How to create Chart of Account?
How to create Chart of Account?
How to add /Edit/Delete/Inactive an account in Quick Books?
Chart of account is pre-requisite for in any accounting solution at the time of implementation. Every ERP & small Accounting applications have different ways and account types to add chart of account.
The most important thing is to have unique and flexible numeric codes for each type of account. These account codes should be created with such a technique that you can later add specific type of account in hierarchy.
Normally chart of account is prepared in four levels to substantiate hierarchy of account types/FS elements. e.g., Assets, Liability, Equity, Income, Expense. Drawings are accounted for in Equity type and Expenses are further split into Cost of Sales & Expenses (Admin, Selling, Financial).
Coding custom being mostly followed is under given but you may define your own suitable and logical coding for each type;
FS Elements Denomination
Assets - 1
Liability - 2
Equity - 3
Revenue - 4
Cost of Sales - 5
Expenses - 6
Each numeric code helps you to identify account type either it is asset type or liability etc. coding string length also depends on your discretion. You may define length according to your code structure.
In quick books you can operate your software with OR without Coding. You can activate Coding from company preference tab in Accounting pan.
To create/add new Chart of account or Add/Edit/Delete or Inactivate an account in Quick Books follow these simple steps:
Press "Ctrl + A" or Click "Chart of Account" or Account listing in "List Tab" on home page to open the chart of account window.
The chart of account is displayed in either Hierarchical form or Flat structure in the form of single column.
click on Activities and then click "New Account" or press Short cut Key "Ctrl + N" to open the form for adding new account. Different types for accounts can be created based on given categories. A little Information/purpose about each category is given on selection of that category.
- Income
- Expense
- Fixed Asset (Major Purchases)
- Bank
- Loan
- Credit Card
- Equity
- Accounts Receivable
- Other Current Asset
- Other Asset
- Accounts Payable
- Other Current Liability
- Long term Liability
- Cost of Goods Sold
- Other Income
- Other Expenses
For creating hierarchical structure and different levels, parent and child relationship build first. To create a child click on check box "Subaccount of " and select the account to be parent of this. When you create a parent, no need to check sub account of. In sub account only accounts with same family/account nature with appear in dropdown.
THE CHART OF ACCOUNT IS WELL EXPLAINED SIMPLY AS WELL AS EASILY.
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