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Why use subaccounts?

To make a large account more manageable or to group related expenses together for your reports, it's useful to set up subaccounts. Another way to think of this is that you are breaking down general expenses into greater detail.

In QuickBooks, the more general category of expenses is called a "parent account." The more detailed categories that are grouped under the parent account are called subaccounts. Subaccounts let you track several related types of income or expenses independently yet keep them all under the "umbrella" of a single parent account.

For example, if your business has substantial advertising expenses, you might decide to divide your Advertising expense account into several subaccounts, such as Newspaper Ads, Signs, Yellow Pages Listing, and Direct Mailings. Your chart of accounts displays these accounts in the following manner:


   Direct Mailings

   Newspaper Ads


   Yellow Pages Listing

Your reports will now show subtotals for the various ways that you advertise, as well as the total for all of your advertising.

In your chart of accounts, each subaccount appears indented immediately below its parent account. If the subaccount is a balance sheet account, QuickBooks includes its balance in the balance of the parent account. When you open the register of the parent account, the register shows all the transactions in the subaccounts.

Important: To avoid duplication in your income tax reports, don't assign tax lines to both the parent account and its subaccounts. Assign tax lines only to the subaccounts. To do this, click the Tax Line drop-down list in the New Account or Edit Account window, and choose the appropriate tax line, or choose .

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