Which of the following statements best defines the chart of accounts?

• A. A detailed record of all cash inflows and outflows during an accounting period.
• B. A report showing the financial position of a company at a specific point in time.
• C. A listing of all account titles and numbers used by a company to organize its financial transactions.
• D. A summary of a company's revenues and expenses over a specific period.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of a chart of accounts. A chart of accounts is a structured list that includes all account titles and numbers used by a company to record and organize its financial transactions systematically.
2. Step 2: Compare the provided options to the definition of a chart of accounts. Eliminate options that do not align with the concept. For example, a detailed record of cash inflows and outflows refers to a cash flow statement, not a chart of accounts.
3. Step 3: Evaluate the option describing a report showing the financial position of a company at a specific point in time. This refers to a balance sheet, not a chart of accounts.
4. Step 4: Consider the option describing a summary of revenues and expenses over a specific period. This refers to an income statement, not a chart of accounts.
5. Step 5: Identify the correct option, which is 'A listing of all account titles and numbers used by a company to organize its financial transactions,' as it matches the definition of a chart of accounts.