Answer to Question #79321 in Finance for Hugh Heron
Describe some of the problems that might arise from a failure to maintain and update an existing Chart of Accounts.
In practice, the COA serves as the foundation for a company’s financial record keeping system. It provides a logical structure that facilitates the addition of new accounts and deletion of old accounts.
Within the COA, accounts will be typically listed in order of their appearance in the financial statements. Typically, Balance sheet accounts are listed first followed by the income statement accounts.
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