Account types

There are two main types of accounts in the chart of accounts:

Balance sheet accounts

ClosedBank

Add one bank for every account your company has at a bank or other financial institution.

ClosedAccounts receivable (A/R)

Transactions related to the customers who owe you money, including invoices, payments, deposits of payments, refunds, and credit memos.

ClosedOther 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.

ClosedFixed asset

Depreciable assets your company owns that aren't likely to be converted into cash within a year, such as equipment or furniture.

ClosedOther asset

Any asset that is neither a current asset nor a fixed asset, such as long-term notes receivable.

ClosedAccounts payable (A/P)

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.

Closed Credit card

Credit card purchases, bills, and payments.

ClosedCurrent liability

Liabilities that are scheduled to be paid within one year, such as sales sales tax, payroll taxes, accrued or deferred salaries, and short-term loans.

ClosedLong-term liability

Liabilities such as loans or mortgages scheduled to be paid over periods longer than one year.

ClosedEquity

Owner's equity (which includes capital investments and drawings), Opening balance equity, and Retained earnings. QuickBooks automatically creates these last two accounts.

Income and expense accounts

Income and expense accounts track the sources of your income and the purpose of each expense. ClosedHow?

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, you record that you took money out of your checking account, and also how you spent the money: utilities, office supplies, and so on.

QuickBooks does not display balances for income and expense accounts in the chart of accounts. ClosedHow do I know their amounts?

To see what's "in" an income or expense account, do one of the following:

The amount "in" the account represents how much was assigned that account during a period of time.

Types of income and expense accounts

ClosedIncome

The main source of money coming into your company.

ClosedOther income

Money received for something other than normal business operations, such as interest income.

ClosedExpense

Money that's leaving your company.

ClosedOther expense

Money spent on something other than normal business operations, such as corporate taxes.

ClosedCost of Goods sold

The cost of goods and materials held in inventory and then sold.