and now we will learn how contractors can input and manage their chart of accounts now you may
well ask what is the chart of accounts well in the old days before the computer the chart of
accounts was called the general ledger it was a book like a notebook where each separate page
in the book was an account now an account is a record of transactions so each separate page in
the book that used to be called the general ledger was a separate record of transactions and in the
old days you needed an account for every bank account credit card account source of income
and expense you have and each of those would be kept separately on separate pages of the book
which was the general ledger and each separate bank account in each separate credit card income
or expense would have a separate list of their transactions on the separate pages you may need
some more accounts than just the four types that I listed up there but we'll cover them as we go
along in the course the chart of accounts window will allow you to add edit delete or make inactive
any account in the chart of accounts and that's what we're going to do together step by step in
this video the total accumulated results of the accounts in the chart of accounts are on
the report that we put up in the icon bar earlier today the trial balance and you will see after the
chart of accounts are set up in future videos when we record transactions they will go into
the chart of accounts and the accumulated totals will show in the very first report that we put
in the icon bar which was the trial balance as you will soon see now here's how you manage the
chart of accounts first we will learn how to delete an account when you first open the file
that we created in the previous video you have to open the chart of accounts window the way to
do that is to go to the top left of the main menu and click list chart of accounts now you
may well notice that QuickBooks already put some accounts and the chart of accounts for us and the
one in capital letters tells us that that's one that we put and we put that in a previous video
now the first action that we will learn is out to delete one of the accounts that QuickBooks put so
that it will not clutter up our chart of accounts for example let's click on retained earnings and
notice the button in the bottom left of the chart of accounts window has a pull down arrow where
it gives you the ability to control the items on this chart of accounts list if we choose retained
earnings and we click from the bottom left account delete account it says are you sure when we click
OK that account disappears never to show up again same thing with this other one oh well let's not
let's not delete any others but look what happens here when I click payroll expense and I click
account delete QuickBooks says you're not allowed to delete this account this is something based
on the functionality of QuickBooks and it has nothing to do with being a landlord or keeping
records or books and records with landlords so if you do not have payroll expense in your case that
your alternative is to make the account inactive and it's done exactly the same way and it's very
simple you choose the account that you don't want to see your list because it will clutter up the
list with irrelevant accounts so you choose it and then from the bottom left you click account make
account inactive now notice it disappears now you may well ask what is the difference between making
an account inactive and deleting an account well if the accounts inactive you could always come
back here and you could oh well actually instead of actually coming back here you could click this
button include inactive accounts and now you will see the entire list of every account where an ex
shows up only next to the accounts that have been that have been made inactive and if you want to
reactivate the account very simple click on it go to the bottom left and choose make account
active again notice the ex disappears and if you remove the check mark here you can see that now
all of the active accounts are showing up on the list now what we're going to do step by step is
actually add the accounts that we need now these are general accounts that would be for almost any
business not specific to landlords the video that follows this one will show you and discuss the
accounts that are specific to landlords but let's just take a look at what the account list should
be before we get to the accounts that are specific to landlords you may notice that each account that
we're about to put on the list has both a name and an account type the name is simply whatever
you would like to choose to put so that you can look at it and see what account this is or what
the name of it is so the name is really for you and exactly how you type it in here is exactly
how it will show up in the trial balance when it shows you the total of that particular account but
the account type is something that QuickBooks uses to determine the function reality for example Bank
type the first account we chose was Chase Bank we put that in ourselves and we also told QuickBooks
that that was a bank type of account excuse me by telling QuickBooks that these words are associated
with a bank type of account QuickBooks knows that when we write checks this is one of the accounts
that will decrease if it's coming from this bank account or if we make deposit this rather
than the others is the account that will increase when we deposit money into it so we have to tell
QuickBooks what type of account it is so that QuickBooks will know how it will function and
where it belongs on the reports you can watch the video of account types and a deeper explanation
of account types in the future but for now just put the exact name and the exact type that's on
this list and you can learn more about account types later in the course so how do we do that
well it's very simple again from the bottom left we click account new now we already have cash and
Bank as a bank type of account actually does it say Chase Bank actually says Chase Bank so what
we need to do is edit this account click on the account you want to edit go to the bottom left
and click edit account now you can change this to Chase Bank not cash and bank and then when we
click Save and close we now have the new name so we actually learn how to edit an account and that
you could always click on an account and change any name of any account anytime you want as far
as changing account type there are only certain types you can change but you'll cross that bridge
when you come to it what we now want to do is add the rest of the accounts for example PayPal PayPal
is a bank type of account the the customers deposit money into it and you can pay from it
and that's why you choose Bank type of account for PayPal from the bottom left click account new make
sure you choose Bank as the type of the account now when you click Bank QuickBooks gives you a
little explanation about what that type of account is supposed to be for and how it should behave but
again you could read up on that later for now click continue and in this second window here
you can see that account type is already chosen as Bank you can choose a different account that this
different type at this moment but let's leave it for now and type in PayPal now instead of clicking
Save and close and reopening that other window and then coming back to this window it would save you
time if you just click Save and new now if you're putting in a whole list of accounts which we are
you can go to the next account on the list and put in the name and put in the type in this case it's
account payable is both the name and the type of our fourth account so let's go ahead and put it
in that way account payable as the type and again the name is also accounts payable actually let's
cancel that because I noticed that we already have accounts payable as both the name of the
type so let's go to the next one capital one which is a credit card maybe it's the company
credit card from the bottom left account new we have to choose credit card type of account then
click continue and then we type in Capital One now again we don't want to click Save and close
because then we'll have to reopen that other window you can click Save & new come here then
the next one is Holden's capital and it's equity type of account so we come here we choose equity
type of account always choose the account type first hold and capital okay save and new now the
next one on the list is Holden's withdrawals so we come here and we type in Holden's with crawls
okay then we click Save and new and we can see our actual chart of accounts is starting to look just
like the list now you can go ahead and put in the remaining ones if you want to for example income
slash deposits I'll just put in one more like that again if you're in this window change account type
to income and type in income slash deposits okay now click Save and new now here are the
actual accounts that we will use in the chart of accounts for our quickbooks for contractors course
if you really want to practice what you learned in this video you'll spend time putting in or
editing your existing accounts to make your chart of accounts look exactly like this when you finish