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Add an Account to QuickBooks

When you set up your company file, QuickBooks automatically creates several accounts for you. As your business grows and changes,
you might need to add new accounts to your Chart of Accounts to better organize your finances.


How to Add an Account

1. Go to the Lists menu and click Chart of Accounts

2. Click the Account menu button, then click New

3.Select the type of account you want to create, then click Continue

4. Enter information about the account:

  • In Account Name, enter the name of the account as you want it to appear on your financial statements
  • Enter additional info about the account as needed based on the account type (e.g., bank account number)
  • If you need to enter an opening balance for a balance sheet account (such as for an existing bank account that you didn’t set up during the EasyStep Interview), click Enter Opening Balance and enter the balance as of the QuickBooks Start Date

5. Click OK

 

TIP: For a Brand New Account

When you create a brand new account that you didn’t have as of the QuickBooks Start Date, leave the opening balance at zero.

Its opening balance is created automatically when you transfer funds from another account.

What Type of Account Should You Use?

There are 2 main types of accounts to choose from in QuickBooks:

  1. Balance Sheet Accounts (includes bank accounts)
  2. Income and Expense Accounts

Use the following info to help you understand what certain account types track... and which accounts you should select for different needs.



Balance Sheet Accounts

BANK
Tracks chequing, savings, petty cash, etc. Add one bank account for every bank account your company has.

ACCOUNTS RECEIVABLE (A/R)
Tracks transactions for money owed to you (e.g., invoices, refunds). Most companies have 1 A/R account (except when using multiple currencies).

OTHER CURRENT ASSET
Tracks assets you're likely to use up within a year (e.g., prepaid expenses).

FIXED ASSET
Tracks depreciable assets you own that aren't likely to be used up within a year (e.g., equipment).

OTHER ASSET
Tracks any asset that is neither current nor fixed.

ACCOUNTS PAYABLE (A/P)
Tracks transactions for money you owe (e.g., bills).

CREDIT CARD
Tracks credit card purchases, bills & payments.

OTHER CURRENT LIABILITY
Tracks liabilities that are scheduled to be paid within a year.

LONG-TERM LIABILITY
Tracks liabilities that are scheduled to be paid over periods longer than a year (e.g., mortgages).

EQUITY
Tracks owners' equity (e.g., capital investments), owners' draws & retained earnings.



Income & Expense Accounts

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

When you record transactions in a balance sheet account, you usually assign the amount of the transaction to one or more income or expense account.

INCOME
Tracks the main source of money coming into your company.

OTHER INCOME
Tracks money received for something other than normal business operations (e.g., interest income).

EXPENSE
Tracks money that is leaving your company.

OTHER EXPENSES
Tracks money spent on non-standard business operations (e.g., corporate taxes).

COSTS OF GOODS SOLD
Tracks the cost of items that you sell.

Next Step // Add customers and suppliers >>