the next part of the setup is managing the chart of accounts when I say managing the
chart of accounts I mean deleting editing or adding an account we know that the chart of
accounts is the same thing as the general ledger the little picture you have here is Holdings chart
of accounts remember if it's a different type of company the account names will be different
because a different company runs differently and therefore needs a different set of accounts to
record their transactions in when we created the file in the previous video we clicked help me
choose for the industry type the reason we did that is because QuickBooks wants us to choose
what type of company we have this is because QuickBooks wants to put a chart of accounts
for us if we chose a different industry we would need a different set of accounts in our chart of
accounts so QuickBooks thought it was helping us by allowing us to choose the type of company and
then quick what QuickBooks would prepare a chart of accounts for us if you remember the choice that
we made was other none that was because we wanted to put the accounts ourselves in order to learn
it better therefore we chose other none because we did not want QuickBooks to put in any of the
accounts we wanted to put the accounts ourselves from what we know about our business and that's
what we're about to do right now from the main menu click list chart of accounts and the chart
of accounts window opens up this is the window that you will use to add delete or edit any of
the accounts in the chart of accounts notice that QuickBooks already put four accounts in the chart
of accounts for us QuickBooks did this even though we chose other none even though we told QuickBooks
we want to put the accounts ourselves and we don't want QuickBooks to put in a sample chart
of accounts QuickBooks will I'll put in these four accounts now we don't need them and we can
try to remove them or try to make them inactive if necessary the way to do that the way to remove
or edit an account that's already on the list is to right-click now when you right-click on one
of the accounts you get a submenu that allows you to edit delete or make an account inactive
deleting an account means the account is gone forever making an account inactive means it's
still there but it's hidden we're going to try to delete the accounts that QuickBooks put so we
could start fresh and put our own accounts if we cannot delete the account we will simply make it
inactive so let's try to remove the accounts that we don't want we don't have payroll liabilities so
let's right-click and click delete ok QuickBooks will not let us delete this one try the next one
right click delete click ok it's gone right click delete click OK it's gone right click delete ok
these two accounts QuickBooks will not allow us to delete no problem we can make them inactive
right click make account inactive that means it's hidden right click make account inactive
that means it's hidden now you should also know that in addition to the right click you can also
click the bottom left button the bottom left button of the list window has similar options
when there are accounts up here so if you wanted to show the inactive accounts you would go to the
bottom left then you would click on the account button and you would choose show inactive accounts
and you'd be able to see the two accounts that are inactive if you wanted to reactivate the account
you would click on it and you would either click the button in the bottom left because that would
give you the ability to make the account active or you could click on the account to choose it
and then right click and get the same choice make account active so if you don't mind seeing extra
accounts that we are not using you can leave these two accounts as active I however would like to
make them inactive because I would like to have on our chart of accounts or I would like to see
on our chart of accounts only the accounts that we physically create here are the accounts that
we will put in for Hattie's convenience store she has such a simple situation that she only
really needs six accounts in her chart of accounts it's very easy to add these accounts but there's
something you must know when you're adding new accounts in the chart of accounts when you put
the accounts on the account list you must put more than just the name you can put any name
you want and QuickBooks will allow you to spell the name of the account in any way that you want
however you cannot save an account in the list or the chart of accounts unless you also tell
QuickBooks what type or what kind of account that is each of the accounts will have a different type
or a different kind of account and you will see the reason for that in a moment so there will be
a field for you to type in the name but when you choose the corresponding type when you choose the
type of account that goes with that name what you will see is a preset pull down menu that has the
list of the account types you must choose one account type for each of the accounts in your
chart of accounts so when you go to type this in you can pause the video in this position make sure
you type the name into the name field as exactly as it's spelled here remember to make sure that
it's all in capital letters in our course every time we are the ones to add another account we
put it all in capital letters this will help show us that this is an account that we added to the
chart of accounts and not QuickBooks because when quickbooks adds an account to the chart
of accounts it's mostly in lowercase so if we add the accounts in capital letters it will be easier
for us to see which accounts we added and which accounts QuickBooks added the account type we
choose will determine how the account will behave the account type we choose will determine what
financial statement it will be on for example the account cash in Chase Bank we need to put
as a bank type of account why do we have to choose a bank type of account because if QuickBooks knows
that this is a bank type of account QuickBooks knows when we open the window to make a deposit
this is the specific account that will go up not the others not delivery expense not daily
cash sales when we physically make a deposit it's the bank type of account that goes up QuickBooks
knows this by the account type not by the name same thing with writing a check when we open a
special window just to write a check QuickBooks knows that the account that will automatically
decrease is the bank type of account regardless of what name we assign to it we will learn more
about account types in later videos however QuickBooks also needs to know which financial
statement the account will go on if the account is a bank type of account QuickBooks knows it
should be listed on the balance sheet when you run the balance sheet report and this account
should not be listed on the income statement when you run an income statement report so when you go
to put in your chart of accounts after you type in the name in capital letters excuse me you'll
probably type the name in capital letters after choosing the corresponding type for that bank
account for that account let's take a look in the bottom left button of the chart of accounts
window click account and the first choice is new now the first window that opens up requires that
you choose an account type before you actually type in the name the first account type on our
list was Bank now once you click the account type QuickBooks is giving you a little explanation of
that account type and that's all you do in the first window of add new account just choose the
account type and click continue when you click continue you get the traditional add new account
which was the normal window that we used in the older versions of QuickBooks notice the bank type
of account is already chosen in this window because that's what you chose in the previous
window you still have the opportunity to change it before you save this specific account click in
the name field make sure that your cap locks is on and type in cash in Chase Bank that's all you have
to do when you click Save and close click no for any kind of advertisement that QuickBooks might
sell to you and then you will see cash and Chase Bank has been added to the list let's do another
one account new the next one on the list is an income type of account click continue when you
get to the second window notice income has already been chosen as a type of account and of course you
could always change the choice before you type in the name and save it we will type in daily cash
sales excuse me daily cash sales now if you click Save and close he closes the window and you can
look back in your chart of accounts to make sure the name and the type is what you have however
you do not have to keep doing that each time if you are putting in several expenses at once you
can click continue and just leave expense as the account type now we can type in delivery excuse
me delivery expense and we do not have to click Save and close because that save the account on
the list but close the window in this case it would be better to click Save and new and we
can see the account is added to the list without wasting time to reopen the window leave expense
as the type and type in electric expense save and new I believe we had repair and telephone expense
also so we will click the type in repair expense save and new save time and the last expense was
yes telephone expense so oops excuse me telephone expense when we click Save and close after the
last one we now have a chart of accounts with the same names and types that we have from our video
this is how we put in delete change or make inactive an account in the chart of accounts