The structure of accounting

Full use and control of QuickBooks? requires knowledge of the chart of accounts. The description is here as part of a foundation. If you want to jump in quickly, go on to Bank Accounts. This information will be here when you come looking (not if you come looking, but when you do.)

The Chart of Accounts, XE "chart of accounts" in the financial accounting of any entity, is a list or tabulation of the various accounts. We would do well to fine tune our idea of what "account" means. Sales people often refer to a customer as an "account." And there are some other meanings. The focus here is on the meaning in financial accounting. The complete books of account for any entity state the initial value, the magnitude of earnings (or loss,) and the final value. This usually implies so many data that it would be utterly confusing to toss them in all together. An account is a grouping of similar financial data. Like or associated records are collected together. An account is usually presented in a tabular form, with a beginning balance, transactions increasing or decreasing the account, and an ending balance.

In the discussion below, the term graphics versions refers to versions of QuickBooks? for Windows and Macintosh, and excludes DOS versions.

Accounting defines five basic types of accounts:

• Asset
• Liability
• Equity
• Income
• Expense.

The meaning of these was discussed in the "Short Course in Accounting" chapter.