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quickbooks accounts setup? help.
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Flagship
Posted 2/10/2018 14:29 (#6568376 - in reply to #6568229)
Subject: RE: quickbooks accounts setup? help.


Yes, you can change the account type of Other Income/Expense accounts to Equity, and vice versa. Would be a good idea to review the transactions after you do, to make sure they still do what you want, but there shouldn't be any surprises or problems.

As for which account type to use, as I said, in a sole proprietorship it doesn't matter all that much--it really boils down to where you want to see the nonfarm stuff:  on Profit and Loss reports (Other Income/Expense) or the Balance Sheet (Equity). I personally prefer equity because it's easy for me to keep straight in my head what is going on:  personal income deposited in the farm checking account = capital (equity) addition, and so on.

By the way, I make all of my farm-to/from-nonfarm equity accounts subaccounts of one parent account, so that when I prepare a balance sheet report I can collapse that section. (No one outside of the family needs or wants to see those personal spending and income details.)

> ...bought the quickbooks the missing manual book 2 years ago, but so much information in it that it is hard to find just what information that i need...

Yeah, and nearly all of it is oriented toward small businesses using accrual accounting, with no examples involving corn, soybeans, or beef cows. There are a lot of features in QuickBooks (the desktop editions especially) that farms and ranches can benefit from greatly--without requiring a degree in accounting--if people can have the accounting terminology (debits, credits, sales orders, invoices, sales receipts, etc., etc.) boiled down into visual, step-by-step examples based on common agricultural transactions (grain sales, raised and resale livestock sales, cash forward contracts, storage locations, etc.). From the beginning, that has been my goal in writing the entire QuickBooks Farm Accounting Cookbook series. (This winter I'm working on Volume III; should be out this spring.)

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