A: The Chart of Accounts is the backbone of your accounting system. That is why it is so important to set up the Chart of Accounts correctly. QuickBooks categorizes accounts as:

• Assets: things your company owns
• Liabilities: money your company owes
• Equity/Capital: depends on entity type but it is used to track money invested into the company and drawn out of the company
• Income: money earned from day-to-day business tasks
• Cost of Goods Sold: Tracks the direct costs of your business’s goods or services
• Expenses: fixed costs or overhead costs

If you are creating a new Company file, select Property Management or Home Owner Association or Rental as your industry. It will customize your income and expense accounts for you.

Open the Chart of Accounts list (Ctrl + A) and add a new account. Select the Account Type and enter the account name and information.

If you would like to add to your existing Company file’s Chart of Accounts, use the following partial real estate chart of accounts for rental and property management from our guide Manage Properties with QuickBooks:

Type – - – - Account
Bank – Checking
Bank – Savings
Bank – Security Deposit
Cost of Goods Sold – Advertising
Cost of Goods Sold – Capital Improvement
Cost of Goods Sold – Lease Commissions
Cost of Goods Sold – Credit Check
Cost of Goods Sold – Landscaping and Groundskeeping
Cost of Goods Sold – Property Management Fees
Cost of Goods Sold – Repairs and Maintenance
Equity – Capital Stock
Equity – Opening Balance Equity
Equity – Retained Earnings
Equity – Shareholder Distributions
Expense – Education & Training
Expense – Parking & Tolls
Expense – Automobile Expense
Expense – Bank Service Fees
Expense – Computer and Internet Expenses
Expense – Depreciation Expense
Expense – Dues & Subscription
Expense – Equipment Rental
Expense – Insurance Expense
Expense – Interest Expense
Expense – Meals and Entertainment
Expense – Office Supplies
Expense – Payroll Expenses
Expense – Payroll Expenses:Gross Payroll
Expense – Payroll Expenses:Payroll Taxes
Expense – Postage and Delivery
Expense – Printing & Reproduction
Expense – Professional Fees
Expense – Rent Expense
Expense – Small Tools and Equipment
Expense – Telephone Expense
Expense – Travel
Expense – Utilities
Fixed Asset – Accumulated Depreciation
Fixed Asset – Furniture and Equipment
Income – Application Fees
Income – Late Charges
Income – Reimbursed Expenses
Income – Rent
Other Current Asset – Vendor Deposits
Other Current Liability – Last Month Rent
Other Current Liability – Payroll Liabilities
Other Current Liability – Reserve Fund
Other Current Liability – Tenant Security Deposits Held
Other Expense – Ask My Accountant