When labeling accounts, the 300s are used for which type of accounts?

• A. Asset accounts
• B. Liability accounts
• C. OE accounts
• D. Revenue accounts

Answer: (C)

Numbers in a chart of accounts are grouped by type, with the hundreds digit signaling the broad category. In this scheme, the 300s are designated for Owner's Equity accounts—the owner's claim on the business after debts are paid. This includes accounts like Owner’s Capital and Owner’s Drawings, which track how the owner's stake changes with contributions, withdrawals, and retained earnings. Since equity appears on the balance sheet alongside assets and liabilities, using the 300s for OE keeps the financial statements organized and easy to read. Other account types fit different ranges (assets and liabilities in other hundreds, revenues and expenses in their own ranges), so the 300s specifically point to Owner's Equity.