How detailed should my Chart of Accounts be vs using a Subsidiary Ledger?
(New York City)
I am setting up the books for a small theatre that runs shows and teaches classes. My question is, what should I assign an account number to for creating the Chart of Accounts?
We teach 11 different types of improv classes (Beg, Intermediate, Expert, etc.). My thought is to have one control account called "Class Revenue" which is captured in the general ledger. And then, have a subsidiary ledger which shows the details of that control account. Meaning, all 11 classes are broken out under the Class Revenue account.
Or, should I assign a separate account number to each class, and have the General Ledger broken down my class name? My concern is that the GL will get too complex if I do that. Similarly, we currently have 8 different shows a week. Like classes, I just wanted to make a control account in the GL labeled "Show Revenue", and then have a subsidiary ledger that shows the detail of which shows brought in what revenue under the Show Revenue account.
My main goal is to keep the GL simple and straight forward for when we create the financial statements. I'm also using Quickbooks Online for all of this, which will hopefully make this process pretty straightforward.
I'm a trained CPA with a Masters in Accounting...but my training is that of an auditor. This is the first time I'm
actually setting up books for a company. So while I have a good understanding of accounting, I just wanted to make sure my thinking was on the right track with setting up control accounts vs not having a subsidiary ledger and assigning everything its own account number.
Thank you so much for your time!!
If you're using QuickBooks, I'd set up a 'title' account for your "Class Revenue" and then set up sub-accounts for each class.
That way you can just print your financials with just the title accounts, or you can print the 'expanded' view and get all the detail.
You will be able to see in each sub-account which shows brought in the most revenue for each month, and year-to-date.
If you want to know which specific show (the 8 shows you put on each week) fares the best, that might be a little too much to get out of your General Ledger.
Do a report that shows revenue by week. You may be able to set up 'customers' for each show, and post your deposits by show, or 'customer'. For instance, set up a customer by the name of Monday Show, Tuesday Show, etc. Deposit your ticket proceeds under that customer. Then when you print out your report of sales by customer, by week, you will see what you're looking for.
Hope that helps!