QuickBooksHelpIntuit

Learn about the chart of accounts in QuickBooks Online

by Intuit•1670• Updated 3 days ago

The chart of accounts is a comprehensive list of your QuickBooks Online accounts and their current balances. It acts as the primary tool for grouping transactions and tracking financial health, whether you manage business records or use QuickBooks for personal finances. Use it to keep your books current and understand where money is coming from and where it's going.

For a better experience, open this article in QuickBooks Online. Launch side-by-side view

The QuickBooks design has been updated! If this video doesn't match what you see in QuickBooks, use the in-app Search bar to navigate to the page you need.

Find flexible solutions for your growing business with QuickBooks Advanced. With unlimited chart of accounts and up to 25 users, you have room to grow. Learn more about QuickBooks Advanced today.

Hi, this is Katheryn from the QuickBooks team. The Chart of Accounts is the hub of your accounting. It’s the central place where you decide how you organize your transactions. Every account or category you use in QuickBooks for every transaction comes from the Chart of Accounts. Let's go over the Chart of Accounts, how it helps you organize your business, and how it affects your financial statements. To get to the Chart of Accounts, select the gear > Chart of Accounts. Every transaction you record in QuickBooks affects at least two of these accounts. Usually, it’s the bank or credit card account you spent or received money to, and then an account that describes why. Let’s look at an example. Open the Bank Transactions screen. You see a purchase of some staplers for the office. The transaction is already assigned to the correct bank account. And, QuickBooks suggest the most likely category. You just need to enter or confirm the correct category for why you spent the money. Office Supplies, which is an expense account. Back on the Chart of Accounts, the balance for the bank account decreases by what you spent on the staplers. But down in the Office Supplies expense account you don’t see a balance, like you do with the accounts at the top. Let’s look closer at the types of accounts to see why. Each account uses a specific type. The type tells QuickBooks what the account should track, either the balance of the account, or a total of the transactions for specific time periods. Accounts at the top of the list show you how much you own or owe right now. They include accounts you’re already familiar with, like bank accounts, or credit cards. They have balances that tell you how much money you have in those accounts, or how much you owe. Other accounts, like fixed assets, tell you the value of things you own, like a truck or a warehouse…and liabilities tell you how much you owe, like on a mortgage. Equity accounts show you how much the business is worth to the owner. They also help you track ways the owner invests or draws money from the business. You use equity accounts when the owner deposits money into the business, or when they withdraw money for their personal expenses. Income accounts help you track why you receive money from customers or donors. Cost of goods sold and expense accounts, like Office Supplies, help you track your spending. These accounts don’t have balances because they help you track the profit of your business for a specific time period. You don’t usually want to see how much you spent on Office Supplies since you opened your business. So instead, you run a report to see how much you spent for a month or year. QuickBooks comes with many accounts already set up for you. However, you’ll probably want to add some more. When you do you can add them here. This other video here will show you how. Your accounts don’t have account numbers by default, but you can check out this video to learn how to turn on account numbers. Note that it’s best to work with your accountant to decide which accounts will give you the best insight into your business. Now let’s look at a report. Select Reports. As you categorize transactions, QuickBooks builds your financial statements behind-the-scenes. These are powerful tools that let you and your accountant know how your business is doing. Let’s take a look at the Profit and Loss statement. The Profit & Loss shows all your income, costs of goods sold, and expenses for a specific period of time. These are the same accounts you see in your Chart of Accounts. The total for Income is a sum of all the transactions you categorize as Sales income during this period. The total for Expenses is a sum of all the transactions you categorize as Expenses during this period. And the Office Supplies total includes the stapler expense we recorded earlier. The final line subtracts all your cost of goods sold and expenses from your income to show you the Net Income. If you want to learn more about how to read Reports in QuickBooks Online there is a video at the end of this one with more details. Now you have a basic understanding of what the chart of accounts is and how it affects your transactions and financial statements. If you want to learn more, we have a free Accounting 101 webinar that you can sign up for here.

Get familiar with the chart of accounts

To view your chart of accounts:

Go to All apps A bunch of numbers and letters on a tile wall. , then Accounting, then Chart of accounts (Take me there).

Your accounts appear in a table with columns for name, account type, detail type, balance in QuickBooks, bank balance, and action.

Learn about account types

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

Assets: Money spent on vehicles, equipment, buildings, or other assets used for business.
Liabilities: Money you owe but haven't yet paid, like loans, mortgages, or lines of credit.
Income: Money you earned or gained from your normal day-to-day business, like sales revenue or income from services rendered.
Expenses: Money you spend on things you do every day, like advertising, office supplies, or rent.

Customize your chart of accounts

Tailor the view of your chart of accounts to see the information most relevant to you:

Batch edit: Select the Batch edit (pencil icon) to update multiple account names or types at once.
Print: Select the Print icon to create a physical or PDF copy of your list.

Columns: Select the Settings (gear icon) above the list to add or remove columns like bank balance or detail type.

Manage accounts with registers

Accounts with registers allow you to review transaction history and current balances. To access this data, select View register or Run report from the chart of accounts screen.

Default QuickBooks accounts

QuickBooks automatically creates specif

ic accounts to help you categorize your finances: creates for you:

Accounts Payable (A/P): Outstanding bills that your business owes. If you have more than one A/P account, you can pick which one to use when you enter and pay bills.
Accounts Receivable (A/R): Transactions related to customers who owe you money. If you have more than one A/R account, you can pick which one to use when you create an invoice or receive a payment.
Opening Balance Equity: Your starting balance before you enter your company's assets and liabilities.
Payroll Expense: Payroll items (expenses) for the company, including salaries, wages, bonuses, commissions, company contributions such as company paid health plans, and company paid portion of taxes such as Social Security and Medicare.
Payroll Liabilities: Taxes you take from your employees' pay that you owe the government. These taxes include federal and state income taxes, local taxes, and the taxes paid by the employee like Medicare and Social Security.
Payroll Tax Asset Holding: This account is only available if you have QuickBooks Online Payroll and we pay your taxes for you. This account keeps track of taxes we debit from you when you run payroll, but haven't yet paid to the tax agencies.
Retained Earnings: All profits from earlier periods that haven't yet been distributed to owners. At the beginning of the fiscal year, QuickBooks automatically transfers net income into your retained earnings account.
Sales Tax Payable: Sales tax you collect and pay. You might not see this account if you haven’t turned on sales tax in QuickBooks.
Uncategorized Expense: Money your business spends that needs to be categorized.
Uncategorized Income: Money your business earned that needs to be categorized.
Undeposited Funds (also called Payments to Deposit): Cash or checks that your business is ready to deposit at the bank.
Inventory Asset: Your inventor’s current value. You might not see this if you haven’t turned on inventory tracking.
Reconciliation Discrepancy: Reconciliation adjustments. This account is automatically created if you have a discrepancy in a reconciliation.

Advanced features and expert help

QuickBooks Live Expert: If you need assistance managing your chart of accounts, you can partner with a professional. Find out more about QuickBooks Live Experts.
QuickBooks Online Advanced: For growing needs, this version offers unlimited accounts and up to 25 users. Learn more about QuickBooks Online Advanced.