Types Of Codes
(d) MnemonicMnemonic means something that aids the memory. Mnemonic coding systems use letters and/or numbers as an aid for identifying and remembering something. If you recall, I mentioned earlier that most codes are meaningless by themselves. This is an exception. This is a code that conveys meaning by itself. Abbreviations that we commonly use is an excellent example of using mnemonic codes.
A possible use of Mnemonic Codes used with a chart of accounts would be using codes similar to the following for identifying and assigning the type of accounts.
|Mnemonic Code||Identifies Type Of Account|
|C||Cost Of Goods Sold|
What does the first character of our code tell us ? Hopefully, you said the type of account.
C-Cost Of Goods SoldE-Expenses
What's Next ?