How to Set up Bank and Credit Card accounts in QuickBooks Desktop

In this tutorial, we will learn whether how to setup bank and credit card accounts in quickbooks desktop.

So, to add bank and credit card accounts, go to the chart of accounts and click on “Account” button and select “New” and since we are adding a bank account just select Bank option here and click on continue. It really depends on you whether what you want to name it but what I prefer is to add your Bank name Abbreviation first and then write the type of bank account whether its checking or saving and then add a couple of last digits of your bank account. In this way, it will be quite convenient to distinguished if you have many bank accounts and the doubts of adding transactions to a wrong bank account will also decrease.

Tutorial Instructions:

 

 

Well, the rest of the fields are optional and you can click on the save & close button to create your bank account right away but its better to write the name of your bank and the type of your bank account in the description and if you want you can add your bank account and routing numbers too and for the sake of example i am putting some random numbers. And, For tax line mapping, If you don’t know what to select, just leave it as it is and your accountant or tax professional will help you with that.

Moreover, another option for assigning account numbers show up here if you have activated that feature in your quickbooks and if you haven’t, just select “Preferences” under Edit menu and in the “Accounting” section, check this “check box” under “company preferences” tab and here you can assign an account number to this account and The sequence of assigning account numbers in QuickBooks has been provided in the description.

And you can add the opening balance of this bank account by clicking on this option, just add your amount and select a date

And you can set a reminder for ordering checks by putting your limit here whenever you will hit that limit quickbooks will remind you that you are running out of your checks and you can also select this option for printing your checks.

And instead of clicking on save & close button, I am going to click on save & new button as I also want to create a Credit Card account, here, its letting you know that the added date is more than 90 days old, its just a message you will receive every-time when you add a transection older than 90 days. Anyhow, just click on yes to let the system know that you know that.

Now your bank account has been created and to create credit card account, just change the account type from bank to “credit card” and then fill the fields and then click on “Save & Close” if you don’t want to setup more accounts, here its just asking if you want to attach your quickbook bank account to your online banking and if you want, just click on Yes and it will start the process otherwise just, click on No.

And here, your bank and credit card accounts have been created. Moreover, you can see that the quickbooks has also shown an equal amount of balance on equity which means that its a liability of business towards its owners, its because that the amount you added to your bank account is your investment into your own business and its happening because of the accounting concept named “separate entity” which means that the business activities should be recorded separately from the personal affairs of the owner or owners. So, in a way equity tells that how much a business owes to its owners.

 

The sequence of assigning account numbers in QuickBooks:

10000 to 19999 = Assets

20000 to 29999 = Liabilities

30000 to 39999 = Equity or Capital

40000 to 49999 = Income or Revenue

50000 to 59999 = Cost of Goods Sold, Job Costs, or Project Costs

60000 to 69999 = Expenses or Overhead Costs

70000 to 79999 = Other Income

80000 to 89999 = Other Expenses

90000 to 99999 = Non-Posting