Chart Of Accounts For Rental Property In Quickbooks

Introduction

Quickbooks is a popular accounting software used by small businesses and rental property owners. It helps in managing finances, generating reports, and tracking expenses. One of the important features of Quickbooks is the Chart of Accounts. In this article, we will discuss the Chart of Accounts for rental property in Quickbooks.

What is the Chart of Accounts?

The Chart of Accounts is a list of all the accounts used in a business to record financial transactions. It is the backbone of the accounting system and helps in organizing and tracking financial data. The Chart of Accounts in Quickbooks is divided into different categories such as assets, liabilities, equity, income, and expenses.

Setting up the Chart of Accounts for Rental Property in Quickbooks

Setting up the Chart of Accounts for rental property in Quickbooks is a crucial step in managing finances. Here are the steps to set up the Chart of Accounts for rental property:

Create a new company file in Quickbooks.
Go to the Lists menu and select Chart of Accounts.
Click on New Account and select the account type as Rental Property.
Enter the name of the rental property in the Account Name field.
Enter the address of the rental property in the Description field.
Enter the purchase price of the rental property in the Original Cost field.
Enter the date of purchase in the Date field.
Enter the current market value of the rental property in the Current Value field.
Click on Save to create the rental property account.

Categories in the Chart of Accounts for Rental Property

The Chart of Accounts for rental property in Quickbooks consists of different categories. Here are the categories and accounts used in the Chart of Accounts for rental property:

Related Chart

Assets

Building - This account is used to record the purchase price, improvements, and depreciation of the rental property building.
Land - This account is used to record the purchase price and appreciation of the rental property land.
Depreciation - This account is used to record the depreciation of the rental property building and other assets.
Security Deposit - This account is used to record the security deposit paid by tenants.

Liabilities

Mortgage Payable - This account is used to record the mortgage loan taken to purchase the rental property.
Property Taxes Payable - This account is used to record the property taxes due on the rental property.
Insurance Payable - This account is used to record the insurance premium due on the rental property.

Equity

Owner's Equity - This account is used to record the owner's investment in the rental property.
Retained Earnings - This account is used to record the profits earned from the rental property.

Income

Rent Income - This account is used to record the rent earned from the rental property.
Late Fees - This account is used to record the late fees charged to tenants.
Other Income - This account is used to record any other income earned from the rental property such as laundry income or parking income.

Expenses

Maintenance and Repairs - This account is used to record the expenses incurred for maintenance and repairs of the rental property.
Property Management Fees - This account is used to record the fees paid to property management companies.
Utilities - This account is used to record the expenses incurred for utilities such as electricity and water.
Property Taxes - This account is used to record the property taxes paid on the rental property.
Insurance - This account is used to record the insurance premium paid for the rental property.
Mortgage Interest - This account is used to record the interest paid on the mortgage loan.
Depreciation - This account is used to record the depreciation of the rental property building and other assets.

Benefits of using Chart of Accounts for Rental Property in Quickbooks

Using the Chart of Accounts for rental property in Quickbooks has several benefits:

Organizes financial data - The Chart of Accounts helps in organizing financial data related to rental property.
Tracks expenses - The Chart of Accounts helps in tracking expenses related to rental property such as property taxes and maintenance costs.
Generates reports - Quickbooks generates reports based on the data entered in the Chart of Accounts.
Manages cash flow - The Chart of Accounts helps in managing cash flow and making informed financial decisions.

Conclusion

Setting up the Chart of Accounts for rental property in Quickbooks is an important step in managing finances. It helps in organizing and tracking financial data related to rental property. The Chart of Accounts consists of different categories such as assets, liabilities, equity, income, and expenses. Using the Chart of Accounts in Quickbooks has several benefits such as organizing financial data, tracking expenses, generating reports, and managing cash flow.