and now we will learn how landlords would manage their chart of accounts
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 one 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 you will need other accounts as well but we'll address them in the course as they come
up the chart of accounts allows you to delete edit and add all the accounts in the chart of
accounts window and I'm going to show you each of these actions one by one so first we'll talk
about deleting an account now in order to open the chart of accounts window we go to the main
menu and click lists and the very top list is the chart of accounts if we make the window a
little wider you notice that QuickBooks already put some accounts in the chart of accounts for us
now mind you your chart of accounts might not look the same if you did not click other none
when you set up the file you might have a full chart of accounts because you accidentally chose
a sample chart of accounts instead of clicking other none if you clicked other none you might
have very few like we have here but they might be slightly different just keep in mind that I'm only
going to delete this one or show an example of how to delete this very top one so if you have
accounts receivable and you want to follow along step-by-step will only delete this one but I can
tell you all these others we're going to use some of which I'm going to demonstrate with now
so just to show you how to delete an account I'm going to click the top one where it says accounts
receivable then at the moment that particular account is selected I go to the bottom left and
click account delete account then I click OK and that account is gone forever ok now what
about making an account inactive what does that mean well sometimes we can't physically delete
an account for example if you already recorded a transaction in a particular account and you did
not delete that transaction and that account still has transactions recorded in it QuickBooks will
not let you delete that account it will also not let you delete these two payroll related
accounts that QuickBooks automatically puts even though we're not using QuickBooks for payroll
so for something like this if I click payroll liabilities and I click account delete it doesn't
let me because it's connected to something related to payroll same thing with this payroll expenses
click on it account delete it won't let you do it so the only way to remove accounts from your
list in order to not let your account list get cluttered up is to make them inactive click on
the account you wish to make inactive go to the bottom left and click make account inactive now
it looked like it disappeared but it really didn't let's try it again with the payroll expense click
on it account make account inactive now it seems like it's gone forever but we simply removed it so
it didn't clutter up the list well what if we want to see the accounts are inactive or even bring
them back no problem we can click this little button here to say include inactive accounts and
notice when I click the check mark here the other two show up but they have an X next to them that
indicates that they are still inactive we could always right click or click on the bottom left
and click make account active and the X goes away this way when we remove the check mark you can see
they're still there when we're not including inactive accounts so it's the same thing with
this one as well but I'm going to keep this inactive because I don't want payroll accounts
cluttering up our list and then I will remove the check mark here and finally we're going to
add accounts to the chart of accounts 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 and account type for each of
the accounts that we're 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 so here we are again with the names and the types and we're going to
put these on the list one by one again we could reopen the chart of accounts from the main menu
list chart of accounts and again the bottom left button of every list window controls the list so
we click account new now the first account is a bank type of account then we click continue
and then with the cap locks on we type in cash in bank cash in bank ok notice by the way if we
click the pull down here we get every possible account type so that previous window we saw a
second ago before we came here that's only for the first one if you're putting on a list if we click
Save and new notice the account shows up here as the name that we typed as well as the type and
then the window is waiting for us to put in the next one if you accidentally close the window and
you reopen it account new you would then have to choose the type over here again before getting to
the other window I guess the next one is unearned rental income and the type is accounts receivable
so we can come down here and click account a poll that's another way of designating the account type
and then click continue and then type it in here with capital letters accounts receivable I suggest
you click Save and new because that will clear the screen and keep the window open so that you could
type in the next one but when you click Save a new notice it got added to the list with the correct
name and type let's do the next one Holden's investment and that's an equity type of account so
we go down to where it says equity and we type in Holden's investment ok save and new go to the next
one go to the next one its holdings withdrawals ok and it's an equity type of account holdings
withdrawals save and new what's the next one I think you get the idea skip the ones
that QuickBooks already put there the ones in lower case income from late fees well we need
that because we have to track all the money we earn specifically from late fees so we
choose income type of account and we type in income from late fees and then we click Save
and new then we come here type in in rental income earned which is a separate record of
income that should be tracked separately but it's also an income type of account so we type
in rent owe income earned save and new this way the top of our profit and loss will show us the
income both from late fees and normal rent and then our profit and loss will subtract out each
of these expenses so the first one is cleaning expense so we change this to expense type and
we type in cleaning expense save and new what's the next one the next one is delivery expense
save and new and so on I suggest that you pause the video and you finish putting in
all the expenses after delivery expense I'm going to pause the video and put congratulations you've
finished putting in the chart of accounts that we will use for the rest of the course