CHAPTER 3

SETTING UP A CHART OF ACCOUNTS

DONE BY:
SONALI SHARMA
YURI
ALEJANDRA VELASQUEZ
ADRIAN COLEMAN
 ACQUIRING A CHART OF ACCOUNTS

• WHEN YOU CREATE A NEW QUICKBOOKS COMPANY FILE AND CHOOSE AN

INDUSTRY THE PROGRAM AUTOMATICALLY SETS UP THE CHART OF ACCOUNTS
WITH ACCOUNTS THAT ARE TYPICAL FOR THAT INDUSTRY.
 IMPORTING A CHART OF
ACCOUNTS

• 1. CHOOSE FILE→NEW COMPANY; IN THE QUICKBOOKS SETUP DIALOG BOX

THAT APPEARS, CLICK EXPRESS START.
• IF YOU SEE A SCREEN THAT ASKS FOR YOUR EMAIL ADDRESS AND PASSWORD,
ENTER THE EMAIL ADDRESS AND PASSWORD FOR YOUR INTUIT ACCOUNT, AND
THEN CLICK CONTINUE.
• 2. ON THE “TELL US ABOUT YOUR BUSINESS” SCREEN, ENTER YOUR COMPANY’S
NAME, TYPE, AND TAX ID. IN THE INDUSTRY BOX, ENTER OTHER/NONE, AND
THEN CLICK CONTINUE.
• 3. ON THE “ENTER YOUR BUSINESS CONTACT INFORMATION” SCREEN, DO JUST
THAT.
• 4. AFTER YOU FINISH FILLING IN YOUR CONTACT INFO, CLICK CREATE COMPANY FILE.
• QUICKBOOKS CREATES YOUR COMPANY FILE AND THEN DISPLAYS THE “YOU’VE GOT A COMPANY
FILE! NOW ADD YOUR INFO” SCREEN IN THE QUICKBOOKS SETUP DIALOG BOX.
• 5. TO CLOSE THE QUICKBOOKS SETUP DIALOG BOX, CLICK START WORKING, AND THEN
• CLICK THE X AT THE TOP RIGHT OF THE QUICK START CENTER WINDOW THAT APPEARS.
• YOU CAN ALSO CLOSE THE QUICKBOOKS SETUP DIALOG BOX BY CLICKING THE X AT THE WINDOW’S
UPPER RIGHT.
• 6. CHOOSE FILE→UTILITIES→IMPORT→IIF FILES.
• QUICKBOOKS OPENS THE IMPORT DIALOG BOX TO THE FOLDER WHERE YOU STORED YOUR COMPANY
FILE AND SETS THE “FILES OF TYPE” BOX TO “IIF FILES (*.IIF).”
• 7. NAVIGATE TO THE FOLDER THAT CONTAINS THE .IIF FILE YOU WANT TO IMPORT, SELECT
• THE FILE, AND THEN CLICK OPEN.
 PLANNING THE CHART OF ACCOUNTS 
DO YOU NEED ANOTHER ACCOUNT?
 
• QUICK BOOKS OFFERS SEVERAL FEATURES THAT CAN PROVIDE DETAILS ABOUT YOUR
COMPANY’S PERFORMANCE WITHOUT YOU HAVING TO ADD ADDITIONAL ACCOUNTS.
• ACCOUNTS – WHEN YOU CREATE TRANSACTIONS THE PROGRAM ALLOCATES MONEY IN
YOUR CHART OF ACCOUNTS, SO WHEN YOU RUN A P&L REPORT YOU SEE FINANCIAL
RESULTS BY ACCOUNT 
• ITEMS – TRACKS WHAT YOU BUY AND SELL AND YOU MIGHT CREATE DOZENS OF ITEMS
FOR A SPECIFIC SERVICE YOU OFFER.
• EX. CUTTING DOWN TREES, CUTTING LOGS, SPITTING WOOD AND HAULING TRASH
•  SUBACCOUNTS ARE AN OPTION IF YOU WANT TO BREAK DOWN A CATEGORY EX: TRAVEL
EXPENSE CAN BE BROKEN DOWN INTO AIRFARE, LODGING, TRANSPORTATION, FOOD
• JOBS – TRACKS DIFFERENT JOBS FOR ONE PARTICULAR CUSTOMER, THIS WAY
YOU CAN ASSIGN INVOICES TO A SPECIFIC JOB AND TRACK INCOME BY JOB.
• CLASSES – SPECIFIC TO A BUSINESS BROKEN DOWN IN SEGMENTS (REGIONS,
UNITS, PARTNERSHIPS) WHICH LETS YOU TRACK INCOME AND EXPENSES ACROSS
CUSTOMERS, VENDORS, AND ACCOUNTS.
• EX: OWNING A BUSINESS BROKEN DOWN IN UNITS, YOU SHOULD ASSIGN AN
APPROPRIATE CLASS TO EACH TRANSACTION WHICH WILL ALLOW YOU TO
GENERAL A P&L BY CLASS AND YOU WILL ALSO BE ABLE TO PRODUCE AN
INCOME STATEMENT FOR EACH BUSINESS UNIT.
 NAMING AND NUMBERING   
Organizing account numbers – companies reserve ranges of numbers for different types of
accounts, so they are able to identify the type of account by its number alone.
Table 3.1 typical range for account numbers

