Answer to Question #242750 in Economics for Mak

Question

Assignment I
On March 1, 2020, Tahir Muktar, a famous businessman in Addis, opened a business named “Universal Garage” which is organized as a sole proprietorship. The business is established to render car repair, maintenance and related services for fees. Below are chart of accounts for and selected transactions completed by Universal Garage in March 2020.

Answer 1

Chart of accounts - a system of accounting accounts, providing for their number, grouping, and digital designation depending on the objects and purposes of accounting. The Chart of Accounts includes both synthetic (first-order accounts) and associated analytical accounts (sub-accounts or second-order accounts). The creation of a chart of accounts ensures the consistency of accounting indicators with the indicators of the current reporting.