The Chart of Accounts is a classified list of all the ledger accounts in an organisation. The accounts are usually classified into groups with the headings: Assets, Liabilities, Owner’s Equity, Revenues and Expenses. Each account is usually given a number code within each of these groups.
The numbering system usually permits the addition of new accounts as the need arises. In some countries in Europe, the numbering systems are so standardised that a particular account will have the same number in every firm of that kind in the country. This is not the case in the United States or in Australia. Each firm designs its own chart of accounts to suit its own particular needs.
Using the QuickBooks Chart of Accounts
If you have opted to work without an accountant, Quickbooks tries to help you do the right things accounting-wise. If you set up the QuickBooks for the first time, it selects the typical COA based on the industry you choose.
If the COA window is devoid of accounts after you have completed the setup, there is no need to worry about. At the bottom of the Chart of Accounts window (press Ctrl+A) to open it, turn on the ‘include inactive’ checkbox. If an X appears the left of an account that you want to use, click the X to reactivate the account.
With your QuickBooks chart of accounts in place, you can add more accounts, hide accounts you don’t need or edit the accounts on the list.
Importing a Chart of Accounts (COA)
If you don’t like the COA that QuickBooks delivers, how about one built by experts and available at no charge? A quick Google search on QuickBooks Chart of Accounts will fetch you a link of sites with a predefined chart of accounts. For example A COA for the construction industry is available at no charge from www.powertoolssoftware.com.
Overall, it makes the summary of accounts readable and easy to understand more or less like a Trial Balance. Accountants should be careful while preparing it.