Why are ledger accounts numbered?

Question

Why are ledger accounts numbered?

Answer 1

maybe for referencing purposes

Answer 2

The numbers group like accounts together.  For example, all the accounts from 1000 to 1999 will be assets, 2000 to 2999 will be liabilities, 3000 to 3599 will be equity, 3600 to 3999 will be revenue accounts, 4000 to 4999 will be cost of goods sold and sales expenses, 5000 and up will be all other expenses, divided into groups and numbered consecutively so that related accounts appear together on lists and on reports.

Numbering accounts also makes manipulation of data easier when you are extracting information for reports.  

I've worked at companies that took all their asset accounts, put them in an alphabetized list, and that's it.  Likewise, all the expenses were alphabetized.  Finding the account you needed was difficult.  One example:  am I looking for Lodging, Hotels/Motels, or Travel?  I have to check an alphabetized list for every possible variation of an account name.  If the accounts were numbered, you might see something like this:

4000 - SALES EXPENSES

4500 - SALES TRAVEL

4510 - Gas and Mileage

4515 - Parking and Tolls

4520 - Airfare

4525 - Bus or Train Fares

4580 - Lodging

5500  -  TRAVEL (Non-Sales)

5510 - Gas and Mileage

5515 - Parking and Tolls

5520 - Airfare

5525 - Bus or Train Fares

5580 - Lodging

I guess numbering provides a better structure than simply using the words.  You have to really think through your business and its processes and its needs before you can determine what accounts you do need and how they should be grouped so that your budget and your financial reports all have the same format so you can follow data and trends.

That help?