Chart of Accounts
A chart of accounts (COA) is a collection of categories of accounts that are grouped by nature (revenue, expense etc.) and recorded on a financial statement.
Most organizations will have a chart of accounts agreed to by the Board of Directors or management team, and that was created by a Chartered Accountant or other Financial Advisor.
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 Australia. Each firm designs its 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 your chosen industry.
If the COA window is devoid of accounts after you have completed the setup, there is no need to worry about it. 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 on the left of an account 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 to sites with a predefined chart of accounts.
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.