Question

multiple choice question
which of the following statements is the best definition of the chart of accounts?

it is a book of original entry that includes a chronological record of all transactions that have occurred within a business.
it is a list of each account and its balance at any given time.
it is a collection of all accounts with their activity and the balances that exist in a business.
it is a list of all ledger accounts in a business and includes an identification number assigned to each account.

need help? review these concept resources.

read about the concept

Explanation:

• A book of original chronological transactions is a journal, not a chart of accounts.
• A list of accounts with their balances at a time is a trial balance.
• A collection of accounts with activity/balances is the general ledger.
• The chart of accounts is specifically a numbered list of all ledger accounts used by a business.

Answer:

It is a list of all ledger accounts in a business and includes an identification number assigned to each account.