11/4/2020 Understand the chart of accounts in QuickBooks

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Understand the chart of accounts in QuickBooks

SOLVED • by QuickBooks • QuickBooks Online - International • 7 •
Updated 4 weeks ago

The chart of accounts is a list of all your company’s accounts and balances. QuickBooks uses this
list to organise your transactions on your reports and tax forms. Your chart of accounts also
organises your transactions so you know how much money you have and owe in each account.

Your chart of accounts organises and gives you a view of your:

Assets: This includes vehicles, equipment, buildings, and other assets used for business.
Liabilities: These are amounts you owe but haven't yet paid.
Income: This is the money that you get from your normal day to day business tasks such as
sales revenue or income for services rendered.
Expenses: This is the money that you spend on expenses related to normal business
operations such as advertising and promotion, office supplies, and rent.

QuickBooks automatically creates your chart of accounts based on the industry and type of
company you choose when creating your company file. If you just created your file, make sure to
record the accounts' opening balances.
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How to access your chart of accounts

In QuickBooks Online:
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Select Settings ⚙, then select Chart of accounts.

Types of accounts
There are two main account types in QuickBooks: Balance Sheet accounts and Income and
expense accounts.

▶  Balance Sheet accounts

▶  Income and expense accounts

Accounts that QuickBooks sets up for you

When you create a new company file, you’ll need to choose a type of company. This will
determine the chart of accounts company file QuickBooks will create for you.

▶  Standard accounts

▶  Industry-specific accounts

Common chart of accounts tasks

▼  Add or edit an account
Chart of accounts is the nuts and bolts of your accounting. It’s already set up and customised for
you. But if you need new accounts to keep track of your transactions, you can always add more.

Here’s how to create an account on your chart of accounts in QuickBooks Online.

▼  Add account numbers to your accounts

Although you are not required to use account numbers, your accountant may recommend that
you do so. QuickBooks inserts account numbers before account names in the chart of accounts.
The account number also appears in reports that list the account and on graphs.

Default account numbers are assigned to accounts based on account type and within ranges
based on generally accepted accounting principles (GAAP). You can change an account number
at any time.

Sample standard account numbers:

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10000 – 19999 Assets

20000 – 29999 Liabilities Help … QuickBo… Business …

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30000 – 39999 Equity

40000 - 49999 Income or Revenue

50000 - 59999 Job Costs/Cost of Goods Sold

60000 - 69999 Overhead Costs or Expenses

70000 - 79999 Other Income

80000 - 89999 Other Expense

Turn on account numbers in QuickBooks Online:

Here’s how to turn on account numbers in QuickBooks Online.

▼  Hide or delete accounts

Make an account inactive in QuickBooks Online 

Follow these steps to make an account on your chart of accounts inactive in QuickBooks Online.

▼  Activate or deactivate online accounts

Online Banking (also known as Bank Feeds) is one of QuickBooks' most helpful and time-saving
features. If you connect an account, QuickBooks automatically downloads and categorises your
bank and credit card transactions for you. Then all you have to do is approve the work.

Here's how to connect your account in QuickBooks Online.

▼  Display the balance of non-balance sheet accounts in chart of accounts

If you’d like to see the balances of non-balance accounts, you can choose to add the QuickBooks
balance and your bank balance to your chart of accounts.

In QuickBooks Online:

1. Select Settings ⚙, then select Chart of Accounts.

2. From the Action column, select Settings ⚙.
3. Select QuickBooks Balance and Bank Balance. Sign Up Sign In

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4. To close the drop-down, select Settings ⚙.

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