In what order are accounts listed in the chart of accounts?

• A. Revenues, Expenses, Assets, Liabilities, Owner's Equity
• B. Assets, Liabilities, Owner's Equity, Revenues, Expenses
• C. Liabilities, Assets, Revenues, Expenses, Owner's Equity
• D. Owner's Equity, Assets, Liabilities, Revenues, Expenses

Answer: (B)

The chart of accounts is organized by the type of account to align with financial statements. The standard order starts with assets (resources the business controls), then liabilities (obligations to creditors), followed by owner’s equity (the owner’s claim on the assets). After those balance-sheet accounts come revenue accounts and expense accounts, which appear on the income statement. Revenues increase equity through net income, while expenses reduce net income, and the net income for the period flows into owner’s equity. This sequence—assets, liabilities, owner’s equity, revenues, expenses—explains why that option is correct. Other orders mix income statement accounts with balance-sheet accounts, which doesn’t reflect how financial statements are organized.