This activity will allow you have an in-depth application of the coding schemes

and techniques. It is important that you understand this part since the work of an

accountant starts in understanding the chart of accounts (i.e. an application of coding

technique). This activity also lets you analyze the audit trail of a given transaction.

1. Jose is are an owner of a retail shop that sells cellphone accessories (phone cases,

stickers, protective glass and screen, etc.). As his business grows, he finds it hard to

trace the items/inventory. He is thinking of assigning codes to the products to organize

them. Suggest a coding technique that could help him and explain why he should use

such. (Note: There is no right or wrong answer on this one. Kindly explain your answer

and provide an example if possible)

2. Chart of accounts must be customized according to the entity type. As an activity, obtain

a copy of chart of accounts of the following organizations:

a. School/university

b. Bank

c. Government unit

d. Manufacturing Company

Observe the accounts and how they are presented for each entity type. Explain how the

chart of accounts differ from each other

3. State the source documents used for the transactions from start to finish. In detail,

describe the audit trail of the following transactions:

a. Inventory Purchases

b. Sales of Inventory

c. Employee Payroll

Activity 1. Data Processing Cycle is indeed very important to accountants. Indicate below 3 key

takeaways for this lesson. Relate each point to the role of an accountant.