As you know that QuickBooks chart of accounts is the main base of the QuickBooks accounting system and transactions. Here the all financial statements, like profit and loss statements, income statements can be generated. The list of account numbers and names that is relative to your company is called a chart of accounts. QuickBooks automatically creates your chart of accounts based on your business industry and the type of company. If you just created your file, make sure that you record the account opening balances.
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QuickBooks Chart of accounts standard are-
- Asset accounts
- Liability accounts
- Income accounts
- Expense accounts
Each category item will have the specific accounts, that have represented an account with each category. It may also display equity accounts on its company’s chart. An equity account represents anything that remains after accounting for all operating expenses.
- Asset Account – An asset account is a general ledger account that is used to sort and store the debits and credits amounts of your company transactions. Asset Account includes things that are in liquid form, asset accounts could be things like- accounts receivable and notes receivable. Asset account will include anything that things which you are own values like- Building lend equipment, vehicles, and inventory.
- Liability Accounts – A liability account is a general record account in which an organization records its obligation, commitments, and client prepayments, certain conceded annual duties, and so on .. that is the result of a past exchange. Regular obligation accounts under the gathering technique for bookkeeping incorporate Accounts Payable, Accrued Liabilities, Notes Payable, Unearned Revenues, Deferred Income Taxes (certain brief planning contrasts).
- Income Account – Income accounting is a change in net assets under the reporting period, excluding any receipts from the payment to owners. It is calculated as revenues minus all expenses. Profitability has been compiled using the basis of accounting. It is an excess of revenue expenses for an accounting period is also known as earnings or gross profit.
- Expense account – Expense accounts are equity accounts with the debit balance. this account considered contra equity accounts because if their balance will decrease the overall equity balance. It can be arranged under which money is debit in the course of business is later refund by anyone employees.
Let’s know the setup process of the QuickBooks chart of accounts, before that it will be good to know the accessing method of chart of accounts in QuickBooks.
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How to access chart of accounts in QuickBooks?
We have two procedures to access charts of accounts in QuickBooks, one is on QuickBooks Online and another is QuickBooks Desktop. First, we will know the access method of chart accounts in QuickBooks Online.
- Login to QuickBooks Online and go to the ‘Settings’ tab.
- Then from the ‘Settings’ tab select the ‘Chart of accounts’ option.
Now proceed to the second method for the QuickBooks Desktop
- At first, log in to the QuickBooks Desktop, then go to any tab (Company, Lists or Accountant) to select the ‘Chart of Accounts’.
- Now you can access to the chart of accounts
Steps to Set Up the QuickBooks Chart of Accounts list
- Firstly you have to Choose List and go to the Charts of Accounts command. And then QuickBooks displays the chart of the accounts window.
- Click on the Account button at the bottom of the window. Where you see the option of creating a new account.
- Join a new account.
- Identify the type of account you are adding.
- Click to Continue. Use the Account Name box to give your new account a unique name.
- If the account you are adding is a subset of the original account, identify the original account by selecting the subdivision of the checkbox.
- Provide a description of your new account.
- Provide other account information.
- Identify the tax line on which account information is to be entered by selecting the tax form and tax line from the tax-line mapping drop-down list.
- After describing the new account you have set up, click either Save and Close. the new account is adding on the chart list.
How to Delete an account from QuickBooks Chart of Accounts?
To delete an account, you need to follow these steps-
- Firstly, You have to click on the Gear icon at the top.
- In your company section, Choose Chart of Accounts.
- Find that account, you want to delete.
- You have a drop-down menu, scroll it and click to delete.
- Click YES when the pop-up window saying “You want to delete?”.
Once you delete an account, it will permanently be removed from the chart of accounts.
How to Modify the Account from the Chart of Accounts in QuickBooks-
- Firstly, Click the Gear icon to the left of your company name, where the chart of accounts is listed below in your company column.
- Scroll down to the account and click drop arrow>Run report. then click to edit.
- Now here, you see the window where you can modify your account name and description and many more.
- After modifying click to save.
How to make an account inactive in chart of account?
- First of all, access to your chart of accounts.
- After that, select the account that you want to hide or inactive.
- Then go to the ‘Account’ tab and select the ‘Make Account Inactive’ from the drop-down list.
How to see the active accounts
- To see the active accounts, access to your accounts, and select the ‘Included inactive’ box or check-mark on it.
- Then search for the account that you want to see or want to make active again.
- Now click on the ‘Account’ tab and select the ‘Make Account Active’ option from the list.
- Either you can choose the X icon to make any account active before the name column.
How to display the balance of non-balance accounts in the chart of accounts
We have two solutions for this question, one is for QuickBooks Desktop users and another is for QuickBooks Online users.
For QuickBooks Desktop:
- Go for your chart of accounts, and select the ‘Accounts’ tab.
- Then select the ‘Customize Columns’ option from the ‘Accounts’ drop-down tab.
- From the ‘Available Columns’, click on the ‘Balance’ option and then on the ‘Add’ option
- And lastly, click on the ‘OK’ option.
For QuickBooks Online:
- Go to the ‘Setting’ tab of QuickBooks Online after logged in.
- Then click on the ‘Chart of Accounts’ option.
- After that, you have to go to the ‘Action’ column to select the ‘Setting’ option.
- Now go for the ‘QuickBooks Balance’ and then on the ‘Bank Balance’ option.
- To return to the normal stage, or to close the drop-down, click on the ‘Settings’ option.
Procedure to connect an account to bank feeds in chart of account:
- First of all, go to the ‘Banking’ menu and choose the ‘Bank Feeds’ option from the menu.
- In the next step click on the ‘Set up Bank Feeds to an account’ option.
- Now select the name of the bank from the ‘Bank’s name field’.
- Connect the bank account by using the direct connect;
- Search for online free service from your bank by enrolling.
- To enroll, click on the link of enrollment site, and contact them for login credentials if it requires confirmation for the app.
- After the complete enrolled, click on the ‘Continue’ option, and enter the online banking ID and password.
- Now the QuickBooks will connect to the bank’s server after clicking on the ‘Connect’ option.
- In the next step choose the bank account that you want to connect with the QuickBooks.
- At the last, after the complete process click on the ‘Finish’ option.
- If you want to connect the bank account by using the web connect;
- If your bank has the facility of web connect, then you can follow the onscreen instructions to connect your account.
- Your bank account will be connected to the bank feed whenever you download transactions from your bank and import all the transactions to QuickBooks for the first time.
- After that go for the ‘Select existing or Create new’ drop-down menu from the link your accounts page.
- And find the QuickBooks account that you need to link to your bank account.
- If in case, you didn’t set up an account yet in the chart of accounts, then click on the ‘Create New Account’ option.
- And at the end of the procedure click on the ‘Connect’ option and then on the ‘Close’.