In the usual chart of accounts numbering, which account is numbered 1?

• A. Accounts Receivable
• B. Cash
• C. Prepaid Rent
• D. Alecia Morris, Capital

Answer: (B)

The first number is assigned to the asset that is most liquid, which is Cash. In a typical chart of accounts, assets start the numbering, and Cash is listed at the top of that section, so it gets the first code. Accounts Receivable and Prepaid Rent are other asset accounts but appear after Cash, while Alecia Morris, Capital is an owner's equity account and sits in a later range. So Cash is the account numbered 1.