How to Setup QuickBooks Chart of Accounts

(Last Updated On: February 15, 2020)

As you know that QuickBooks chart of accounts is the main base of QuickBooks accounting system and transactions. here the all financial statements, like profit and loss statements, income statement 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.

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 their company’s chart. 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.

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 in 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.

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