Mnemonic Codes
Types Of Codes
(d) Mnemonic
Mnemonic 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 |
| A | Assets |
| L | Liabilities |
| O | Owner's Equity |
| R | Revenue |
| C | Cost Of Goods Sold |
| E | Expenses |
What does the first character of our code tell us ? Hopefully, you said the type of account.
A-Asset
L-Liability
O-Owner's Equity
R-Revenue
L-Liability
O-Owner's Equity
R-Revenue
C-Cost Of Goods Sold
E-Expenses
What's Next ?
Faceted Codes