There are two main types of accounts in the QuickBooks chart of
QuickBooks provides ten types of balance sheet accounts to
choose from as you create and add to your chart of accounts. The
following table describes each type of balance sheet account and
the transactions you can use it for.
Use this account
Checking, savings, and money market accounts.
Add one bank
account for every account your company has at a bank or other
financial institution. (You can also use this type for petty
Transactions related to the customers that owe you money,
including invoices, payments, deposits of payments, refunds, credit
memos, and statements. Most companies have only one A/R
Other current asset
Assets that are likely to be converted to cash or used up within
one year, such as petty cash, notes receivable due within a year,
prepaid expenses, and security deposits.
Depreciable assets your company owns that aren't likely to
be converted into cash within a year, such as equipment or
Any asset that is neither a current asset nor a fixed asset,
such as long-term notes receivable.
Transactions related to money you owe, including bills, bill
payments, and any credit you have with vendors. See also current
and long-term liability accounts.
Credit card purchases, bills, and payments.
Liabilities that are scheduled to be paid within one year, such
as sales tax, payroll taxes, accrued or deferred salaries, and
Liabilities such as loans or mortgages scheduled to be paid over
periods longer than one year.
Owner's equity, including capital investment, drawings, and
Income and expense accounts track the sources of your income and
the purpose of each expense. When you record transactions in one of
your balance sheet accounts, you usually assign the amount of the
transaction to one or more income or expense accounts. For example,
not only do you record that you took money out of your checking
account, but you keep track of what you spent the money on:
utilities, perhaps, or office supplies.
QuickBooks does not display balances for income and expense
accounts in the chart of accounts. To see these balances, go to the Reports menu,
choose Company & Financial, and then click one
of the profit and loss report options. You can also select the
income or expense account in the chart of accounts and click
The main source of money coming into your company.
Money received for something other than normal business
operations, such as interest income.
Money that's leaving your company.
Money spent on something other than normal business operations,
such as corporate taxes.
Cost of Goods sold
The cost of goods and materials held in inventory and then
QuickBooks sets up nonposting accounts for purchase orders and
estimates if you turn on those features.
Accounts QuickBooks sets up for
Adding new accounts
Understanding expense accounts
Understanding income accounts