Quickbooks Chart of Accounts - Arbitrary Numbering?

Discussion in 'Accounting Software' started by Robert G. Hoover, Apr 17, 2008.

  1. Are the label Numbers for each account arbitrary in the Chart of
    Accounts? For example, QB provides these by default...

    15000 - Furniture and Equipment
    17000 - Accumulated Depreciation
    24000 - Payroll Liabilities
    25500 - Sales Tax Payable
    30000 - Opening Balance Equity
    ....
    47900 - Sales
    ....
    51100 - Freight and Shipping Costs
    ....
    66000 - Payroll Expenses
    ....
    68100 - Telephone Expenses
    68400 - Travel Expenses
    68600 - Utilities
    80000 - Ask My Accountant
    90000 - Estimates

    Is this a known CPA labeling/numbering convention? Or are these numbers
    completely arbitrary?

    Thanks!

    Rob
     
    Robert G. Hoover, Apr 17, 2008
    #1
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  2. Robert G. Hoover

    erica.asahan Guest

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    =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
    =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D

    These are all arbitrary. You can assign any numbers and description
    that you like. It's for easy entry and G/L purposes, atleast is what I
    know.
     
    erica.asahan, May 2, 2008
    #2
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  3. Robert,

    Numbering for the chart of accounts is relatively arbitrary, whether you are
    using QuickBooks or actual accounting software. Most accounting systems,
    computerized or not, use numbering systems to categorize and differentiate
    expenses, keeping it as simple as possible. The labeling is a description
    of what the numbers contain, at least in real accounting software. With all
    due respect, that does not include QuickBooks, unless you have no concept
    what accounting is.

    When I said the numbering systems are arbitrary, that was based on the
    tradition that there are certain numbering conventions, at least for
    placement of the categories. Within those categories, it is your option to
    be as creative as your company needs, tracking expenses in as much detail or
    as little as is appropriate for your needs. Here are the conventions, to be
    used or ignored, as you prefer:

    10000 Assets (broken down to current and long term, separated by a subtotal
    for current.)
    20000 Liabilities (broken down to current and long term, separated by a
    subtotal again.)
    30000 Equity, with stock, paid in surplus, retained earnings, and year to
    date earnings Or simply owner's equity. These days, the least a business
    needs is to be a limited liability company to protect one's personal assets.
    I don't recommend sole proprietorships unless your business is little more
    than a hobby.
    40000 Income
    50000 Cost of Goods Sold and possibly direct costs of selling, excluding
    employee costs
    60000-80000 Expenses, sometimes listed alphabetically, others by
    direct/indirect, others by any number of schemes, all depending on your
    needs and creativity.
    90000 Interest Expense and Income Taxes

    I have set up charts of accounts for a great number of companies, somewhere
    over 200, including an international multi-company conglomerate using this
    convention. It is simple and it meets the needs of almost everyone. Using
    real accounting software, you can then set up a number of ways of displaying
    the accounts in a number of financial statement formats. For instance, your
    banker may have a preferred format, while your surety bonding company may
    have a different preference. Then, you can set up another version for your
    sales staff, your operations manager, the CPA firm, the tax accountant, the
    president of the company, the board of directors, etc.

    Using what are called master/subsidiary accounts you can summarize for some
    people, while giving others account by account detail. For instance, the
    president may want a financial statement with 15 lines, while the CPA may
    want 90 lines. You can do that by listing Cash as the Master account, with
    say all 9 of your checking accounts, CDs, etc. as Subsidiary accounts. That
    will give the president 1 line for cash, but the CPA can get a statement
    with each one there for separate analysis. This, of course, assumes that
    you are using accounting software that allows for this flexibility. I do.
    It works so well that I can please everyone. I have my preference, and if
    you are interested, I will direct you to where I got my accounting software,
    but only if asked. My goal was to instruct and enlighten you, not to sell
    you on getting real accounting software. Unfortunately, so many
    professionals make so much money by setting up and supporting QuickBooks,
    they have a conflict of interest in recommending accounting software to
    their clientele.

    Good luck,

    AJ
     
    A Nonny Moose, May 4, 2008
    #3
  4. Hi AJ,

    Whew! Thanks for the info. I appreciate the advice and now consider
    myself instructed and enlightened. Good stuff! :)

    Rob
     
    Robert G. Hoover, May 6, 2008
    #4
  5. Robert G. Hoover

    tapirgal Guest

    Hello,

    I am interested in the accounting software you recommend, and I have
    to make a decision right away. Actually, it may be made for me by
    whatever will or will not convert our Quickbooks Premier 2007
    database. We are running out of spaces for new records (names). I've
    used QB since 1996, closed the old DB in 2004 and started a new one
    when I began to learn how to keep records better. I am NOT an
    accountant, but we do need software that will handle inventory and
    sales efficiently. We add about 15 to 30 new customers to the DB per
    day, as we're an online business with fewer repeat customers than
    you'd have with a walk-in only store. I've now purchased both
    Peachtree Quantum and MYOB Premier. Neither one will convert the
    database of nearly 14,500 (the max) customer + vendor records. Both
    purchases are recent and one for sure can be returned. At this point,
    although MYOB is much cheaper, I don't care about the price as much as
    usability now and into the future. We have about 1,500 inventory
    items, and are not a service business. As a nonprofit with a gift
    shop, we do keep donation records, but these are much fewer than our
    sales. Even though QB is not an "accountant's software," I would have
    upgraded to their Enterprise if it could handle unlimited names. It
    will only take 29,000, which is double what we have now. We could pay
    the $3500 or whatever and probably fill it up in 18 months to 2 years.
    Both Peachtree and MYOB have "unlimited" availability for names.

    Thanks for any suggestions.

    Sheryl
     
    tapirgal, May 11, 2008
    #5
  6. Robert G. Hoover

    aliyagreen

    Joined:
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    Hi Did you tried testing Sage. It is better to handle larger data bases.

    Thanks
     
    aliyagreen, May 21, 2008
    #6
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