Professor Drebin’s Executive MBA students were recently discussing the benefits of a chart of accounts. Following is a transcript of the discussion. Most of the comments were correct, but two students were off base.

Assume the role of Professor Drebin, and identify and adjust the incorrect statements.

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Susie I am a sales manager, but I occasionally need to review our company's general journal. It frustrates me because the accounts are often listed only by a number. What's up with that? Professor What you are likely seeing are references to the chart of accounts. Chart of accounts are quite typical. Why would a company use a chart of accounts? Miguel Roberta I am an IT manager, and I can tell you that computer programming is much simpler when numeric values are used in lieu of text descriptions. This aids the construction of un- derlying computer programs that are able to match and sort. Miguel may be right, but I work in our cash department and I have to monitor receivables, payables, and cash. A key benefit for me is that I can determine the total of all receivables by doing a query of our 1002 accounts. If I want data by customer, I can refine the query to look for sub accounts like 1002.003, etc. And, the same thing is true for cash and payables. For example, our cash account is 1001, but we have unique sub accounts for each bank account (1001.001, 1001.002, etc.). So, I think one key benefit is to have a unique master account that can easily be broken down into many sub components.