Having an accurate chart of accounts is important because it feeds the data in your reports. If the information here is inaccurate, then our charts will be wrong.
Accessing the Chart of Accounts
There are a couple different ways to get to the chart of accounts. The first way is to click the gear icon in the Header at the top-right of the screen. From there, you can access the chart of accounts under the Your Company heading.
[Figures: Accessing the chart of accounts through the gear icon ]
Another way to access the chart of accounts is from the Navigation Pane on the left side of the screen. Click the Accounting menu item and you will then see a link to the chart of accounts.
[Figure: Accessing the Chart of Accounts]
Once you are at the chart of accounts, you will see a table with all the relevant information about your company. QuickBooks Online creates the chart of accounts automatically based on the industry and type of company that you specified when making your company file. For a new file, you will need to enter your accounts' opening balances.
At the top of the chart of accounts, you can select to view the chart or reconcile your books with your bank records. Having your accounts reconciled is important because it lets you accurately monitor your finances. Clicking the Reconcile tab will guide you through the process of reconciling your accounts.
[Figure: Selecting a bank account to start reconciling accounts]
Back in the chart of accounts tab, you will see under the title that there is a breadcrumb navigation link that goes to All Lists. Clicking that will take you to a page of lists, which shows that the chart of accounts can be considered a list in QuickBooks terms.
[Figure: The Chart of Accounts main page]
On the right side above the chart are buttons to run reports and create new accounts. We'll look at running reports in another lesson and making new accounts a little later in this lesson.
There is also a search bar directly above the chart where you can search for accounts by name. This is a much faster way to find the account that you are looking for rather than browsing through the list. For example, if you are looking for anything related to travel expenses, just type 'travel' into the search bar and any related accounts will appear instantly.
Interested in learning more? Why not take an online QuickBooks Online course?
[Figure: Using the search bar to find accounts]
Three more icons to the right or the search bar allow you to do batch editing, print the chart, and change settings. The pencil icon for batch editing makes every name field in the chart editable. The printer icon allows for printing or exporting into another format like PDF. The gear icon for settings allows you to choose which columns to show, including if inactive items should be shown, and also specify how many rows to show in each result.
The chart has six columns. The columns are name, type, detail type, QuickBooks balance, bank balance, and action. The chart can be sorted in ascending or descending order by name, type, or balances.
The first column shows the name of each account. The name can be changed to whatever you want.
The second column shows the main type of account it is. There are two main types of accounts in QuickBooks Online: Balance Sheet accounts and Income and expense accounts.
Balance Sheet accounts
Balance sheet accounts will appear on your Balance Sheet report. This includes the assets, liabilities, and equity of your business. The Balance Sheet account types are:
The third column shows a more detailed description of the type. The detailed type options change based on the type. Detailed types help you select and name accounts appropriately so that you know exactly where your money is coming from and going to when you run reports. You will be able to specify the detailed type when adding the account or editing it.
The next two columns are for the QuickBooks balance and bank balance. The QuickBooks balance will represent any transactions entered into QuickBooks, while the bank balance will show the balance from the bank if it is downloading bank data.
The last column is the Action column. Here you will have the option of viewing the register or running a report. The register will let you see every transaction that you've had on that account. Clicking the triangle will give you more options, such as editing the account or making it inactive.
Accounts can also be numbered, which they aren't be default. In order to add account numbers, go back to the gear icon at the top-right. From there, click Account and Settings and go down to Advanced. In the Advanced tab, find the setting for Chart of Accounts.
Click the pencil icon to allow for editing the settings. The first toggle item there will enable account numbers. Turn that on. Also, to have the account numbers show up in the chart of accounts, then additionally tick the Show Account Numbers checkbox.
[Figure: Enabling account numbers in the chart of accounts]
Now when you go back to the chart of accounts, you can see a new column added for account numbers. You can edit the account numbers by clicking the pen icon about the table on the right side. That will allow you to edit any fields in the table.
[Figure: Column for account numbers in the chart of accounts ]
If you want to edit only one account, then you can click on the triangle in the Action column and then click Edit in the dropdown menu. That will pop open a modal window that allows you to edit only that one account.
[Figure: The window for editing an account ]
Adding an Account
We'll now take a look at how to add an account in QuickBooks. Start by clicking the New button at the top right. That will pop open a modal window where you can add a new account.
[Figure: The window for adding an account ]
The first thing you need to do is choose the Account Type. Next, you will select the appropriate Detail Type. Using the information in the Detail Type, come up with a descriptive name for the account. You can then enter a description.
You then need to specify whether the account is a sub-account of another parent account. Sub-accounts are just there to help keep your accounts organized. For instance, you can make accounts for phone and water a sub-account of a utilities account. That will make subsequent reports easier to read. If you choose to make this a sub-account, then select the parent account from the dropdown menu.
Lastly, choose when you want to start tracking the finances for the account. If it is a brand-new account, then you can select Today and enter its starting balance. If it's an older account, then select Other and choose the date where you want to start tracking from.
