Which of the following pieces of information is essential when creating a new general ledger account for landscaping expenses?

• A. The total cash balance of the company
• B. The names of all company employees
• C. The company's tax identification number
• D. The account name and a unique account number

Answer: (D)

Verified step by step guidance

1. Understand the purpose of a general ledger account: A general ledger account is used to record and categorize financial transactions for a specific type of expense, revenue, asset, liability, or equity.
2. Identify the essential components of a general ledger account: Each account must have a unique account name and account number to ensure proper tracking and organization of financial data.
3. Recognize why the account name is important: The account name clearly identifies the type of transaction being recorded, such as 'Landscaping Expenses,' making it easier to understand the nature of the expense.
4. Understand the role of a unique account number: A unique account number helps differentiate this account from others in the ledger, ensuring accurate posting and retrieval of transactions.
5. Exclude irrelevant information: The total cash balance, employee names, and tax identification number are not directly relevant to creating a new general ledger account for landscaping expenses.