Question

The Grouping of Accounts means the classification of data from ______.

Options

• Asset, liabilities and capital

• Asset, capital, liabilities, revenue and expenses

• Asset, owners equity, revenue and expenses

• None of the above.

Answer 1

The Grouping of Accounts means the classification of data from assets, capital, liabilities, revenue and expenses.

Explanation:

Grouping of accounts means classifying transactions into the main account classes: assets, liabilities, capital (owners’ equity), revenues and expenses, which follows the accounting equation Assets = Liabilities + Capital + (Revenues − Expenses) and allows preparation of the balance sheet and profit & loss statement.