Gemini Co. is a newly organized business with a list of accounts arranged in alphabetical order below.
Miscellaneous Administrative Expense
Miscellaneous Selling Expense
Accumulated Depreciation—Office Equipment
Accumulated Depreciation—Store Equipment
Office Salaries Expense
Cost of Merchandise Sold
Office Supplies Expense
Depreciation Expense—Office Equipment
Depreciation Expense—Store Equipment
Sales Returns and Allowances
Jung Qiang, Capital
Sales Salaries Expense
Jung Qiang, Drawing
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 6. 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, and so on).