

Cost of Merchandise Sold Delivery Expense

Depreciation Expense—Office Equipment Depreciation Expense—Store Equipment Dividends

Income Summary Insurance Expense Interest Expense Land

Merchandise Inventory

 

Miscellaneous Administrative Expense Miscellaneous Selling Expense

Notes Payable Office Equipment

Office Salaries Expense Office Supplies

Office Supplies Expense Prepaid Insurance

Rent Expense Retained Earnings Salaries Payable Sales

Sales Salaries Expense Store Equipment Store Supplies

Store Supplies Expense

 

Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 9. Each account number is three digits: the first digit is to indicate the major classification (1 for assets, and so on); the second digit is to indicate the subclassification (11 for current assets, and so on); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Merchandise Inventory, 115 for Store Supplies, and so   on).