As the bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date. At the end of each year, you analyze the accounts to verify that each account should be active for accumulation of costs, revenues, and expenses. In July, the accounts payable clerk has asked you to open an account namedNew Expenses. You know that an account name should be specific and well defined. You feel that the A/P clerk might want to charge some expenses to that account that would not be appropriate. Why do you think the A/P clerk needs thisNew Expenses account? Who needs to know this information and what action should you consider?

As the bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date. At the end of each year, you analyze the accounts to verify that each account should be active for accumulation of costs, revenues, and expenses. In July, the accounts payable clerk has asked you to open an account namedNew Expenses. You know that an account name should be specific and well defined. You feel that the A/P clerk might want to charge some expenses to that account that would not be appropriate. Why do you think the A/P clerk needs thisNew Expenses account? Who needs to know this information and what action should you consider?