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Chapter%202 - CHAPTER 2 OVERVIEW OF BUSINESS PROCESSES 2.2...

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CHAPTER 2 OVERVIEW OF BUSINESS PROCESSES 2.2 Adapted from the December 1973 CMA Exam (Part 5, Question 2) A six-digit code (represented by the letters ABCDEF) should be sufficient to meet Dilley & Company’s needs: A This digit would identify the division (there are only 4 presently) plus the corporate office B This digit would represent the major account type (asset, liability, equity, revenue, and expense). C This digit would represent the major classification within account type: For balance sheet accounts, this would represent specific sub-categories (current assets, plant and equipment, etc.), as only six categories are needed. For expense and revenue accounts, this digit would represent the product group, as again there are only five products plus general costs. D This digit would represent specific accounts or cost centers: For balance sheet accounts, this would be the control account; one digit is adequate because the problem says no more than 10 categories. For expense accounts, this would be the cost center; one digit is adequate because the problem indicates no more than 6 cost centers.
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