Range Account type

1000-1999 Assets
2000-2999 Liabilities
3000-3999 Equity
4000-4999 Income
5000-5999 Cost of goods sold, cost of sales, job
costs, or general expenses
6000-7999 Expenses, overhead cost, or other income
8000-9999 Expenses or other expenses
• TYPICALLY, COMPANIES SHOW ASSETS AND LIABILITIES PROGRESSING FROM
THE SHORTEST OR THE LONGEST TERM .  ASSETS AND LIABILITIES GET SPLIT
INTO TWO CURRENT WHICH IS LIKE 3 MONTHS AND LONG TERM WHICH IS
ANYTHING BEYOND TWELVE MONTHS.
• QUICK BOOKS SORTS ACCOUNTS BY NUMBER, BEGINNING WITH THE LEFT MOST
DIGIT, ACCOUNT 4100020 APPEARS BEFORE 4104
Range Allocation
1000 -1099 Immediate cash available (checking account,
saving account or petty cash)

1100 – 1499 Assets you can convert to cash within few

months to year (accounts, receivable,
inventory assets, and other current assets)

1500 – 1799 Long term assets (land, buildings, furniture,

other fixed assets)

1800-1999 Other assets

 VIEWING ACCOUNT
NUMBERS
• IF YOU WANT TO SEE OR HIDE ACCOUNT NUMBERS IN QUICK BOOK HERE IS HOW
TO TURN THEM ON OR OFF
• CHOOSE EDIT  PREFERENCES  ACCOUNTING, AND THEN IN THE PREFERENCES
DIALOG BOX, CLICK THE COMPANY PREFERENCE TAB. (MUST BE THE
QUICKBOOKS ADMINISTRATOR)
• TURN ON THE “USE ACCOUNT NUMBERS” CHECK BOX TO SHOW ACCOUNT
NUMBERS. (TO HIDE THEM, TURN OFF THIS CHECKBOX)
• CLICK OK TO CLOSE THE PREFERENCE DIALOG BOX.
 CHOOSING GOOD ACCOUNT NAMES
• YOUR ACCOUNT NAMES SHOULD BE UNIQUE IN NAME AND FUNCTION BECAUSE
YOU DON’T NEED TWO ACCOUNTS FOR THE SAME TYPE OF INCOME, EXPENSE,
OR FINANCES .
• WAYS TO MAKE YOUR ACCOUNT NAMES CONSISTENT:
• WORD ORDER – IF YOU INCLUDE THE ACCOUNT TYPE IN THE NAME, THEN
APPEND IT TO THE END OF THE NAME INSTEAD OF “EXPENSE POSTAGE” USE
“POSTAGE EXPENSE”
• CONSISTENT PUNCTUATION – CHOOSE BETWEEN “& OR AND” FOR ACCOUNTS
THAT COVER MORE THAN ONE ITEM AND DECIDE WHETHER TO INCLUDE
APOSTROPHES OR NOT, “OWNERS DRAW” OR “OWNERS’ DRAW)
• SPACES – DECIDE WHETHER YOU INCLUDE SPACE FOR READABILITY OR BREVITY
• “DUES & SUBSCRIPTION VS DUES&SUBCRIPTION”
• ABBREVIATION – CHOOSE A STANDARD ABBREVIATION LENGTH
• POSTAGE
• 4 LETTER ABBREVIATION – POST
• 3 LETTER ABBREVIATION - PST
 CREATING ACCOUNTS AND SUB ACCOUNTS
• DEFINITION OF CHART OF ACCOUNTS:
• IT IS A LIST OF, ASSETS, LIABILITY, EQUITY, INCOME, AND EXPENSE ACCOUNTS TO
WHICH YOU ASSIGN YOUR DAILY TRANSACTION.
• DIFFERENCE BETWEEN CHILD ACCOUNT AND PARENT ACCOUNT:
• PARENT ACCOUNT IS BASICALLY THE TOP LEVEL ACCOUNT IN CHARGE OF THE
CHILD ACCOUNT. FOR EXAMPLE AUTO & TRUCK EXPENSE WOULD BE THE
PARENT ACCOUNT, WHEREAS GAS OR AUTO & TRUCK INSURANCE WOULD BE
CONSIDERED TO BE A SUB ACCOUNT. THE PURPOSE OF THE PARENT ACCOUNT
BASICALLY SUM THE INDIVIDUAL SUB OR CHILD ACCOUNTS.
• IN THE CHART OF ACCOUNTS THERE ARE 2 MAIN CATEGORIES: 

