When you use the EasyStep Interview to create a new QuickBooks company file, you will be asked questions about the type of business you own as it walks you through the process of setting up your business in QuickBooks. Your answers will be used to help you get started quickly , by setting up the appropriate accounts and lists. It will take you about 30 minutes to go through the EasyStep Interview.
Creating a new company file in QuickBooks is easy and you can access the new file wizard in many ways.
Any of these actions will launch the EasyStep Interview, which will walk you through the creation of you new company data file by asking you a series of questions about the type of business you own. It uses your answers to get you started quickly, by setting up the appropriate accounts and lists.
The following is a list of the accounts that QuickBooks creates automatically, if you selected the Construction General Contractor business type in the EasyStep Interview and indicated that your company is an S-Corporation.
- Accounts Receivable – Created during the EasyStep Interview, or the first time you create an invoice.
- Inventory Asset – When the first inventory item is created in a company data file, QuickBooks creates the Inventory Asset account.
- Construction in Progress – Automatically creates this Other Current Asset account when you select the Construction General Contractor business type in Step 2 of the EasyStep Interview. While the account is automatically created, QuickBooks does not have a built-in or automatic method of tracking Construction in Progress.
- Retainage Receivable – This account is created when you select the Construction General Contractor business type in Step 2 of the EasyStep Interview. While the account is automatically created, QuickBooks does not have a built-in or automatic method of tracking Retainage Receivable.
- Undeposited Funds – An Other Current Asset account used to you record a payment from an invoice or a sales receipt. QuickBooks uses this account to hold money you’ve collected until you deposit it in a bank account.
- Accumulated Depreciation – A Fixed Asset account used to hold depreciation information that relates to furniture, fixtures, and equipment that your company owns.
- Furniture and Equipment – A Fixed Asset used to hold information about the furniture, fixtures and equipment your company owns.
- Accounts Payable – Used to hold information about how much money you owe your vendors and subcontractors.
- *Payroll Liabilities – QuickBooks adds this account to the chart of accounts automatically when you turn on the payroll feature in a company file. QuickBooks initially maps all payroll items that create liabilities to this account.
- Sales Tax Payable – Tracks sales tax that you have charge to your customers and owe to the government; it’s created when you turn on the sales tax feature or you indicate that you charge sales tax in Step 10 of the EasyStep Interview.
- Capital Stock – This Equity account is automatically created based on the options you selected in the Step 3 of EasyStep Interview.
- Opening Bal Equity – This account is created the first time you enter the opening balance for a balance sheet account. Every time you add a new account with an opening balance, QuickBooks records the second half of the entry in the Opening Bal Equity account. This means that total equity is the net balance of the assets minus the liabilities entered into QuickBooks. Once you’ve entered all of the accounts and balances, you may use a journal entry to allocate Opening Balance Equity to the proper equity accounts. Consult your accountant for help with this.
- Retained Earnings – This account is unique because there is no register associated with it. Each time you run a balance sheet, you assign the date of the report. QuickBooks then calculates the net income from all transactions from the earliest date in the company file to the end of the fiscal year prior to the current year. QuickBooks displays the results as retained earnings. Because of this feature, you don’t need to make the traditional closing entries at the end of the year.
- Shareholder Distributions – This Equity account is automatically created based on the options you selected in the Step 3 of the EasyStep Interview.
- Uncategorized Income – This account is used the first time you enter an opening balance for a customer directly into the customer record.
- **Cost of Goods Sold (COGS) – When the inventory feature is turned on and the first inventory item is created in a company file, the Cost of Good Sold (COGS) account is created. When you choose the Construction General Contractor business type in Step 2 of the EasyStep Interview, several individual Cost of Goods Sold accounts are created – Blueprints and Reproduction, Bond Expense, Construction Materials Costs, Equipment Rental for Jobs, Other Construction Costs, Subcontractors Expense, Tools and Small Equipment, and Worker’s Compensation Insurance.
- Expenses – When you choose the Construction General Contractor business type in Step 2 of the EasyStep Interview, several expense accounts are automatically created that might be useful in your business – Auto and Truck Expenses, Bank Service Charges, Business Licenses and Permits, Depreciation Expense, Insurance Expense, Interest Expense, Meals and Entertainment, Office Supplies, Professional Fees, Rent Expense, Repairs and Maintenance, Telephone Expense, and Utilities.
- *Payroll Expenses – This account is created when you turn on payroll in a company data file. All payroll expense items are initially mapped to this account.
- Uncategorized Expenses – Created the first time you enter an opening balance for a vendor from within the actual Vendor record.
- Reconciliation Discrepancies – An expense account used when you enter an adjustment to reconcile small accounting discrepancies, it is used to track all reconciliation differences.
- Ask My Accountant – QuickBooks automatically creates this Other Expense account, which is used to hold transactions that you aren’t quite sure how to classify. When you use this account, make sure that you use the memo field of the transaction to hold details that will help your accountant correctly classify the transaction – don’t rely on your memory.
- Estimates – creates this account for you to hold information about estimates or bids that you’ve created for various customers. This is a non-posting account that does not affect your balance sheet or income statement.
- Purchase Orders – created the first time you issue a purchase order to a vendor/subcontractor. This is a non-posting account that does not affect your balance sheet or income statement.
* A single Payroll Liabilities and Payroll Expenses account can be very limiting; subaccounts should be created for each type of payroll liability and expense.
** Rather than several individual Cost of Goods Sold Accounts; create a “Parent” account and make the individual accounts “subaccounts”.
Other Chart of Account blog articles:
- Understanding Your Chart of Accounts
- Using Account Numbers in your QuickBooks Chart of Accounts
- The Chart of Accounts and it’s Many Uses in your business
- Modifying & Working with your Chart of Accounts