Creating Parent G/L Accounts
You can create parent accounts by assigning similar G/L accounts to them. The accounts that you assign to a parent account are sub accounts of the parent. You cannot allocate entries to a parent account. PCLaw uses parent accounts strictly for categorizing similar sub-accounts and summarizing them on the Income Statement and Balance Sheet.
A G/L account must meet the following criteria before you can use it as a parent account and assign sub accounts to it:
- It must be the same type (Asset, Liability, Expenses, etc.) as the sub accounts you assign to it
- It cannot have a balance and you cannot post any entries to it
- It cannot be a control or reserved account
After the G/L account meets the above requirements you can assign sub accounts to it.
Due to the requirement of parent account, many firms create new G/L accounts for the purpose of using them as parent accounts.