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Learn about the chart of accounts in QuickBooks Online

SOLVEDby QuickBooks4Updated 1 day ago

Learn what the chart of accounts is and why it’s important to set up correctly in QuickBooks Online.

The chart of accounts is a list of all the accounts that QuickBooks uses to track your financial information. You use these accounts to categorise 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.

Because the chart of accounts is foundational for good accounting, it’s important to understand it and set it up correctly.  

Get familiar with the chart of accounts

To open and view your chart of accounts, go to Settings Settings gear icon. and select Chart of accounts (Take me there).

The accounts are organised by columns including name, type, and detail type. Account types and detail types determine the data that shows on key financial reports like the Balance Sheet and Profit & Loss statements. Learn more about the importance of account types and detail types.

Many accounts have an account history where you can review the transaction history and current balance. For accounts that don’t have a history, you can run a report to see transactions on that account. To view the history or reports from your chart of accounts list, select either Account history or Run report from the Action column.

Learn about account types in the chart of accounts

The account type column categorises transactions into a few main account types, including:

  • Assets: a record of purchases for things like vehicles, equipment, buildings, and other assets used for business.
  • Liabilities: a record of money you owe but haven't yet paid like loans, mortgages, and lines of credit.
  • Income: transactions and payments related to your normal day-to-day business, such as sales revenue or income for services rendered.
  • Expenses: a record of money you spend on expenses related to normal business operations, such as advertising and promotion, office supplies, and rent.

Customise your chart of accounts

QuickBooks automatically sets up your chart of accounts for you, but you can tailor it to your business by adding additional accounts, or, if you have accounts you don’t use, you can make them inactive.

Although you aren’t required to use account numbers in your chart of accounts, your accountant may recommend them. If you decide to use them, you can edit the account numbers at any time. Here’s how to turn on account numbers in QuickBooks Online.

Learn about accounts that QuickBooks sets up for you

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.

Here are a few of the most common accounts QuickBooks creates for you:

AccountWhat it’s for
Trade and other payablesA record of the outstanding bills that your business owes. If your business uses multiple trade and other payable accounts, QuickBooks will let you choose the account you want to use when you enter and pay bills.
Trade and other receivablesA list of transactions related to customers who owe you money. If you need to use more than one trade and other receivable account, QuickBooks will let you choose the trade and other receivable account that you want to use when you create an invoice or receive a payment.
Opening Balance EquityEnsures that you get a correct balance sheet for your company, even before you've entered all your company's assets and liabilities.
Retained EarningsTracks profits from earlier periods that have not yet been distributed to owners. At the beginning of the financial year, QuickBooks automatically transfers net income into your retained earnings account.
GST ControlTracks all GST you collect and pay. You might not see this account if you haven’t turned on GST in QuickBooks.
Uncategorised ExpenseMoney your business spends that needs to be categorised.
Uncategorised IncomeMoney your business earned that needs to be categorised.
Undeposited FundsHolds cash or cheques that your business is ready to deposit at the bank. 
Inventory AssetTracks the current value of your inventory. You might not see this if you haven’t turned on inventory tracking.
Reconciliation DiscrepancyTracks reconciliation adjustments. This account is automatically created if you have a discrepancy in a reconciliation.

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