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mediumMCQCUET Accountancy 2025 29 May Shift 22026Accountancy
1 mark

What is the role of codification in the grouping of accounts within a CAS?

  1. A
    To minimize tax liabilities
  2. B
    To eliminate the need for data entry
  3. C
    To maintain hierarchical relationships between groups and subgroups
  4. D
    To simplify financial statements only

Solution & Step-by-step Explanation

In a Computerised Accounting System (CAS), codification structures the chart of accounts systematically. It establishes clear hierarchical logic pipelines ensuring main groups (e.g., Current Assets) comfortably contain matching subgroups (e.g., Cash, Bank, Debtors) via nested numeric or alphanumeric arrays.

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What is the role of codification in the grouping of accounts within a CAS?
A
To minimize tax liabilities
B
To eliminate the need for data entry
C
To maintain hierarchical relationships between groups and subgroups
D
To simplify financial statements only

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