Home > Articles > Home & Office Computing > Other Applications

This chapter is from the book

This chapter is from the book

Finding and Fixing Chart of Account Errors

When searching for reasons why your financial statements do not appear correctly, the first place to look is often the chart of accounts. It is also important to carefully consider the impact of the change on your financials and make sure you choose the right method for correction.

There are many ways to resolve errors found on the chart of accounts. However, before attempting any of the suggested methods here, you should consider the following:

  • The effect the change could have on prior-period financials
  • The effect the change could have on previously recorded transactions
  • The impact the changes would have on the records your accountant has kept for the company

A quick review of the chart of accounts should include the following:

  • Duplicated accounts
  • Unnecessary accounts (too much detail)
  • Accounts placed in the wrong account type category
  • Misplaced subaccounts

QuickBooks Required Accounts

The chart of accounts listed here is required for specific functionality of a transaction. If you have previously removed the account, QuickBooks re-creates it when you use a transaction that depends on that specific account. Additionally, these accounts are automatically created when a related transaction is opened for the first time:

  • Accounts Receivable
  • Inventory Asset
  • Undeposited Funds
  • Accounts Payable
  • Payroll Liabilities
  • Sales Tax Payable
  • Opening Balance Equity
  • Retained Earnings
  • Cost of Goods Sold
  • Payroll Expenses
  • Estimates (nonposting)
  • Purchase Orders (nonposting)

Making an Account Inactive

Marking an account inactive is usually the best choice when you have duplicate or extra list entries on your chart of accounts. Making an account inactive removes it from any drop-down list where the item can be selected. However, for reporting periods where the account has a value, any reports generated will include the inactive account balance.

Do you need to mark several accounts as inactive? Select the Include Inactive checkbox at the bottom of the chart of accounts list, as shown in Figure 4.13. You can mark any list items you want to become inactive by clicking in front of the list item name. If Include Inactive is grayed out, right-click an account and choose Make Account Inactive. You will now have the option to place a checkmark in the Include Inactive box.

In the future, if you try to use an inactive account, QuickBooks prompts you to choose between Use It Once or Make It Active.

Merging Duplicated Accounts

Another method to remove duplicated accounts is to merge the similar accounts. To perform a chart of accounts merge, both accounts must be in the same chart of accounts category; in other words, you cannot merge an Asset with a Liability-type account.

Before merging accounts, perform a backup of your data, just in case the result is not what you expected. When the accounts are merged, all transactions previously assigned to the removed account now appear as if they were always assigned to the remaining account.

To merge two accounts, follow these steps:

  1. From the menu bar select Lists, Chart of Accounts, and highlight the account you want to remove with the merge. With the account highlighted, press Ctrl+E on your keyboard to open the Edit Account dialog box.
  2. If you are using account numbering, replace the account number with the account number for the account you want to retain. Optionally, you can type the exact spelling of the name of the other account you are merging with this one into the Account Name field.

    QuickBooks cautions you that the name is already being used and asks whether you want to continue (see Figure 4.19). If you do not get this message, you didn’t accurately type the name or account number. You need to try again.

  3. Click Yes to merge the accounts.
    Figure 4.18

    Figure 4.18. Easily mark accounts inactive from the Chart of Accounts dialog box.

    Figure 4.19

    Figure 4.19. QuickBooks offers a word of caution when you are merging two charts of accounts lists.

Modifying an Account in the Chart of Accounts

The mistake most often made when creating your own chart of accounts is assigning the wrong account type. QuickBooks provides additional subcategories under the six standard accounting categories, as identified in the “Account Types” section at the beginning of this chapter.

The Add New Account dialog box, previously shown in Figure 4.1, can help you reduce errors that occur when creating a new account. When you select an account type, QuickBooks provides a general description of the proper use of the selected account.

Changing an account type can also be advantageous when you want to fix future transactions and prior-period transactions. For example, suppose you created a Current Asset account type instead of the correct Expense account type. Simply changing the account type via the Edit Account dialog box (see the following steps) corrects all prior-period and future transactions to be assigned to the new account type.

However, you will not be able to change an account type or merge a chart of an account if subaccounts are associated with that chart of account list item. For more information, refer to the note on page 131.

To change an account type, follow these steps:

  1. From the menu bar select Lists, Chart of Accounts (or press Ctrl+A). The Chart of Accounts dialog box displays.
  2. Select the account for which you want to change the type.
  3. From the Account drop-down list, select Edit Account (or press Ctrl+E to open the account for editing). The Edit Account dialog box displays.
  4. Click the drop-down arrow next to Account Type (see Figure 4.20) and choose a new account type from the list.
    Figure 4.20

    Figure 4.20. You can usually, but not always, change an account type.

  5. Click Save & Close.

Assigning or Removing a Subaccount Relationship

Often in accounting reports, you have specific accounts for which you want to see a more detailed breakdown of the costs. You can get this breakdown easily by creating the main account and associating subaccounts with the main account.

Figure 4.21 shows Utilities as a main account with an indented subaccount for each type of utility expense.

Figure 4.21

Figure 4.21. Chart of Accounts showing a subaccount relationship to parent account.

To edit an existing account to be a subaccount of another main account, follow these steps:

  1. From the menu bar select Lists, Chart of Accounts (or press Ctrl+A). The Chart of Accounts dialog box displays.
  2. Select the account that you want to be a subaccount of another account.
  3. From the Account drop-down list, select Edit Account (or press Ctrl+E to open the account for editing). The Edit Account dialog box displays.
  4. Select the Subaccount Of checkbox and choose the account you want it to be associated with from the drop-down box. (It must be of the same account type.)
  5. Click Save & Close.

Users can assign a subaccount that is only in the same general account type. For example, an Expense type cannot be a subaccount of a Current Asset type account (see Figure 4.22).

Figure 4.22

Figure 4.22. Assigning a subaccount to a parent account.

Another method for changing the assignment of a subaccount to a main account is easily done directly from the list view.

To remove or add a subaccount directly from the list, follow these steps:

  1. In the Chart of Accounts dialog box, click with your cursor over the diamond in front of the list item (see Figure 4.23).
    Figure 4.23

    Figure 4.23. Dragging the diamond in front of an account is an easy way to change the subaccount relationship within the same category type.

  2. Drag the diamond so the selected account is immediately below the main account grouping.
  3. Drag the diamond to the right to create a subaccount-account relationship to the main account. Or optionally, drag the diamond to the left to remove the subaccount relationship.

    The chart of accounts list shows the corrected relationship (see Figure 4.24).

    Figure 4.24

    Figure 4.24. The chart of accounts viewed after changing the subaccount relationship.

Financial reporting is more accurate when you take the time to review and correct your chart of accounts setup. Often, you can manage the information better when you group similar income or expense accounts using the subaccount feature.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020