Subaccounts let you track several related types of income or expenses independently, yet keep them all under the “umbrella” of a single parent account.
For example, if your business has substantial advertising expenses, you could divide your Advertising expense account into several subaccounts:
Advertising
Directing Mailings
Newspaper Ads
Signs
Yellow Pages Listing
Your reports will now show subtotals for the various ways that you advertise as well as the total for all of your advertising.
Note: You can also select the account then drag and drop it under the name of the account you want to make it a subaccount of.
The balances of subaccounts are added to their parent account balance in the chart of accounts. The register of a parent account shows all the transactions in the subaccounts.
When you reconcile a balance sheet account that has subaccounts (such as a joint checking account), reconcile the parent account, so that you reconcile all transactions for that account.