What feature in QuickBooks Online allows you to categorize income and expenses for proper reporting?

The Chart of Accounts is a fundamental feature in QuickBooks Online that enables users to categorize income and expenses effectively. It serves as a comprehensive list of all accounts used in the business’s accounting system, providing a structured way to organize financial transactions. By using the Chart of Accounts, you can assign each transaction to an appropriate account, which streamlines reporting and ensures that financial statements accurately reflect the business’s performance.

For instance, if you categorize revenue and expenses under specific accounts, such as "Sales Income" or "Office Supplies," you can easily generate reports that give insights into these categories. This level of organization is crucial for both internal management and external reporting, including tax preparation.

While other options like Class Tracking or Job Costing provide additional ways to track financial data for more detailed reporting, the Chart of Accounts is the foundational tool that facilitates overall categorization of income and expenses across the entire accounting system.