and now we will learn how landlords would manage their chart of accounts if you have any questions
about this topic you can leave them in the comment section below and I'll do my best to help you and
of course if you feel the video helped you I hope you will click like and don't forget to
subscribe to get updates on new videos that come out all the time what is the chart of accounts
well in the days before the computer the chart of accounts was called the general ledger it was
simply a notebook where each page in the book was a separate record of a different thing that the
company had to account for for example page 1 was video income that means every time they performed
that particular service they would write it down on page 1 page 6 was repair expense that means
every time they paid for that particular expense they would write it down on page 6 this way they
could get the total of page 1 and know the total video income they earned and they could get the
total of page 6 and know the total repair expense they had each page was called an account because
it would account for the records of that item nowadays we don't call it the general ledger
it's the same idea but physically it's in the computer so we call it the chart of accounts so
an account is an individual record of transactions you need an account for each bank account credit
card account income source and expense that your company has now after you create your
QBO account QuickBooks gives everybody 23 to 24 standard accounts in the chart of accounts
that's simply the way QuickBooks Online behaves in the current 2019 version it was different in
a versions and it probably will be different in future versions but I'm recording this in 2019
which means you cannot delete any of the standard accounts that QuickBooks has given you in your
chart of accounts unfortunately you must make them inactive which simply means removing them from the
list and of course don't worry you could always reactivate the accounts if needed so what am I
talking about well in order to get to the chart of accounts you would click accounting and notice you
have two choices or they flashed on the screen chart of accounts and reconcile now since this
is the very first time that we're opening the chart of accounts window you will not see the
chart of accounts when you click here you will instead see this green button see your chart of
accounts because it's the very first time you're opening the window in this account so we click
the green button and now we can see the standard set of accounts that are automatically given to
everyone who opens up a brand new I guess it's 26 accounts and opens up a brand new QBO account so
how do we manage this well this is the account of accounts that we need to put and I explained
this a moment ago these are the accounts that a landlord or property manager would need well how
am I going to get them into this how am I going to get the accounts with these names and these types
we will not address the issue of detail type in this course just follow the example and of course
you could read the reading material in QBO if you feel it necessary now this is the sample chart of
accounts that we will use for this course most of them are in capital letters I suggest you put
them in with capital letters this way your eyes can clearly distinguish between the accounts that
we put ourselves and the accounts that QuickBooks put automatically notice it has both account name
an account type for each of the accounts that were going to put now account name can be anything you
want as long as you know what that means you can spell it any way you want but keep in mind
whatever you type in for account name is exactly the way it will show up on any of the QuickBooks
reports but regarding account type you have to be very careful that you choose the correct type now
please note account type in QuickBooks is not the same thing as account type when studying
accounting theory account type in QuickBooks simply determines how it behaves in the software
as we use it please view the Supplemental video about what you called defending the method which
means I will explain why the account types are the types that I have chosen in order to get the file
to work properly specifically for a property manager or our landlord so please watch that
supplemental video and in the meantime please cooperate along with what we request that you
do when we ask you to put the specific account types for the specific names to customize the
chart of accounts so the accounts that QuickBooks Online has given us becomes the accounts that we
need first we have to try to make inactive any of the ones we're not using but any account
that we can't make inactive we should simply change to the ones that we need so how do we
do that well let's take a look for example this uncharacterized asset that's not on this list or
actually this list right so let's try to make it inactive click here and click make inactive are
you sure yes now it says it's part of the online banking features so that's an example of one that
you just have to leave on your list and ignore what about this owners investment ok well ok we
click here excuse me if you accidentally like here you can click back click the pull down arrow and
click make inactive are you sure yes well that one was allowed to be removed as inactive I'll
bet you this one I'll bet you billable expenses income we're definitely not going to need that
watch what happens again click the arrow and click make inactive and click yes and it allows
us to do that now don't worry the accounts are still there even if you scroll down you won't
see them on the list because right now you're only viewing active accounts but if you click this COG
wheel you have the ability to click this check mark and say you know what include the inactive
accounts and notice after we click away to to save it notice on categorized asset head return
has returned and billable expenses has returned and to indicate that they have been made inactive
they have parenthesis deleted so now we can see them and we can open them up if we need to or do
whatever we need if they were on the list before ok so now we'll just remove the check mark and
they will take it off so let's just try and make as many inactive as we can as long as the video
runs and any ones that remain will decide how we want to change them into the accounts that
