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Manage default and special accounts in your QuickBooks Online chart of accounts

SOLVEDby QuickBooks3Updated 1 day ago

Find out which default or special accounts can be deleted, edited, or merged in QuickBooks Online.

When you create your company in QuickBooks Online, specific default accounts in your chart of accounts are created for you depending on the business entity you selected. Other special accounts are created when certain actions are taken or features are turned on in your QuickBooks settings.

In the chart of accounts, it’s important to understand that some of these default accounts can’t be changed. We’ll show you which default accounts are created for each business entity, and which accounts you can edit, merge, or make inactive.

Note: If you need to remove an account from your chart of accounts, learn how to deactivate accounts you no longer use.

Accounts that can’t be deactivated

The following default accounts are created when you set up QuickBooks, or when an event triggers them, like turning on the GST setting. You can’t make these accounts inactive or use them for any other purpose.

  • Undeposited Funds (also called Payments to Deposit): When you record a payment to your company, the funds are added to this account until you deposit them into your bank account.
  • 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 revenue of your company on the Balance Sheet report. You can edit the name of the Retained Earnings account but because it’s a common accounting term and used in the Balance Sheet, it’s not recommended.
  • Inventory/Stock Asset and Cost of Goods Sold/Cost of Sales: If you try to edit or deactivate these accounts, any edits to your Products/Services will recreate them.
  • Sales of Product Revenue: This is used to track sales for inventory items. This account is the default account created to track sales for inventory items, and should not be deleted, or renamed. If deleted or renamed, QuickBooks Online will create a new account to take its place.
  • Reconcile/Reconciliation Discrepancies: This account is created if you reconcile an account and the transactions in QuickBooks Online don't match the transactions reported on your bank statement.
  • Unapplied Cash Payment Income: This account is created if you record a cash payment from a customer without applying it to a sales form, such as an invoice.
  • (Sales tax agency name) Paid: This account is created if you set up GST for a tax agency. Then it reports the GST for every transaction.

Accounts that can be edited, but not deactivated or merged

  • Uncategorised Expense and Uncategorised Income: These accounts are created automatically and track money your business earned or spends that still needs to be categorised.
  • Uncategorised Asset: This account records any asset that can’t be matched to an account.
  • Owner's Equity (also called Owner Draws, Owner’s Investment, or Owner’s Pay & Personal Expense): This account represents the cash or assets you’ve invested in the company.
  • Services: This is the default revenue account in QuickBooks Online. It functions the same as any other revenue account, but neither it nor the corresponding Product/Service item can be deleted. However, you can edit the names of both to reflect your main revenue type.

    To edit the name of the Services account:

    1. Go to Settings ⚙ and select Chart of accounts.
    2. Find the Services account in the list.
    3. In the Action column, select the dropdown ▼ menu. Then select Edit.
    4. Update the Name (or Category name) field to reflect your main revenue.
    5. Select Save and Close.

Accounts that can be deleted by merging

If you have the following accounts, you can only delete them by merging them with the Services revenue account:

  • Billable Expense Income: This account tracks money your business gets from customers to cover expenses for their service.
  • Markup: This account tracks the difference between your cost of a product or service and the price you sell it for.
    Note: You can merge a non-inventory item or product and service.

Keep in mind that once merged, the original account can no longer be used. To merge these accounts:

  1. Go to Settings Settings gear icon. and select Chart of accounts (Take me there).
  2. In the account list, find the account you want to merge.
  3. From the Action column, select the dropdown ▼ menu, then select Edit to open the Account window.
  4. In the Account window, change the Name of the account to Services (or to the name you gave the Services revenue account, if you changed it).
  5. Select Save and Close.
  6. When prompted whether you want to merge the accounts, select Yes.

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