User Query: How do i create COA in QuickBooks?
Every business or company for accounting purposes uses a chart of accounts. The chart of accounts is nothing but the list that holds businesses’ accounts and balances. It includes assets accounts for example equipment, furniture, machinery, etc, liabilities accounts including loans, creditors, etc, income, and other expenses accounts.
With the help of a chart of accounts, you can organize the transactions in your QuickBooks company files, it also helps in organizing tax forms and details. Once you create your company file in QuickBooks, it will automatically create the chart of account for the company file on the basis of industry and type of the business. You will have to enter or record the opening balances of the accounts separately.
Steps for Setting up, accessing, and editing the chart of account in QuickBooks
As we now know already that QuickBooks automatically creates the chart of account for the newly created company file based upon the industry and type of the business. So for accessing the automatically created and set up chart of account in QuickBooks, you need to follow the below steps:
Step 1. In QuickBooks online, you need to click on settings (gear icon) and then go to the chart of accounts.
Step 2. In QuickBooks desktop, you need to go on the company list / Accountant (in case of accountant’s version) and then click on the chart of accounts.
Accounts that are automatically setup by the QuickBooks
When you create a company file and choose the industry type, QuickBooks setup certain accounts for you, those accounts are as follows:
- Account payable accounts for recording the outstanding bills in the business.
- Accounts receivable accounts for the recording of the amount that the business owes to the customers.
- Opening equity balance account to create the correct balance sheet for the business.
- Payroll expenses account for tracking and recording payroll expenses.
- Payroll liabilities, purchase orders, retained earnings, sales tax payable, uncategorized expense and income, undeposited funds, inventory, reconciliation discrepancy, etc.
Editing the chart of account
For adding a new account and sub-account in QuickBooks desktop, you need to follow the below simple steps:
Step 1. First of all, you need to go to the list > chart of accounts.
Step 2. Now you need to select the account drop-down and then click on New to create the new account. After that click on continue.
Step 3. Now you need to enter the account details. You should click on the subaccount checkbox in case it is a child account and choose the parent account from the drop-down. After that click on save and close.
For editing the existing account, you need to follow the below steps:
Step 1. At first, you need to click on the list at the top menu and then click on the chart of accounts.
Step 2. Now, right-click on the account that you wish to edit and make the necessary changes, and click on save and close.
For deleting the account from the chart account, you just have to choose the delete option after right click on the account and click on OK.
However, in case you need any further information on any point, you can reach our LIVE CHAT.