How To Set Up General Ledger Codes in QuickBooks Desktop

Setting up General Ledger (GL) codes in QuickBooks Desktop involves configuring your Chart of Accounts. This is where you define the accounts used for your business’s financial transactions, and each GL code corresponds to a specific account. Here’s a step-by-step guide on how to set up General Ledger codes in QuickBooks Desktop:

Step 1: Open QuickBooks Desktop
– Launch QuickBooks Desktop and log in with your company file.
– From the Home screen, click on the Lists menu at the top of the screen.
Step 2: Access the Chart of Accounts
– From the Lists menu, select Chart of Accounts. This will open the list of all accounts that have been set up in your QuickBooks company file.
Step 3: Add a New Account
– In the Chart of Accounts window, click the Account button located at the bottom of the window.
– A menu will appear with the option to create a New Account. Select New to start creating a new account with a specific GL code.
Step 4: Set Up Account Information
– provide the following information:

1. Account Type: Choose the type of account you want to create. Account types include:
   • Bank (e.g., checking, savings)
   • Accounts Receivable
   • Accounts Payable
   • Other Current Assets (e.g., inventory)
   • Fixed Assets (e.g., buildings, equipment)
   • Liabilities (e.g., loans, credit lines)
   • Income (e.g., sales revenue)
   • Expenses (e.g., rent, utilities)
2. Name of the Account: Enter a name for the account. For example, if you are creating a GL code for Cash, you might name it “Cash in Bank.”
3. Account Number (Optional): QuickBooks allows you to add account numbers (GL codes). You can assign a specific code for each account. For example:
   • 1000 for Cash
   • 2000 for Accounts Receivable
   • 5000 for Rent Expense
4. To enable the use of account numbers:
   • Click Edit in the Lists menu.
   • Select Preferences.
   • Go to the Accounting section and enable Use account numbers.
   • This will allow you to assign GL codes to each account.
5. Description: You can provide a brief description of the account if needed. For example, “Used for recording daily cash transactions.”
6. Tax-Line Mapping: If the account will be used for tax purposes, QuickBooks may ask you to map it to a tax line item. This step is optional but can be useful for tax reports.
7. Detail Type: Select a detail type that matches the nature of the account. For example, if you’re creating an income account, you might choose “Sales of Product Income.”
8. Opening Balance: If this is an existing account with a balance, you can enter the opening balance. Otherwise, leave it blank.

Step 5: Save the Account
– Once you’ve entered all the information, click Save & Close to save the new GL code/account, or Save & New to create another account.