To finish adding the account, click the Save and Close button. If your new account is a bank account, then you can connect it to online banking. This can be accomplished by clicking the Connect Bank link in the Action column's dropdown menu.
Make an Account Inactive or Active
You can make an account inactive so that your books are neat and orderly. This won't delete the account information and transactions, so you can keep a record of it.
If the account is connected to a bank, then you should first disconnect it. Once it is disconnected, you can proceed to making it inactive. In the Action dropdown menu, select Make Inactive. Your account will now be hidden from the list.
If there is a balance on that account, then QuickBooks Online will create a journal entry and move the balance to another account. Also, your transactions with the account won't disappear.
You can change the settings in the chart of accounts to see your inactive accounts. To see your inactive accounts again, click on the gear icon above the table. Select the option to Include Inactive in the Other category.
[Figure: Viewing inactive accounts in the chart of accounts ]
You can also make an account active again, however the journal entry created when making the account inactive stay in place. To make the account active, just click Make Active in the Action column.
In this article, you learned all about the chart of accounts. You saw that there are several ways to access the chart of accounts. You learned how to reconcile accounts with a bank and also how to quickly find the accounts you are looking for by using the search bar.
You also learned about all the different types of accounts that are available and how they are put into different categories, such as income, expense, and balance sheet account. and how to add them, edit them, deactivate them, and the activate them again.
The chart of accounts is a list of all the accounts that QuickBooks uses to track your financial information. You use these accounts to categorize your transactions on everything from sales forms to reports to tax forms. Each account has a transaction history and breaks down how much money you have or owe.What should be in chart of accounts QuickBooks? ›
The chart of accounts lists all your company's accounts and their balances. QuickBooks uses this list to track funds, debts, money coming in, and money going out. Each account has a transaction history that you can view in the register. You can also run a quick report for details.What should be in my chart of accounts? ›
A chart of accounts is a list of all your company's “accounts,” together in one place. It provides you with a birds eye view of every area of your business that spends or makes money. The main account types include Revenue, Expenses, Assets, Liabilities, and Equity.What are the 5 main account types in the chart of accounts in QuickBooks Online? ›
- Sales income.
- Rental income.
- Dividend income.
- Contra income.
A chart of accounts (COA) is an index of all the financial accounts in the general ledger of a company. In short, it is an organizational tool that provides a digestible breakdown of all the financial transactions that a company conducted during a specific accounting period, broken down into subcategories.What is the most important list in QuickBooks? ›
The Chart of Accounts is your most important list because every transaction recorded in QuickBooks affects an account from your chart of accounts. The Chart of Accounts are the foundation of your financial reporting. It is used to create important reports like the Profit & Loss and Balance Sheet report.How many chart of accounts can you have in QuickBooks Online? ›
QuickBooks Online Plus
Classes and locations (combined): 40 combined classes and locations. Chart of accounts: Maximum of 250 accounts. Tag groups: Maximum of 40 groups.
- At the top menu, select Lists.
- Select Chart of Accounts.
- Highlight the account you want to move.
- Using the left mouse button, press and hold the account and drag it to the desired place.
In accounting, a standard chart of accounts is a numbered list of the accounts that comprise a company's general ledger. Furthermore, the company chart of accounts is basically a filing system for categorizing all of a company's accounts as well as classifying all transactions according to the accounts they affect.What are the 7 basic accounting categories? ›
- Revenue. For a business, the total amount of money the company receives for selling services and products is its revenue. ...
- Expenses. Expenses are the costs a business incurs to generate revenue. ...
- Assets. ...
- Liabilities. ...
- Capital. ...
- Accounts. ...
- Financial statements.
QuickBooks Online creates a default chart of accounts list based on the industry you selected when you set up your QuickBooks company. We recommend reviewing this default chart of accounts to determine what accounts need to be added, edited, or deleted.What are the 6 basic types of accounts? ›
- Asset accounts are used to recognize assets. ...
- Liability accounts are used to recognize liabilities. ...
- Equity accounts are used to recognize ownership equity. ...
- Revenue accounts are used to recognize revenue. ...
- Expense accounts are used to recognize expenses. ...
- Gain accounts are used to recognize gains.
- Go to the Transactions menu.
- Find a transaction on the list.
- Select Business if the transaction was for business, or select Personal for personal. ...
- Review the category in the Category column. ...
- If you need to change the category, select the category link. ...
- When you're done, select Save.
3 Different types of accounts in accounting are Real, Personal and Nominal Account. Real account is then classified in two subcategories – Intangible real account, Tangible real account. Also, three different sub-types of Personal account are Natural, Representative and Artificial.What comes first in a chart of accounts? ›
Typically, balance sheet accounts, including current assets and current liabilities, are listed first. This is followed by the income statement, which includes revenue and expense accounts. This can be further divided into operating expenses, operating revenues, nonoperating expenses and nonoperating revenues.What is the easiest way to learn QuickBooks? ›
- Video tutorials. Watch step-by-step videos to learn your way around QuickBooks. Explore videos.
- Webinars. Start with the basics. Try a 1-hour webinar with an expert to get familiar with QuickBooks. ...