• THOSE WITH BALANCES AND THOSE WITHOUT. 

• THE ONES THAT HAVE BALANCES ARE THE ONES THAT APPEAR ON THE BALANCE
SHEET AND THOSE WITHOUT APPEAR ON THE PROFIT AND LOSS ACCOUNT.  
• WHEN STARTING UP A BUSINESS YOU WILL NEED TO CREATE NEW ACCOUNTS IN
QUICK BOOKS.
• THEREFORE, THE FOLLOWING STEPS WILL GUIDE YOU ON HOW TO CREATE A NEW
ACCOUNT. 
• STEP 1: FROM THE MENU BAR OPEN THE CHARTS OF ACCOUNTS WINDOW (CHOOSE
LISTS -> CHART OF ACCOUNTS) 
• STEP 2: PRESS CTRL N TO OPEN THE ADD NEW ACCOUNT 
• STEP 3: SELECT AN ACCOUNT TYPE FROM THE OPTIONS BELOW:
• BANK –ACCOUNTS AT THE FINANCIAL INSTITUTION
• ACCOUNTS RECEIVABLE- MONEY THAT CUSTOMERS OWE
• OTHER CURRENT ASSET- WHAT YOU OWN AND WILL BE USE OR CONVERT TO CASH
WITHIN 12 MONTHS
• FIXED ASSET- WHAT THE COMPANY OWNS AND DEPRECIATES
• OTHER ASSET- DOESN’T COVERT TO CASH OR DEPRECIATE
• ACCOUNTS PAYABLE- MONEY YOU OWE TO VENDORS WITHIN 12 MONTHS
• CREDIT CARD- PURCHASE GOODS OR SERVICES ON CREDIT
• OTHER CURRENT LIABILITIES – MONEY YOU OWE WITHIN 12 MONTHS
• LONG TERM LIABILITY- MONEY YOU OWE OVER 12 MONTHS
• EQUITY- OR NET ASSETS IS THE OWNER’S CLAIM TO COMPANY ASSETS AFTER
LIABILITIES ARE PAID OFF
• INCOME- REVENUE GENERATED THROUGH DAILY BUSINESS FUNCTION
• COST OF GOODS SOLD- THE DIRECT COST INCURRED IN THE PRODUCTION OF GOODS
OR SERVICES
• EXPENSE- MONEY SPENT TO RUN THE COMPANY
• OTHER INCOME- MONEY FROM OTHER SOURCES
• OTHER EXPENSE – MONEY PAID OUT FOR PERSONAL USE
• NON-POSTING ACCOUNT- PLAN TO BILL A CUSTOMER, BUT NOT SAVED ON AN INVOICE
•  STEP 4:  ENTER THE ACCOUNT DETAILS.
• SELECT THE SUBACCOUNT OF CHECKBOX IF IT'S A CHILD ACCOUNT.
• FROM THE DROP-DOWN, CHOOSE THE PARENT ACCOUNT. 

