welcome to the very last video regarding the setup of minimum QuickBooks we will now put in
the remaining chart of accounts we need one income account to record all the money that
comes in remember the IRS does not require that you categorize your income sources it's enough
just to know the total that came in we could call it income or deposits or income / deposits as long
as we understand this account represents all the money that we earned as income we open the chart
of accounts from the icon bar from the bottom left click account new now obviously the type
of account that this account will be is income then we click continue and we notice income is
the category or the type of account that's chosen now the name can be income / deposits okay it
should be cap lakhs to make it look nicer income / deposits and then of course save and close and now
we have an account in the chart of accounts that we will record every single transaction where we
earned income and it was deposited into one of our bank accounts and now we're going to add to equity
accounts to the chart of accounts an account that is account type equity means that this
is an account that records transactions between the business and the business owner for example
the first account we will put is called Holden's capital we will record in Holden's capital any
money that Holden takes from his personal funds that he uses for business so anytime he takes
money from his personal bank account and pays a business expense that gets recorded as a plus
to Holden's capital anytime he takes money from his wallet that was not designated as petty cash
for the business and he pays that money from his personal funds that gets recorded into Holden's
capital the other account is the exact opposite Holden's withdrawals is an account we will put
in the chart of accounts that records every transaction where Holden spends money from
the business account for non-business reasons from the bottom left of the chart of accounts
window click account new this time the account type will be equity then click continue and make
sure that equity is still chosen as account type click an account name field and type in Holden's
capital now click Save and new notice the equity type is still there and we type in hold ends with
drawls click Save and close and now we have our two equity types for transactions where
Holden puts money into the business or Holden takes money out of the business you will need
at least one asset account you will need at least one account when you record purchases for assets
when you pay for an asset that means something of value that you will have for more than one year
you will have to make sure that your accountant knows about any new asset purchase that you made
during the year so every time you pay money from your bank account or credit card account or any
other account to buy an asset you will have to make sure that they all get recorded into this
one ascetic this way your accountant can go through the asset account very carefully and
look at each purchase to know what to do when he or she files your taxes from the bottom left
of the chart of accounts click account new this time the account type is not on the list of the
radio buttons you could just click other account type and get a list of all the account types and
in this case you should choose fixed assets okay if it should be on the list other asset I guess
you could choose other asset I don't know why fixed asset is not on the list but you
could click OK let me see is it on this list yes fixed asset so I think fixed asset should be the
account type if you're not sure you can leave it as other asset but the name should be asset so it
doesn't really matter if it's other asset or fixed asset as long as your accountant knows that every
single time you purchased an asset you recorded that transaction into this account when I click
Save and close we now have asset in the list of accounts and the chart of accounts and that will
record every new asset purchase that you made during this fiscal year it's very important to
have one last account in your chart of account called ask my accountant this would be for any
transaction that you're not absolutely sure of and you don't know exactly what category
the transaction should go into you can make it an expense type of account because more than likely
most of these will be different types of expense that you're spending money on once again from the
bottom left click account new we should make it expense type of account but it probably does not
matter because any transaction that we're not sure of will go into this account ask my accountant
and of course they will have to go through it one transaction at a time and recategorize everything
before he or she does your taxes click save and close congratulations your file is now completely
set up and you are ready to start recording the transactions in the following videos