This article covers general information about chart of accounts in QuickBooks Desktop. See record account opening balance if you just created your company file and you need to enter an opening balance.
Chart of accounts is a complete list of all the company’s accounts and balances. You can tell how much money your company has, how much money it owes, how much money is coming in and how much money is coming out by simply looking at your Chart of Accounts.
QuickBooks Desktop automatically creates your Chart of Accounts based on the industry and type of company you chose when you created your company file. Mainly, these accounts are categorized into two types called Balance Sheet Accounts and Income and Expense Accounts.
Balance Sheet Accounts
Balance sheet accounts are accounts that appear on a balance sheet report. These are accounts that represent the money or things that you own and the debts that you owe. This includes assets like banks accounts and buildings and the money that people owe you. It also includes liabilities like credit cards and loans from banks. Another category of balance sheet accounts is equity account which represents the health of your business. Each balance sheet account has its own register that tracks the balance of each account.
Income and Expense Accounts
Income account tracks the source of your company's income while expense account tracks what your company is spending. Unlike balance sheet accounts, Income and Expense accounts do not have their own registers.
When you create a new company file, QuickBooks Desktop requires you to select a type of company which determines the Chart of Accounts your company file will begin with. However, there are accounts that QuickBooks Desktop automatically creates regardless of the company type selected.
QuickBooks Desktop automatically creates the following accounts when you need them.
Quick tip: Using Account Numbers is QuickBooks Desktop is a company preference that you need to turn on. Go to Edit > Preferences Accounting > Company Preferences > Use account numbers.
Add an Account
Edit the Account Number
Activate Online Services
Deactivate Online Services
Display Balance of non-balance sheet accounts in Chart of Accounts