- Tutorials & Videos. Learn more about QuickBooks by watching our instructional videos. Find a training class.
- Open Multiple Browser Windows.
- Connect Bank & Credit Card Accounts.
- Memorize Keyboard Shortcuts.
- Set Up Items for Every Product/Service.
- Use the Undeposited Funds Account.
- Reconcile Your Bank Account.
- Use Class & Location Tracking.
- Use Attachments.
The 5 Basic Functions of QuickBooks
- Vendors. The first function you see in the top left corner is Vendors. ...
- Customers. ...
- Employees. ...
- Company. ...
Max 10MB worth of data.How many charts of accounts can be used for a company? ›
If the individual company codes need different charts of accounts, you can assign up to two charts of accounts in addition to the operating chart of accounts.
QuickBooks uses some accounts as the default for certain features. These, like accounts connected to online banking, can't be merged or deleted. If you're merging accounts that have reconciliation reports, save those reports first.How the chart of accounts are arranged? ›
The chart is usually sorted in order by account number, to ease the task of locating specific accounts. The accounts are usually numeric, but can also be alphabetic or alphanumeric.What is the difference between chart of accounts and item list in QuickBooks? ›
Chart of Accounts—For organizing your daily transactions. Items List—For tracking the profitability of individual services and products sold. Class List—For tracking different corporate profit centers (divisions).How should chart of accounts be numbered? ›
Usually, you will see the first number (or two) representing the general ledger division and being a major classification. Accordingly, numbers starting from 1 are assigned to Asset accounts, numbers starting from 2 are assigned to Liability accounts, numbers starting from 3 represent Stockholder's Equity accounts.What kind of charts do accountants use most often? ›
The graphs most commonly utilized by accountants include horizontal bar graphs, vertical column graphs, pie charts, and line graphs. Bar and column graphs generally are more easily understood than pie charts.What are the 3 golden rule of accounting? ›
Take a look at the three main rules of accounting: Debit the receiver and credit the giver. Debit what comes in and credit what goes out. Debit expenses and losses, credit income and gains.What are the 6 golden rules of accounting? ›
- Debit what comes in, Credit what goes out.
- Debit the receiver, Credit the giver.
- Debit all expenses Credit all income.
The Golden rule for Real and Personal Accounts: a) Debit what comes in. b) Credit the giver. c) Credit what goes Out.Which accounts can't be deleted from the chart of accounts in QuickBooks? ›
Accounts that can't be deactivated
Opening Balance Equity: This is the default account for adjustments. You can only edit the name of this account, if necessary. Retained Earnings: This account reports the net income of your company on the Balance Sheet report.
- Log in to your QuickBooks Online account.
- Change the URL to include /purgecompany.
- The next screen will provide a summary of the items to be deleted.
- Type the word “YES” once the data gets deleted, then click OK.
Choose Setup > Chart of Accounts. Choose Edit > Zero Balances.What is difference between chart of accounts and main accounts? ›
The chart of accounts is used in ledger setup, which is part of the setup for the general ledger. A main account is an account in the general ledger.Is chart of accounts same as GL accounts? ›
A chart of accounts and a general ledger are two important components of any accounting system. The chart of accounts is a list of all the accounts that exist in an organization, while the general ledger is a record of all transactions involving those accounts.Does QuickBooks have a standard chart of accounts? ›
QuickBooks Online automatically sets up a few of the same standard accounts in the chart of accounts and then gives you additional accounts automatically based on your business entity. There are also accounts that are only created when you take certain actions in QuickBooks.Is there an order for chart of accounts? ›
In a chart of accounts, accounts are shown in the order that they appear on your financial statements. Consequently, assets, liabilities, and shareholders' equity (balance sheet accounts) are shown first, followed by revenue and expenses (income statement accounts).Which type of account is listed first in the chart of accounts? ›
The chart of accounts provides the name of each account listed, a brief description, and identification codes that are specific to each account. The balance sheet accounts are listed first, followed by the accounts in the income statement.What are the three items included in the chart of accounts? ›
Having an accurate chart of accounts makes it easier for you or an accounting professional to develop in-depth financial reports to help you understand your company's financial position, including a cash flow statement, balance sheet, and income statement.What does a chart of accounts not include? ›
The chart of accounts is a listing of the names and account numbers for the general ledger accounts available for recording amounts. However, the chart of accounts will not include any transaction amounts or account balances.What accounts are DR and CR? ›
DEBIT AND CREDIT CONVENTION
This means that entries of equal and opposite amounts are made to the Finance System for each transaction. As a matter of accounting convention, these equal and opposite entries are referred to as a debit (Dr) entry and a credit (Cr) entry.
So when you download or import transactions and accept them, QuickBooks marks them as "C." This means they're ready to be reconciled. When you next reconcile your bank account, the transactions are already selected, speeding up the bank reconciliation process.
Obviously, since managerial accounting is important to management, the COAs are also designed to be expandable. However, as every company is different, it is not possible for a standardized COA to meet every managements' needs. Instead, it requires a bespoke COA, tailored specifically to fit each specific company.