Computer Accounting With: Quickbooks 19E

COMPUTER
ACCOUNTING WITH
QUICKBOOKS
19E
LECTURE3
QUICKBOOKS CHART OF
ACCOUNTS
Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written
consent of McGraw Hill LLC.
CHAPTER 2 OVERVIEW
• Start QuickBooks and Open QuickBooks Company

• Customize Chart of Accounts (COA)
• Display Chart of Accounts (COA)
• Add New Accounts
• Edit Accounts
• Delete Accounts
• Create Chart of Accounts Report
• Accounting Essentials: Chart of Accounts
QUICKBOOKS NAVIGATION
• Taking a few minutes to learn QuickBooks navigation will
make learning QuickBooks easier.
• QuickBooks offers three different ways to navigate QuickBooks
software:
Home Page: Click the Home icon on the Navigation Bar (Icon
Bar) to reveal flowcharts of frequently used tasks.
Navigation Bar: Click on the Navigation Bar (Icon Bar) to
display customer, vendor, and employee centers and frequently
used windows, such as customer invoices.
Menu Bar: Click on the Menu Bar to reveal a drop-down
menu for each area.
QUICKBOOKS NAVIGATION
QUICKBOOKS HOME PAGE
To view the QuickBooks Home Page, click the Home icon in the Navigation
Bar. The Home Page contains the following main categories of
transactions and tasks:
Customers or sales transactions
Vendors or expenses transactions
Employees or payroll transactions
Banking and credit card transactions
Company tasks
QUICKBOOKS HOME PAGE
CUSTOMERS
The Customer's section is a flowchart of the main activities associated
with sales and customers.For example, we can:
Create estimates
Create invoices to bill customers
Record payments received from customers (cash, check,
and credit card payments)
An estimate is a quote you provide a
customer for products/services.
Once an estimate is saved in
QuickBooks, that estimate can be
turned into a sales order or invoice if
the customer decides to accept your
quote. Estimates are non-posting
and not included in income.
VENDORS
From the Vendors flowchart, we can record:
Purchase orders (orders placed to purchase items)
Inventory received
Bills received for inventory
Bills received for services
Bills paid
Sales tax paid
EMPLOYEES
From the Employees flowchart, we can:
Enter time worked
Pay employees
Pay payroll tax liabilities
Process payroll forms
BANKING
From the Banking section, we can:
Record deposits
Write checks
Reconcile a bank statement
View the check register
COMPANY
From the Company section, we can access:
Chart of Accounts. A list of accounts a company
uses to track accounting information.
Items & Services. A list of items and services

that a company buys and/or sells.
Inventory Activities. Perform inventory activities

including accessing the Inventory Center or adjusting
the quantity of inventory on hand .
Calendar. View your to do list and reminders in a

calendar form.
QUICKBOOKS NAVIGATION BAR
QuickBooks Navigation Bar (or Icon Bar) is

located on the left side of your screen.
The Navigation Bar permits you to quickly
access various QuickBooks screens. The
Navigation Bar can be displayed either at
the top beneath the Menu Bar or on the
left side of the QuickBooks window.
To display the Navigation Bar if it does not appear on your screen:
Select View on the Menu Bar
Select Left Icon Bar
The Navigation Bar, or Icon Bar, can be

customized to display the tasks that are
used most frequently. To customize the
Navigation Bar:
Select View on the Menu Bar
Select Customize Icon Bar
To customize the Navigation Bar(con’t)
Drag and drop to reorder the tasks in

