What are the purposes of accounting codes? How are they used? What is the importance of getting the coding system right the first time?
1 Scope of Ledger: Ledger is referred as entire group of accounts. Companies may use various kinds of ledgers. A General ledger contains accounts of all assets, liabilities, Owner's equity, Revenues and expenses.
2 Chart of Accounts: The number and types of accounts may differ according to requirements of a company. Small companies may have limited number of accounts while big corporations may require may keep separate accounts for each type of accounts. Most companies list their accounts in a chart of accounts and assign the numbers in a sequence from a group of numbers i.e. interval like ...
The purpose of accounting codes and how they are used is discussed.