The chart of accounts Flashcards
What is the chart of accounts?
The chart of accounts is a crucial component of the accounting system that organizes and categorizes all financial transactions recorded in QuickBooks Online. It allows users to analyze their business’s financial data, run financial reports, and prepare for taxes.
How can QuickBooks Online help in setting up the chart of accounts?
QuickBooks Online creates a tailored chart of accounts for a client’s business based on the information provided during the subscription activation. Users can then edit and organize this list according to their needs. Once set up, QuickBooks Online assists in assigning business transactions to the correct accounts, simplifying the management and preparation of books.
How can the chart of accounts be accessed in QuickBooks Online?
Users can access the chart of accounts in QuickBooks Online by selecting the “Transactions” tab from the left-hand navigation, followed by “Chart of accounts,” or by selecting the gear icon and then “Chart of accounts.
What information is displayed in the chart of accounts?
The chart of accounts is organized as a list that provides essential details for each account, including the name, account type, and both QuickBooks and bank balances for the account. Users can customize the displayed information by selecting the small Grid Gear icon and choosing the relevant columns.
What are the main account types in QuickBooks Online?
The main account types in QuickBooks Online include Income, Expenses, Assets, and Liabilities. Each account needs to be assigned a specific account type, which determines the financial report to which the account’s data is added to ensure accurate analysis of a business’s financial health.
How can clients add accounts to the chart of accounts in QuickBooks Online?
The majority of accounts needed are automatically created when clients activate their subscriptions. However, they can add more accounts specific to their businesses by navigating to the chart of accounts screen, selecting “New,” choosing the appropriate category for the new account, and filling in the necessary details before saving the new account.
Can clients create subaccounts within accounts in QuickBooks Online?
Yes, clients can create subaccounts within accounts to group multiple similar accounts together. This makes it easy to analyze similar types of accounts together and drill down as needed. Clients can follow a similar procedure as creating a new account, but they should choose an existing account from the “Save account under” dropdown rather than an account type to create a subaccount.