the following order:
Home
Customers
Vendors
Employees
Reports
My Company
Calendar
Snapshots
Income Tracker
Bill Tracker
Select the OK button to close
Docsor distribution without the prior written
Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction
QuickBooks Menus
Lists
Click Lists on the Menu Bar to display the drop-down Lists Menu
From the drop-down Lists Menu, you can access various lists of information.
Chart of Accounts. A list of accounts used to record transactions.
Item List. A list of inventory items that you buy and sell or a list of services
provided to customers.
Payroll Item List. A list of items related to payroll checks and company payroll
expense such as salary, hourly wages, federal and state withholding,
unemployment taxes, Medicare, and Social Security.
Templates. A list of templates for business forms, such as invoices and purchase
orders.
Memorized Transaction List. A list of recurring transactions that are memorized
or saved. For example, if your company pays $900 in rent each month, then the
rent payment transaction can be memorized to eliminate the need to reenter it
each month.
RESTORE QBB STARTER FILE
• To restore Your Name LEC2 QBB Starter file from a QBB file
to a QBW file: From the No Company
• Open window, select Open or restore an existing company
• Click Next When the Open or Restore Company window
appears, select open company Click
• Next Identify the location Your Name LEC2 QBw file.
• In other words ,
The Files of type field should automatically display: QBW Backup Click
Open When the Open or Restore window appears, click Next Identify
the file name and location of the QBW company file.
OPEN QBW FILE
OPEN QBW FILE
OPEN QBW FILE
CHART OF ACCOUNTS
• Chart of Accounts (COA) is a list of all the
accounts and account numbers for a business
• Account numbers uniquely identify accounts. A
typical account numbering system for a
merchandising company:
Account Type Account No.
Asset accounts 10000 - 19999
Liability accounts 20000 - 29999
Equity accounts 30000 - 39999
Revenue (income) accounts 40000 - 49999

Cost of Goods Sold (Expense) accounts 50000 - 59999
Expense accounts 60000 - 69999
CUSTOMIZE CHART OF ACCOUNTS
Display Chart of Accounts (COA)
We can display the Chart of Accounts in different ways:
From the Company Menu
From the Navigation Bar
From the Company section of the Home Page
To view the Chart of Accounts for Your Name LEC2 file from the
Home Page, complete the following steps: Click the Chart of Accounts
icon in the Company section of the Home Page For each account, the
account name, type of account, and the balance of the account are listed.
The Account button at the bottom of the window displays a drop-down
menu for adding, editing, and deleting accounts.
Another option is to right-click in the Chart of Accounts window to

display a pop-up menu to add and edit accounts.
The Chart of Account displays account titles. In addition, sometimes
companies prefer to also display account numbers for accounts listed in
the Chart of Accounts.
DISPLAY ACCOUNT NUMBERS
Account numbers are used to uniquely identify accounts. Usually account
numbers are used as a coding system to also identify the account type. For
example, a typical numbering system for accounts might be as follows.
QuickBooks preferences will determine whether the account number is
displayed in the Chart of Accounts. If account numbers are not displayed in
Your Name LEC2 ’s Chart of Accounts,
select the QuickBooks preference to view account numbers as follows.
Select Edit Menu Select Preferences When the Preferences

window appears, select the Accounting icon on the left
scrollbar Select the Company Preferences tab Select
Use account numbers Uncheck Warn if transactions are 30
day(s) in the future Click OK to close the Preferences
window Your Chart of Accounts should now display account
numbers preceding the account titles
The Chart of Accounts should now list account numbers preceding the account
name.
To customize the QuickBooks Chart of Accounts:
• Add accounts
• Edit accounts
• Delete accounts
Add New Accounts
Paint Palette will be purchasing a new computer. To account for the

computer, you will need to add the following three accounts to the Chart
of Accounts:
Account Computer
Subaccount Computer Cost
Subaccount Accumulated Depreciation Computer
The Computer Cost subaccount contains the original cost of the computer.
The Accumulated Depreciation subaccount for the computer accumulates
all depreciation recorded for the computer over its useful life. The parent
account, Computer, will show the net book value of the computer
(cost minus accumulated depreciation).
Add New Accounts
To add new accounts to the Chart of Accounts for Paint Palette:
From the Chart of Accounts window, right-click to display the

pop-up menu. Then select New.
From the Add New Account: Choose Account Type window, select
Fixed Asset (major purchases) Click Continue When the Add
New Account window appears, select Account Type: Fixed Asset
Enter Account Number: 14100
Enter Account Name: Computer Enter Description: Computer