we need ok sales I think we can just well look let's go help ok make inactive are you sure yes
ok it's ok so it won't let us do that because it's connected to an item and we will learn:about items
in the following video but uncharacterized income let's see if it lets us do that make
an active yes well it won't let us take that one off either what about advertising and marketing
ok make inactive yes it lets us do that okay what about bank fees and of course some of these were
going to put back on when we add the accounts but what about bank fees ok make it active does it let
us take it off yes do as many as you can car and truck you don't need a car and truck if you're a
landlord you can take it off job supply we'll put a different account that's better make an active
yes okay and so on rent and lease make inactive yes and of course if you have a need to see the
inactive ones boo you can click here and you can see they're put back on the list and you can see
they're deleted and of course you could always reactivate them by clicking make active now when
I remove this and I show only the active ones you can see that reimbursable expenses has been put
back on the list so what I'm going to do is pause the video and make as many inactive as I can and
I suggest you do the same then when we come back we will add the ones that we need now after making
as many as I can inactive I noticed that these five I'm simply stuck with so we will simply
leave them on our list in the chart of accounts and disregard them as we add the ones that we
need and again these are the ones that a landlord would need now a quick note QBO quickbooks online
has both an account type and a detail type for the accounts usually the detail type means nothing and
you can just use judgment based on the name but it's only important in one case undeposited funds
if you look at the third account down on the list you will see that we're going to add undeposited
funds and you can see that it's a other current asset but in addition to telling quickbooks online
that this is another other current asset we're also going to tell quickbooks online that this
is specifically undeposited funds that is the only time that detail type matters all the other times
detail type will not matter so we come back here and then we could go to the top right we're still
in the accounting chart of accounts area and quickbooks online and we click new and we get
the new account window now the first one is named cash and bank and it's a bank type of account so
that's what we'll put it's a bank type of account the detail type is something like checking in this
case and we will call it whatever the name it says cash and bank ok put it in all caps so we know we
are the ones who made it cash in bank good now you could either go save and close or save and
new if you're putting in a list it's better to click save and new because it will save it and
keep the window open now the next one the type is accounts receivable which is fine but the name
should be unearned rental income so in capital letters will put unearned rental income and then
click Save and new and it will go on the list if you take a peek behind you you'll see the new ones
are coming on the list but we don't want to break our momentum now the third one is undeposited
funds and again it's the only one where the d-type detail type matters so we're going to
choose either current asset and for detail type will choose undeposited funds that's the only one
we're detail type matters and we'll even leave the name undeposited funds and lowercase to indicate
it was something that quickbooks put save and new and it's on the list what's next Holden's
investment and that's equity now unfortunately we actually deleted one that was here that we
could have changed into that but let's just put I think the closest to this is partners equity
so we'll leave it at that it really doesn't matter and we'll name it Holden's investment
and this will be the account that represents all the money that Holden invested investment Holden
invested Holden Holden's investment save and new and what's next on the list Holden's withdrawals
also an equity account so we go to the type of equity and let's see if we can get all partners
partners distributions I think is the closest to Holden's withdrawals okay save and new very good
okay now what's next on the list you could you don't have to put an opening balance equity and
retain earnings but you should put income from late fees as an income type of account so we
go down here and we find income type of account and for sub-account service fee income I think
is more appropriate but again in this case the detail type won't affect us and we'll put the
name that we're supposed to put for the course rental income earned and we're going to click
this time save and close because I want to take a peek at what we've put so far now here's the chart
of accounts that we put so far notice the ones that we put have the name in capital except of
course on deposited funds but it doesn't have everything we need yet what you have to do is
you have to keep going until all of these accounts are in the list in the chart of accounts for the
correct name and the correct type and from this point forward you don't have to worry too much
about detail type just use your judgment and if you choose the wrong detail type I assure
you it will not affect anything you do for the rest of the course just make sure account type
is correct and that the names are correct and when you finish I will show you what the chart
of accounts looks like so I'm going to pause the video and put in the rest of and show you what
it looks like now this is what your final chart of account should look like here are the names
types and detail type don't worry so much that your detail type doesn't match mine but you know
I'm gonna scroll down very slowly so that you can see what I put and try to make your chart
of accounts exactly the same as mine remember if you mess up you could either just edit the
account or make it inactive and put it again on the list you can edit an account but some account
types the detail type usually it will let you change but some account types QuickBooks may or
may not let you change and you might have to just make the account inactive and re-enter it brand
new so again I'm gonna go very slowly and these are the choices I made for detail type and now
we have everything we need regarding the chart of accounts to manage our property records you