• STEP 5: CHOOSE CURRENCY

• STEP 6: FILL IN DESCRIPTION BOX
• STEP7: FILL IN FIELD IF AVAILABLE WITH ACCOUNT NUMBER
• STEP 8: FOR BANK ACCOUNT FILL IN THE ROUTING NUMBER IN THE ROUTING BOX
• STEP 9: TO LINK THE ACCOUNT WITH TAX FORM AND SPECIFIC LINE CHOOSE
ENTRY FROM TAX-LINE MAPPING DROP-DOWN-LIST.
• STEP 10: SELECT SAVE AND CLOSE OR SAVE AND NEW IF YOU WANT TO CREATE
ANOTHER ACCOUNT
• STEP 11: CLICK YES, ON THE SET UP BANK FEED DIALOG IF YOU WANT TO SET UP
ONLINE BANK SERVICE
 WORKING WITH ACCOUNTS

• FROM TIME TO TIME, YOU MIGHT NEED TO MODIFY YOUR ACCOUNTS TO, FOR
EXAMPLE, CHANGE AN ACCOUNT’S NAME OR DESCRIPTION.
• THE EDIT ACCOUNT WINDOW LETS YOU TWEAK AN ACCOUNT’S NAME OR
DESCRIPTION, ADJUST ITS NUMBER TO MAKE ROOM FOR NEW ACCOUNTS, OR
CHANGE ITS LEVEL IN THE CHART OF ACCOUNTS HIERARCHY.
• YOU’RE NOT LIKELY TO CHANGE AN ACCOUNT’S TYPE UNLESS YOU CHOSE THE
WRONG ONE WHEN YOU CREATED THE ACCOUNT.

• YOU CAN’T CHANGE AN ACCOUNT’S TYPE IF:

• • IT HAS SUBACCOUNTS.
• • IT’S AN ACCOUNTS RECEIVABLE OR ACCOUNTS PAYABLE ACCOUNT. (YOU ALSO
CAN’T CHANGE
• OTHER TYPES OF ACCOUNTS TO AR OR AP ACCOUNTS.)
• • QUICKBOOKS AUTOMATICALLY CREATED THE ACCOUNT, LIKE UNDEPOSITED FUNDS
HIDING ACCOUNTS
 IF YOU INSIST ON DELETING AN ACCOUNT, HERE ARE THE
CONDITIONS THAT PREVENT YOU FROM DOING SO AND
WHAT YOU HAVE TO DO TO REMOVE THESE CONSTRAINTS:

• AN ITEM USES THE ACCOUNT. IF YOU CREATE ANY ITEMS THAT USE THE ACCOUNT AS AN INCOME
ACCOUNT, EXPENSE ACCOUNT, COST OF GOODS SOLD ACCOUNT, OR INVENTORY ASSET ACCOUNT,
YOU CAN’T DELETE IT.
• • THE ACCOUNT HAS SUBACCOUNTS. YOU HAVE TO DELETE ALL SUBACCOUNTS BEFORE YOU CAN
DELETE THE PARENT ACCOUNT.
• • PAYROLL USES THE ACCOUNT. YOU CAN’T DELETE AN ACCOUNT IF YOUR PAYROLL SETUP USES IT.
• • A TRANSACTION REFERENCES THE ACCOUNT. IF YOU CREATED EVEN ONE TRANSACTION THAT
USES THE ACCOUNT, EITHER EDIT THAT TRANSACTION TO USE A DIFFERENT ACCOUNT OR HIDE
THE ACCOUNT IF YOU WANT TO KEEP THE TRANSACTION THE WAY IT IS.
• • THE ACCOUNT HAS A BALANCE. AN ACCOUNT BALANCE COMES FROM EITHER AN OPENING
BALANCE TRANSACTION OR OTHER TRANSACTIONS THAT REFERENCE THE ACCOUNT. YOU
REMOVE AN ACCOUNT BALANCE BY DELETING ALL THE TRANSACTIONS IN THE ACCOUNT.
 MERGING ACCOUNTS
• HERE’S HOW TO ELIMINATE AN EXTRANEOUS ACCOUNT:
• 1. SWITCH TO SINGLE-USER MODE..
• 2. PRESS CTRL+A TO OPEN THE CHART OF ACCOUNTS WINDOW. THEN, IN THE CHART
OF ACCOUNTS LIST, CLICK THE NAME OF THE ACCOUNT YOU WANT TO ELIMINATE
AND THEN PRESS CTRL+E. 3. IN THE EDIT ACCOUNT WINDOW, CHANGE THE ACCOUNT
NUMBER AND NAME TO MATCH THE VALUES FOR THE ACCOUNT YOU WANT TO KEEP.
• 4. IN THE EDIT ACCOUNT WINDOW, CLICK SAVE & CLOSE, READ THE MESSAGE
INFORMING
• YOU THAT THE NAME IS IN USE AND ASKING IF YOU WANT TO MERGE THE
ACCOUNTS, AND THEN CLICK YES.
THANKS FOR YOUR ATTENTION AND
PARTICIPATION!!!