Select Tax Line:<Unassigned> Click Save & New to enter
another account
Add New Accounts
Add New Accounts
ADD NEW SUBACCOUNTS
When a blank Add New Account window appears, add a Computer Cost
subaccount as follows:
Select Account Type: Fixed Asset Enter Account Number: 14200
Enter Account Name: Computer Cost Check Subaccount of: 14100 –
Computer Enter Description: Computer Cost Select Tax Line:
<Unassigned> Click Save & New to
add another subaccount Add the Accumulated Depreciation Computer
subaccount by entering the following information in the Add New Account
window:
Account No. 14300
Account Type Fixed Asset
Account Name Accumulated Depr Computer
Subaccount of 14100 Computer
Account Description Accumulated Depreciation Computer
Tax Line Unassigned
Delete Accounts
Occasionally we may want to delete unused accounts from the Chart of Accounts.
We can only delete accounts that are not being used. For example, if an account has
been used to record a transaction and has a balance, it cannot be deleted. If an
account has subaccounts associated with it, that account cannot be deleted.
Rock Castle Construction would like to delete an account it does not plan to use, the
utilities account.
To delete an account:
From the Chart of Accounts window, select the account to delete. In this case,
click 68600: Utilities.
ALIGN COA WITH INCOME TAX RETURN
• QuickBooks is often used to track information for
tax return preparation.
• So QuickBooks COA should align with the income
tax return used by the business.
• The tax form used by a business is determined by
type of organization.
Form of Organization Tax Form
Sole Proprietorship Form 1040 Schedule C
Partnership Form 1065
C Corporation Form 1120
S Corporation Form 1120S
CHART OF ACCOUNTS
In general, there are five different types of
accounts on the Chart of Accounts:
1.Assets
2.Liabilities
3.Equity
4.Income (Revenue)
5.Expenses
CHART OF ACCOUNTS REPORT
• Chart of Accounts report is also called the
Account Listing
• To prepare Chart of Accounts report:
‣ From the Report Center, select Accountant &
Taxes
‣ Select Account Listing
1
2
4 5
ACCOUNTING ESSENTIALS
• Accounting Essentials summarize important foundational accounting knowledge
that may be useful when using QuickBooks.
Accounting Systems
What’s the language of business?
Accounting is the language of business. Learning accounting is similar to learning
a new language, such as Spanish or French. As you use this text, you will learn
terms and definitions that are unique to accounting.
What’s the objective of an accounting system?

The objective of an accounting system is to collect, summarize, and communicate
information to decision makers. Accounting information is used to:
Prepare tax returns for federal and state tax agencies.
Prepare financial statements for banks and investors.
Prepare reports for managers and owners to use when making decisions. Such
decisions include:
Are our customers paying their bills on time? Which of our products are the
most profitable? Will we have enough cash to pay our bills next month?
What are the main components to an accounting

system?
Most accounting systems consist of three components:
Input, such as entering transactions
Processing, such as the processing that QuickBooks does for you automatically,
sorting and posting appropriate accounts when you enter transactions
Output, such as the QuickBooks report you generate
What are the main advantages of a computerized

accounting system?
Before computerized accounting systems, the process component had to be
performed manually consuming numerous hours of work to sort, post, calculate
balances, and so on. With a computerized accounting system, most of the
processing is done automatically saving hours of manual work.

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COMPUTER

• Start QuickBooks and Open QuickBooks Company

Items & Services. A list of items and services

Inventory Activities. Perform inventory activities

Calendar. View your to do list and reminders in a

QuickBooks Navigation Bar (or Icon Bar) is

Select View on the Menu Bar

Select Left Icon Bar

The Navigation Bar, or Icon Bar, can be

Select Customize Icon Bar

Drag and drop to reorder the tasks in

Account Type Account No.

Asset accounts 10000 - 19999

Liability accounts 20000 - 29999

Equity accounts 30000 - 39999

Revenue (income) accounts 40000 - 49999

Expense accounts 60000 - 69999

Another option is to right-click in the Chart of Accounts window to

Select Edit Menu Select Preferences When the Preferences

Paint Palette will be purchasing a new computer. To account for the

Add New Accounts

To add new accounts to the Chart of Accounts for Paint Palette:

From the Chart of Accounts window, right-click to display the

Enter Account Name: Computer Enter Description: Computer

Form of Organization Tax Form

Sole Proprietorship Form 1040 Schedule C

Partnership Form 1065

C Corporation Form 1120

S Corporation Form 1120S

What’s the objective of an accounting system?

What are the main components to an accounting

What are the main advantages of a computerized

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