 QuickBooks Desktop 2023 Change Account Categorization to Other Expense Let's do it within 2-its QuickBooks Desktop 2023 Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitars practice problem which we started up in a prior presentation going through the set of process we do every time maximizing the home page to the gray area noting in the view drop down we got the hide icon bar open windows list checked off open windows open on the left hand side going to the reports drop down company and financial let's open up the profit and loss change the range up top from 010123 to 123123 customize the report fonts and the numbers changing the font on up a bit to 14 okay yes and okay going to the report drop down again company and financial this time the balance sheet customize on the report changing the range 010123 to 123123 and then we'll fonts and number it changing the font on up to 14 okay yes and okay there's the normal set of process we do every time now we're going to be focusing in on the profit and loss we're in the P and L income statement profit and loss we're focusing specifically on the interest expense and we're going to be moving it from the expense category down here to other income and expenses just a recap on why we might want to do that on the income statement the income statement or profit and loss in its simplest form a single step income statement for example would just have income minus expenses two categories but typically in a multiple step income statement we want to add some pit stops along the way for example cost of goods sold having its own category and then gross profit being income minus cost of goods sold because cost of goods sold is so significant and then we have our large category of other expenses basically operating expenses here and that gets us down to the net ordinary income now everything above this point is going to be stuff that we would say is involved in our normal operations would generally be the idea stuff that is not involved in our ordinary operations that we don't expect to be continuing on into the future we might want to put down here as we did with the gain on the sale of investments you'll recall that we had investments in stocks and bonds for example when we sold it we had a gain we don't want to put the gain up here in income because it would have the same impact on the net income but really we would like to have it down here because we're trying to tell ourselves and readers that this isn't part of our normal income we don't expect that to happen in the future now you can have a similar argument there's pros and cons to putting the interest in the expense category because the interest is not really part of our normal operations either if we had the funding in other words if we didn't have to finance with a loan we wouldn't have interest expense it's only there because of the financing so you could argue well you need the financing the interest is going to be somewhat consistent you're going to compare it from month to month so you should keep it in the expense category or you can argue well I don't think it's part of my normal operating expenses if I had the financing and therefore I'm going to put it down here so I can see it separately from my net ordinary income so that's going to be the general idea so now we'll just get into the logistics of how you would move that we could just go into the chart of accounts over here by going to the list drop down and then the chart of accounts and notice we already have something recorded in there and we could still move it and have QuickBooks move all the transactions basically that are hitting that particular account so we're in this expense category down below I'm looking for interest expense that's the one right there that's the one let's edit it by right clicking on it and edit the account so it's under the expense category now the natural thing to do would be to put it into other expenses down below other expenses and let's say okay and see what it does if I go to the profit and loss now it's not in the expense category it's down here into other that means it gives us a net ordinary income before these other items which basically aren't part of our normal operations we've got the gains that we saw before and the interest expense now notice we've got we've got kind of two more categories down here so this adds a lot of added subtotals into our income statement because now we've got one account under other income which has a header the thing and then the total and then one account under other expenses so there might be some accounts that you're that you're going to say uh could could like the gain or loss account if it was unrealized gain or loss could be income it could be increasing net income or it could be decreasing net income so in other words you might say hey look I would rather shorten this up a little bit and maybe only have one one of these two categories instead of two of them basically I would just like it to be other income slash expenses in one category without another subtotal of other income and other expenses so I would like to have income then represented as increases down here so net ordinary income plus the increases minus the decreases right so in other words I could set this expense up expense account up as an other income account which will pull it up to here and record it as a negative and make our income statement a little bit shorter without having to have two subtotal categories let me show you what I mean if we go to the chart of accounts again and I right click on the interest expense and we say we want to edit the account edit the account we can say let's make it other income that seems unnatural because it's an expense account but it's going to be a negative other income account in that category down below so we're going to say yes and so let's go to profit and loss now the double entry accounting system still has to work out it's not like you're going to mess up net income because QuickBooks is going to force the double entry accounting system to work we're still at the same net income but now we've only got this one other category so this subtotal isn't really giving us any more detail other income it's really other income slash expenses income represented with positive numbers expenses with negative numbers and there's our net subtotal so it's a little little little bit off because of the name that it has here as other in this other subcategory but it gives you just one subcategory instead of two down below which is a quite common way to format it and make sure income statement a little less gaudy or a little less long with all the stuff but and you can do that you can have that same principle if you had unearned revenue might go to here any anything that you don't think is going to be repetitive into the future you might want to put down in the other income and expense category because when you do a comparative income statement comparing this month to the following month then you don't want to really be comparing things that you don't think are going to be continuing on into the future that's not going to help you to project into the future and do your budgeting also note that as you move stuff if you move the entire account you can you can imagine doing that that same process in other scenarios if you wanted to you know move an account from you know a short term liability to a long term liability for whatever reason if you had it miscategorized and what not it's possible to do that you want to be careful with it but if it moves the entire account then it should still kind of remain in balance the thing that you want to be other thing you want to be aware of is that the profit and loss accounts are temporary accounts so they're going to they're going to roll in to the balance sheet so if you were to try to change a profit and loss account for example to a balance sheet account that would be a more dramatic move right because a balance sheet account is a permanent account profit loss is a temporary account but if you're moving something within the profit and loss or within the balance sheet then you can you can generally do that if you if you need to but you you know just be you know want to kind of imagine what the consequences would be but generally you should remain basically in balance i'm going to bring it back to where it was so we have right click on this again edit it again i'm i'm going to bring it back to where it's an other expense so now we're going to have an other income and other expense the longer kind of income statement more multiple steps in the multiple step income statement down below there's where we stand let's look at the trial balance as of now hit the drop down and just check our numbers we didn't change any numbers we just adjusted the order of them going from 010123 to 123123 let's customize it up top fonts and the numbers change in the font let's bring it up to 16 this time 16 pour five or okay and then if we go down here then there's the interest expenses down below so you could check your numbers the reason the trial balance puts it down below even though we don't have any subcategories is because the trial balance is still in order by in essence balance sheet on top of income statement it's in order by the order of accounts and so if there's anything off on the chart of accounts you could drill down on it and check it out in that way if it's out of order that's then what we worked on this time because the interest expense if you didn't make the change might be out of order and you can look at your chart of accounts to order the chart of accounts