1.3 Chart Of Accounts
This is an official list of account names to be used in recording business transactions based on the kind and nature of the business entity. Below is the Chart of Accounts for the example problem. It is suggested that each QB user use his/her name to specifically identify the reports to be submitted.
| Your Name, M.D. | |||
|---|---|---|---|
| Chart of Accounts | |||
| Year | |||
| ASSETS | |||
| Account No. | Account Names | Type | |
| QuickBooks | GAAP | ||
| 1001 | Cash | Bank | Current Assets |
| 1005 | Petty Cash | Bank | Current Assets |
| 1010 | Accounts Receivable | Accounts Receivable | Current Assets |
| 1015 | Medical Supplies | Other Current Asset | Current Assets |
| 1020 | Office Supplies | Other Current Asset | Current Assets |
| 1025 | Prepaid Insurance | Other Current Asset | Current Assets |
| 1030 | Medical Equipment | Fixed Assets | Fixed Assets |
| 1030.5 | Accumulated Depreciation, Med. Eqpt. | Fixed Assets | Contra Account |
| 1035 | Office Equipment | Fixed Assets | Fixed Assets |
| 1035.5 | Accumulated Depreciation, Off. Eqpt. | Fixed Assets | Contra Account |
| 1040 | Furniture & Fixtures | Fixed Assets | Fixed Assets |
| 1040.5 | Accumulated Depreciation, Furn. & Fixt. | Fixed Assets | Contra Account |
| LIABILITIES | |||
| 2001 | Accounts Payable | Accounts Payable | Current Liabilities |
| 2005 | Wages Payable | Other Current Liability | Current Liabilities |
| 2010 | Unearned Revenue | Other Current Liability | Current Liabilities |
| 2013 | Interest Payable | Other Current Liability | Current Liabilities |
| 2015 | Payroll Liabilities | Other Current Liability | Current Liabilities |
| (Already set up by QB. Do not set up again. Just edit later to include the account number.) | |||
| 2020 | Notes Payable | Long-Term Liability | Long-Term Liabilities |
| OWNER'S EQUITY | |||
| 3001 | Your Name, Capital (QB has set up Owners Equity. Just edit later.) | Equity | Equity |
| 3002 | Your Name, Draw (QB has set up Owners Draw. Just edit later.) | Equity | Equity |
| ** | Opening Bal. Equity | Equity | Clearing Account |
| (Already set up by QB) | |||
| *** | Retained Earnings | Equity | Equity |
| REVENUE OR INCOME | |||
| 4001 | Professional Fees | Income | Revenue or Income |
| 4005 | Interest Income | Other Income | Other Revenue or Other Income |
| EXPENSES | |||
| 5001 | Advertising Expense | Expense | Expense |
| 5005 | Automobile Expense | Expense | Expense |
| 5010 | Bank Service Charges Expense | Expense | Expense |
| 5015 | Depreciation Expense, Med. Eqpt.* | Expense | Expense |
| 5016 | Depreciation Expense, Off. Eqpt.* | Expense | Expense |
| 5017 | Depreciation Expense, Furn. & Fixt.* | Expense | Expense |
| 5020 | Equipment Rental Expense | Expense | Expense |
| 5025 | Insurance Expense* | Expense | Expense |
| 5030 | Licenses & Permits Expense | Expense | Expense |
| 5040 | Postage & Delivery Expense | Expense | Expense |
| 5045 | Rent Expense | Expense | Expense |
| 5050 | Repairs Expense | Expense | Expense |
| 5055 | Supplies Expense - Medical * | Expense | Expense |
| 5060 | Supplies Expense - Office * | Expense | Expense |
| 5065 | Telephone Expense | Expense | Expense |
| 5070 | Utilities Expense | Expense | Expense |
| 5075 | Payroll Expenses | Expense | Expense |
| (Already set up by QB) | |||
| 5080 | Interest Expense | Other Expense | Other Expense |
* These accounts will be discussed in Chapter 3.
** QuickBooks Pro uses the Opening Bal Equity Account as a beginning capital account.
*** QuickBooks Pro uses Retained Earnings account in all types of business organization. Though manual accounting uses Retained Earnings account only in relation to corporations, computerized accounting software uses Retained Earnings in all types of business organization as an accumulated earnings amount carried forward from period to period.
The differences in account classification by QuickBooks versus Generally Accepted Accounting Principles (G.A.A.P.) are the results of the "behind the scene" entries, postings, and links to subsidiary ledgers and reconciliation process that QuickBooks have established to effectively enhance the computerized accounting system.