All of our accounting is based on the chart of account. when we start a business the most important thing to do is to maintain our records. It is important because we have to check and maintain our expenses, and what is the profit we gain from our business.
What is the role of the account?
The company maintains its operations according to the accounts. Purchase of air conditioner for your office adds to an asset account and payment of utility bills adds to an expense account. inventory maintain stocks.So, all these accounts create a list known as COA.
How does it work? (Chart of Account)
It combines all the accounts and create a list. It create specific numbers. Because it avoids mixing of accounts. These numbered schemes are known as COA. In Quickbooks core of your accounting system is COA.
How it is created?
During selection of company file in QuickBooks, it automatically create a account for us. We can also add or delete an account from it.
Similarly, all of your reports are based on these accounts. That is why you should maintain it according to your requirement. these learning for the Quickbooks and the chart for the following video.