In the modern way of accounting, all financial entries are performed using Leders or account heads.
Tally follows the ‘Single Ledger’ concept of accounting. It is advisable to Group / Classify ledger
information based on their functions. Groups are helpful in classifying and identifying account heads
based on their nature. Grouping helps in presenting summarized information. Regrouping of accounts
is also permitted by Tally. The single ledger concept eliminates the need for sub ledgers and
corresponding control accounts in General Ledger. Traditionally, grouping of accounts is a postaccounting
activity, but it leads to delayed reports that are not available at hand when required. At the
highest level of grouping, accounts are classified into Assets, Liabilities, Income and Expenses.
Groups by Default (Pre-defined Groups) : Tally provides you with a number of pre-defined
Groups to save you from unnecessary burden of creating frequently used Groups. In these Groups,
some are Primary and some are Subgroups. Subgroup is a part of the main group.
Predefined Groups
Predefined Groups
Alias names for the Groups are shown inside a square bracket.
Detailed Description of Pre-Defined Groups
| Capital in Nature | Revenue in Nature |
| 1. Capital Account | 1 Sales Account |
| i. Reserves and Surplus [Retained Earnings] | 2 Purchase Account |
a. Bank Accounts | |
b. Cash-in hand | |
c. Deposits (Asset) | |
d. Loans & Advances (Assets) | |
e. Stock-in-hand | |
f. Sundry Debtors | |
3 Current Liabilities | 3 Income Direct |
a. Duties and Taxes | |
b. Provisions | |
c. Sundry Creditors | |
4 Fixed Assets | 4 Indirect Income[ Income Indirect] |
5 Investments | 5 Direct Expenses[ Expenses Direct] |
6 Loans (Liability) | 6 Indirect Expenses [Expenses Indirect] |
a. Bank OD Accounts [Bank OCC Accounts] | |
b. Secured Loans | |
c. Unsecured Loans | |
7 Suspense Account | |
8 Miscellaneous Expenses (Asset) | |
9 Branch / Divisions |
Detailed Description of Pre-Defined Groups
1) Capital Assets It holds Capital and Reserves of the company. For example, Proprietor’s or
Owner’s Capital Account, Partners Capital Account, Share Capital.
a) Reserves and Surplus [Retained Earnings] : Related to Reserves. Retained Earnings is the
alias name for Reserves and Surplus, e.g. Capital Reserve, General Reserve, Reserve for
Depreciation.
2) Current Assets : It consists of 6 subgroups. If all the assets of the company could not be
allocated in any of these subgroups then the primary group ‘Current Assets’ can accommodate it.
a) Bank Accounts : It holds Current Savings, Short-Term Deposits, etc.
b) Cash-in-Hand : This holds Ledger Account for Cash. More than one Cash Account can be
opened if needed, e.g. Petty Cash A/c.
c) Deposits (Asset) : It holds deposits like Fixed Deposits, Rental Deposits, Security Deposits,
etc. that is the deposits made by the Company (not received).
d) Loans & Advances (Assets) : It is for holding loans given by the company which are nontrading
in nature, e.g. Salary Advance, Advance for Purchase of Fixed Assets, etc.
e) Stock-in-Hand : It holds Opening and Closing Stock. It is a special Group. The balances
depend on the type of Inventory Management option selected while creating a company, e.g.
Raw Materials A/c, Work-in-Progress, Finished Goods, etc.
i) Integrated Accounts-cum-Inventory : Transactions in Inventory records are permitted
and the corresponding changes are reflected in the Balance Sheet as Closing Stock. You
just can not alter the Closing Stock balance directly.
ii) Non-integrated Accounts-cum-Inventory : No transaction permitted. It holds only the
Opening and Closing balances. The authorized users can directly alter closing balances as
no Vouchers can be passed for these accounts.
f) Sundry Debtors : It holds the accounts of the debtors, who owe money to the business.
3) Current Liabilities : It holds the Outstanding Liabilities, Statutory Liabilities and some other
minor liabilities. Liabilities such as PF, TDS, ESI also fall under this Group.
a) Duties and Taxes : it holds the accounts of trade duties, Excise, Local Sales Tax, Central
Sales Tax.
b) Provisions : This acts as a reserve like Provision for Depreciation, Provision for Taxation,
etc.
c) Sundry Creditors : It holds the account of the trade Creditors of the Company.
[One should not open the Supplier Account under Purchase Account Group, as Purchase A/c is a
Revenue A/c.]
4) Fixed Assets : It is a convenient place for holding the Fixed Assets of the company.
5) Investments : It holds the accounts of overall investments, like Bonds, Shares, Govt., Securities,
Long-Term Bank Deposits, etc.
6) Loans (Liability) : It keeps an account of the Loans taken by the Company.
a) Bank OD Accounts [Bank OCC Accounts] : Bank OCC is the alias name for Bank OD
Accounts. It holds Over Draft Account like Hypothecation Accounts, Bill Discounting
Account, etc. of the Bank.
b) Secured Loans : It holds the accounts of the loans taken by the company from Banks and
other Financial Bodies by mortgaging its Fixed Assets. It is a secured loan so it has to be
returned from the fixed asset of the company even if the company fails.
c) Unsecured Loans : This is an unconditional loan obtained from Partners / Directors or
outside parties.
7) Suspense Account :As the name implies, it is created when there is some discrepancy in the
Balance Sheet. It is a Balance Sheet item, e.g. Travelling Advance whose details will be known
only after the submission of TA bill.
8) Miscellaneous Expenses (Asset) : This is mainly for legal disclosure requirements, like
Schedule VI of Indian Companies Act. It is rarely used.
9) Branch / Divisions : It holds the accounts of all the Sister Concerns, Branches, Divisions,
Affiliation, etc. of the existing company.
10) Sales Account : It holds the different Sales Accounts. The Sales Account can be categorized as
Types of Sale (Domestic Sales, Export Sales) and the Tax slabs. To have an idea of net sales after
return, one can even open an account Sales Return under the Group Domestic Sales. [don’t open
Customers account under the Group Sales Account.]
11) Purchase Account : It holds the accounts related to purchase.
12) Direct Income [Income Direct] : It holds the account of the direct income like income due to
sales of goods. A Professional Service Company may like to open an account as Professional Fees
instead of Sales Account, under this Group.
13) Indirect Income [Income Indirect] : It holds the accounts of non-sale indirect income, like
income from Rent Received, Commissions Received, Interest Received, etc.
14) Direct Expenses [Expenses Direct] : It holds the direct trading expenses of the factory, like
Wages paid to Labours, Transportation, Electricity Bill.
15) Indirect Expenses [Expenses Indirect] : Expenses incurred in the administrative building, like
Salary paid to Staff, Maintenance of Vehicle, etc.
Tally automatically opens the Profit & Loss Account which is a reserved primary account. You may
use this account to pass adjustment entries through journal vouchers, e.g. transfer of profit or loss to
Capital or Reserve account.
1 comment:
Many Thanks for your blog post. Good Resource for All.
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