Balance sheet accounts include the business's assets such as bank accounts and equipment, liabilities such as credit cards and bank loans, and equity, which represents the health of your business. Each balance sheet account has its own register, to track the transactions involving the accounts and their own balances. These accounts also appear on your balance sheet report, which is one of the main financial reports.
|Account||What for||When to add|
|Accounts Payable (A/P)||Tracks transactions related to money you owe to vendors.||Most companies require just one AP account and QuickBooks creates this for you the first time you enter a bill. Your accountant can advise you of the circumstances that would require you to create an additional Accounts Payable account.
You can use accounts payable reports and graphs to track the:
|Accounts Receivable (A/R)||Track transactions related to customers who owe you money.||Most companies require just one AR account, and QuickBooks creates this for you the first time you create an invoice. Your accountant can advise you of the circumstances that would require you to create an additional Accounts Receivable account.
You can use accounts receivable reports and graphs to track the:
|Bank||Track business checking, savings, money market, and petty cash accounts.||You can also add bank accounts to track your cash in drawer amount if you have a cash register..|
|Credit Card||Credit card purchases for the business.||You can add multiple business credit card accounts if:
Note: If you have multiple business credit cards for one charge account, create only one Credit Card account for the statement.
|Equity||The net worth of the company. It represents the difference between your liabilities and assets. If you sold all your assets today, and if you paid off your liabilities with the money received from the sale of your assets, the money you would have left is your equity. During your company setup process, QuickBooks creates two Equity accounts – Opening Bal Equity and Retained Earnings (actual accounts names are based on the business entity you select during the setup interview).||You can also create additional Equity accounts to track:
|Current Asset||Assets that you can easily turn into cash such as checking accounts, savings accounts, money market and CD accounts.||You can also add Current Asset account to track:
|Fixed Asset||Items with a minimum cost that you have to sell in order to generate cash. Examples are automobile, equipment and land. Consult your accountant or tax prepare to determine the actual minimum cost that you should use to determine fixed asset.||You can also add Fixed Asset accounts to track:
|Other Current Asset||Items that can be converted to cash or used up within one year such as prepaid expenses, employee cash advances, inventory, or loans from your business.||You can also use it to track supplies, deferred income taxes, estimated future income tax benefits, security deposits, and investment property.|
|Other Asset||Items that are neither Fixed Asset nor Other Current Assets such as goodwill, long term notes receivable and security deposits that have been paid by you.||You can also use Other Asset for tracking Intellectual property, confidential information, copyrights, designs, formulas, patents, and trademarks.|
|Long Term Liability||Money that your business owes and expects to pay back over more than one year such as Mortgages, Long-term loans, and notes payable.||You may also add the account to track Bonds payable, Lease payments, and Deferred income tax payments.|
|Current Liability||Money that your business owes and expects to pay within one year such as Sales tax, Security deposits, and payroll taxes.||You can also use it to track benefits, contracts, entitlements, and salaries and wages.
NOTE: If you have one or more loans for your business, you should create different Loan accounts for each one. For example, if you have loans to fund for equipment, inventory, or working capital, you should create different Loan accounts to track the principal you owe for each one. When you create the Loan account, QuickBooks sets the account type to Other Current Liability.