Understanding your chart of accounts

Every transaction in GBooks Air gets filed under an account. That's really all a "category" is. The full list of accounts is your chart of accounts, and it's the skeleton everything else gets built on. GBooks Air ships with a chart already designed for Canadian small businesses, so most people never touch it — but it's worth understanding the structure, because it makes everything downstream make more sense.

The five account types

Your Profit & Loss comes from the revenue and expense accounts. Assets, liabilities, and equity carry forward instead, and together they describe where the business stands at a given moment.

Why the defaults mirror the T2125

The default expense accounts are deliberately built to match the lines on CRA form T2125 — advertising, meals and entertainment, office expenses, motor vehicle, and so on. If you're a sole proprietor, that means your year-end P&L lines up almost exactly with your tax return, which your accountant will appreciate more than you might expect.

Real double-entry, quietly

Under the hood, GBooks Air is a genuine double-entry system — every transaction posts a debit to one account and a credit to another, and the books always balance as a result. You never have to think in debits and credits day to day; categorizing a bank transaction as "Software" quietly handles both sides for you. But it does matter, because it's what makes your reports something you can actually trust rather than a slightly fancier spreadsheet.

Adding your own accounts

It's worth adding a custom account when a meaningful chunk of your spending deserves its own line. A photographer, for instance, might split "Equipment rental" out from general office expenses. A few things worth keeping in mind:

• Fewer accounts, not more. A P&L with a dozen expense lines tells a story. One with sixty tells you nothing.
• Don't create an account per vendor. "Adobe" isn't an account — "Software subscriptions" is. Vendors get tracked separately from categories.
• Try to match your tax return. If a category maps cleanly onto a T2125 line, keep the wording close to it.

Renaming and retiring accounts

You can rename any account without breaking history — past transactions follow the account itself, not whatever it was called at the time. An account with no transactions can just be removed; one with history can be made inactive so it stops cluttering up your pickers while staying fully intact in old reports.