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Welcome back to the Community, Sarah! It’s great to see you again! Ensuring your client's Chart of Accounts is set up correctly is essential for accurately tracking financial data. I'll discuss how QuickBooks Online (QBO) works in creating asset accounts and assist you with resolving the error you've encountered.
In QBO, you can create an asset account to track the current value and depreciation of your assets. The update of the Company type won't affect your Chart of Accounts (COA) structure. With this, you'll have to manually set up your fixed assets accounts (accumulated amortization, depletion, or depreciation).
Before doing so, please note that Fixed Asset accounts such as Accumulated Amortization, Accumulated Depletion, and Accumulated Depreciation are considered contra-asset accounts. This means they reduce the value of their corresponding parent asset accounts. Therefore, they cannot be included as parent accounts and should instead be established as sub-accounts. Follow these steps to complete this process:
- Go to Settings or the Gear icon, then select Chart of accounts.
- Click New.
- In the Account name field, enter the name of the account.
- Choose Fixed Assets or Other Assets in the Account type dropdown.
- From the Detail type section, pick Accumulated Amortization, Accumulated Depletion, or Accumulated Depreciation.
- Hit the Make this a subaccount checkbox and then decide which Parent account it belongs to.
- Once done, Save it.
Please see this article to find more insight and guide you in adding an asset account: Set up an asset account in QuickBooks Online.
Additionally, you might want to generate a QuickReport of your Fixed Asset accounts to evaluate the depreciation of your assets. To do so, visit the COA page, locate the account, and choose the Run report option from the dropdown arrow below the Action column.
Moreover, have you heard about our QuickBooks Live Expert Assisted team? They excel at simplifying the way you manage entries and handle your finances. I highly recommend exploring their services; you might find their support to be a significant boost for your accounting journey!
With these details in hand, you’re now able to update your client's Chart of Accounts in QBO. If there are any additional questions or you need further clarification about the process, please don’t hesitate to click the Reply button. I’m always here to help. Take care, Sarah, and I hope you have a fantastic day ahead!
