Classification Of Accounts Heads In Tally

Usually, grouping of accounts is done only when reports are needed. This may result in delay in preparing the reports. Tally allows you set up chart of accounts.

You can group the ledger accounts while creating them. This will enable your reports and statement of reflect the desired classification at any point. In Tally, you can also re-group the ledgers (with some minimal restrictions) if re-classification is necessary. Re-grouping becomes necessary whenever there is a change in the nature of information. However, re-grouping can be done only by users who have authorised rights.

At the highest level of grouping, accounts are classified into capital or revenue specifically into assets, liabilities, income and expenditure. Based on mercantile accounting principles, Tally provides a set of reserved group and allows you to modify there names or create sub-groups.

1. Sub-Groups: A Sub-Group behave exactly like a group and is created under a group.

Concept Of Sub-Groups: Groups have a hierarchical structure. The main group of accounts that determine the entire accounting and their presentation are the asset, liability, income or the expenditure. These main groups ascertain whether a ledger affects Profit & Loss Account as a revenue item or if it affects the Balance Sheet.

The Reserved Primary Groups And Sub-Groups Are: 

Primary Groups of Capital Nature:

1. Capital Account

    A) Reserves And Surplus [Retained Earnings]

2. Current Assets

    A) Bank Accounts

    B) Cash-in-hand

    C) Deposits [Asset]

    D) Loans & Advances [Asset]

    E) Stock-in-hand

    F) Sundry Debtors

3. Current Liabilities

    A) Duties and Taxes

    B) Provisions

    C) Sundry Creditors

    D) Fixed Assets

4. Investments

5. Loans (Liability) 

   Bank OD Accounts [Bank OCC Accounts]

    A) Secured Loans

    B) Unsecured Loans

6. Suspense Account

7. Miscellaneous Expenses [Asset]

8. Branch/Divisions

9. Sales Account

10. Purchase Account 

11. Direct Income [Income Direct]

12. Indirect Income [Income Indirect]

13. Direct Expenses [Expenses Direct]

14. Indirect Expenses [Expenses Indirect]

Note: Aliases for the groups are given in square brackets [ ].

Click on link to check A Discussion on Each of the Reserved Groups and Sub-Groups of Tally