Monet Paints Co. is a newly organized business with a list of accounts arranged in alphabetical order below.
Accounts Payable
Accounts Receivable
Accumulated Depreciation—Office Equipment
Accumulated Depreciation—Store Equipment
Advertising Expense
Capital Stock
Cash
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 Discounts
Sales Returns and Allowances
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 7. 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 sub-classification (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).