When you go into your Chart of Accounts, you may notice that some of the accounts have an asterisk next to them. Why is that?
When you first start up your QuickBooks, the first thing that you need to do is setup your Chart of Accounts. Most people will either choose a default listing that QuickBooks offers or they will get a list from their Accountant and manually set it up.
Many people don’t realize that there are a few accounts that QuickBooks will automatically create when you open up a transaction that requires that account.
For example, if you setup your Chart of Accounts manually, one of the accounts you will probably create is “Accounts Receivable.” Here is the glitch. When you go to create your first invoice in QuickBooks software, QB will automatically create the “Accounts Receivable” account. Now, since you had already created that account, QB cannot make it a duplicate so it puts a * before the one that it creates.
How do you fix this? Thankfully, QuickBooks lets you merge accounts. Here are the steps:
1 – MAKE A BACKUP. Once merging is done, it cannot be un-done.
2 – Go into your Chart of Accounts and select the account (the one without the *) and right click and select Edit.
3 – Add a * to the beginning of the account name and click OK. QuickBooks asks if you want to merge the accounts. Click OK.
4 – Once the two accounts are merged, edit the account again to remove the *.
Here is a listing of all the accounts that QuickBooks will automatically create for you when you do the following steps.
~Inventory Asset (Create an Item in your item list with ‘Inventory Part’ as the type)
~Accounts Receivable (Create and Invoice)
~Accounts Payable (Enter a Bill)
~Estimates (Create an Estimate)
~Sales Tax Payable (Turn on Sales Tax preference)
~Purchase Orders (Create a Purchase Order)