After you complete the initial setup of your chart of accounts, you can maintain your chart of accounts, adding, editing, or deleting accounts as necessary, from the Account List tab of the Accounts screen.
The Account List tab lists all of the accounts you have defined. Columns identify the type, class, and category of each account and indicate whether it is a subaccount of another account for easy reference. From this screen, you can add new accounts, delete accounts you do not use, or edit information for existing accounts such as linking a subaccount to a parent account or identifying a bank for a cash account.
Categories
Categories are used for internal processing - for example, as automatic offset accounts for cash transactions or line items, such as sales tax or freight, used when calculating invoices or payments. You can link accounts to categories on the Category List tab.
Subaccounts
Subaccounts organize related accounts, such as detailed types of advertising, insurance, office, or utility expenses, or to fund accounts beneath a main cash account. Subaccounts inherit properties such as type, class, and tax code from the parent.
If the subaccount is a cash account, it also inherits the parent's bank, allowing you to reconcile the parent and all of its subaccounts in the same bank reconciliation. Transactions can be written to subaccounts in the same way as any other account.
To add, edit, or delete an account in the chart of accounts:
1. Select Accounts from the Company menu to open the Accounts screen.
The Account List tab is selected by default, displaying the chart of accounts in table format.
For each defined account, the table displays columns listing the Account code, Description, Type, Class, and Category for each account, and identifies the parent account if this is a subaccount.
You can use the Select Account Type drop-down list to narrow the list to display only accounts of a particular type.
2. Click Add to enter a new account, or click an existing account in the list to review or edit the account.
The Account Details panel appears on the left side of the tab. For new accounts, the fields are blank. For existing accounts, the fields are pre-populated with the account's details.
3. Enter or edit the identifying account number for this account in the Account Number field and enter a unique description for the account in the Description field.
Alternatively, you can click Delete to delete an existing account if it has not been used in a transaction or assigned to a category code.
Note: To delete a cash account linked to a bank, you must first delete the bank.
4. Click the Subaccount checkbox if the account is a subaccount of another account, and select the parent account from the drop-down list that appears.
If the account has subaccounts linked to it, the Parent Account indicator appears in the Account Details panel.
5. Select an Account Type from the drop-down menu.
You can specify that this account is an Asset, Liability, Capital, Revenue, or Expense.
6. Use the drop-down menu in the Class Code field to select a Class Code.
Important!! You must specify a class for all accounts to be able to generate financials.
The options in this field depend on the Account Type you selected. In addition to Account Type, this qualifier further characterizes the account, restricting the Category Codes that can be applied to this account, and defining the position of the account on your financial statements.
7. Select a Category Code from the drop-down list, if applicable.
Categories are used for internal processing; for example, as automatic offset accounts for cash transactions, or line items like sales tax or freight used in calculating invoices or payments.
You can use the Category List tab to link accounts to categories.
8. If you add an account with Account Type Asset, Class Code Current Assets, and Category Code Cash, the Create Bank option appears. Select the checkbox to create a bank for this account.
If necessary, create the following:
§ Create Cash Accounts and Banks: Any cash account can be associated with a bank. To create this relationship, add an Asset account with Class Code CA-Current Assets and Category Cash and click Cash Account. Enter details for this bank in Bank Setup.
§ Use Miscellaneous Classes in Expense Accounts: Expense accounts can be assigned to one of three user-defined Miscellaneous classes, for any industry (such as hotels or restaurants) that requires specialized types of expenses for managerial reporting. When you format your income statement, you can provide your own names for these classes.
§ Create Capital Accounts: For partnerships, S corporations, and LLCs, the most efficient way to create the capital accounts is for the system to generate them when you enter partner or shareholder names and percentages.
9. Verify the balance for the account in the Beginning Balance field.
Use the Beginning Balances tab to enter opening (not mid-year) balances for all accounts.
10. Click Save to save the new or edited account, or Cancel to abandon an entry in progress.
You must save your entries on this tab before moving to another tab of the Accounts screen.