Groups have a hierarchical organization. At the top of the hierarchy are Primary
Groups. These are the main asset, liability, income or expenditure groups of
accounts that determine the entire accounting and their presentation, i.e.,
whether a ledger affects Profit & Loss Account (as a revenue item) or goes into
the Balance Sheet. The Reserved Primary Groups and subgroups (shown
indented) are: Aliases for the groups are given in square brackets [ ].
Primary Groups of capital nature
1. Capital Account
Reserves and Surplus [Retained Earnings]
2. Current Assets
Bank Accounts
Cash-in hand
Deposits (Asset)
Loans & Advances (Asset)
Stock-in-hand
Sundry Debtors
3. Current Liabilities
Duties and Taxes
Provisions
Sundry Creditors
4. Fixed Assets
5. Investments
6. Loans (Liability)
Bank OD Accounts [Bank OCC Accounts]
Secured Loans
Unsecured Loans
7. Suspense Account
8. Miscellaneous Expenses (Asset)
9. Branch/Divisions
Revenue Primary Groups
10. Sales Account
11. Purchase Account
12. Direct Income [Income Direct]
13. Indirect Income [Income Indirect]
14. Direct Expenses [Expenses Direct]
15. Indirect Expenses [Expenses Indirect]
| 1. Capital Account | This holds the Capital and Reserves of the company. Examples of ledgers that may be opened under this group are Share Capital, Partners' Capital A/c, Proprietor's Capital Account. Reserves and Surplus [Retained Earnings] Open ledgers like Capital Reserve, General Reserve, Reserve for Depreciation, etc. |
2. Current Assets | Directly under Current Assets, you may find place for assets that do not fall under the following sub-groups: Bank Accounts - For Current, savings, short term deposit accounts, etc. Cash-in hand - PearlXPautomatically opens one Cash A/c under this group. You are permitted to open more cash accounts, if necessary. Note: An account under Cash-in-hand group or Bank Accounts/Bank OCC A/c group is printed as separate Cash Book in the traditional Cash Book format and does not form part of the Ledger. Deposits (Asset) - In essence, a place for Fixed Deposits, Security Deposits, or any deposit made by the company (not received by the company, which is a liability). Loans & Advances (Asset) - For all loans given by the company and advances of a non-trading nature, e.g., advance against salaries, or even for purchase of Fixed Assets. We do not recommend you to open Advances to Suppliers account under this group. Doing so gives rise to the difficulty in ascertaining advance position of a particular supplier and to adjust future bills against such advances. For further details, please refer to the section on Common Errors. Stock-in-hand - This is a special group. You may wish to open accounts like Raw Materials, Work-in-Progress and Finished Goods. How the balances are controlled depends on whether you opted to maintain an integrated account-cum-inventory system in the company features. (refer to Company creation section for more details) Let's consider the options: Integrated Accounts-cum-Inventory : You are allowed transactions in Inventory records and the account balances are automatically reflected in the Balance Sheet as Closing Stock. You are not allowed to directly change the closing balance of an account under this group. Non-integrated Accounts-cum-Inventory: Accounts that fall under this group are not permitted any transactions. It allows you to hold opening and closing balances only. Since no vouchers can be passed for these accounts, they are the only accounts for which the closing Balances can be directly altered (by an authorized user only) Sundry Debtors- For your customer accounts. Do not open them under the Sales Account group, which is a revenue account. For more information on common and possible errors in grouping of accounts, please refer below to the separate paragraph on the topic. |
| 3. Current Liabilities | You may open accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and Sundry Creditors Duties and Taxes For all tax accounts like VAT, MODVAT, Excise, Sales and other trade taxes. A convenient place to find the total liability (or asset in case of advances paid), as well as the break-up of individual items. Provisions- For provision accounts like Provision for Taxation, Provision for Depreciation, etc. Sundry Creditors - For trade creditors of the company. Do not open your supplier accounts under the Purchases Account group, which is a revenue account. For more information on common and possible errors in grouping of accounts, please refer below to the separate paragraph on the topic. |
| 5. Investments | To group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank deposit accounts, etc. A convenient place to view the total investments made by the company. |
| For loans, typically long term, taken by the company. | |
| 6. Loans (Liability) | Bank OD Accounts [Bank OCC Accounts] - PearlXP gives two distinct types of Bank Accounts, The Bank OCC A/c is meant to record the company's overdraft accounts with banks. e.g., Bill Discounted A/cs, Hypothecation A/cs etc. Note: An account under Bank OCC A/c group is printed as separate Cash Book in the traditional Cash Book format and does not form part of the Ledger. Secured Loans- For term loans and other long/medium term loans that have been obtained against security of some asset. PearlXP does not verify the existence of the security. Typical accounts would be Debentures, Term Loans, etc. Unsecured Loans - For loans obtained without any security. E.g., Loans from Directors/partners or outside parties. |
| 7. Suspense Account | Theoretically speaking, this group should not exist. However, in modern accounting, many large corporations use a Suspense Ledger to track moneys paid or recovered, the nature of which is not yet known. The most common example is money paid for Traveling Advance whose details would be known only upon submission of the TA bill. Some companies may prefer to open such accounts under Loans and Advances (Asset) group. Please note that Suspense Account is a Balance Sheet item. Any expense account even if it has 'suspense' in its name, should be opened under a Revenue group like Indirect Expenses and not under Suspense Account group. |
| 8. Miscellaneous Expenses (Asset) | This group is typically used more for legal disclosure requirements, like Schedule VI of the Indian Companies Act. It should hold incorporation and pre-operative expenses. Companies would write off a permissible portion of the account every year. A balance would remain to the extent not written off in Profit & Loss Account. PearlXP does not, however, show a loss, carried forward in the Profit & Loss Account, under this group. The Profit & Loss Account balance is shown separately in the Balance Sheet. |
| 9. Branch/Divisions | This group is provided to keep the ledger accounts of all companies that are your company's branches, divisions, affiliates, sister concerns, subsidiaries, etc. This is a group of convenience. You may not wish to utilize it in this manner. Note that PearlXP permits Sales and Purchase transactions to take place with accounts opened here. Remember, these are their accounts in your books and not their books of accounts. Just treat them as you would any party account. If you wish to maintain the books of that branch/division on you computer, you must open a separate company. (PearlXP allows maintenance of multiple company accounts). |
| Revenue Primary Groups | |
| 10. Sales Account | - For different sales accounts. The natural segregation of your sales accounts could be based on Tax slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns. An example of such classification may be helpful: Classify under Sales Accounts the following sub-groups Domestic Sales Export Sales Now under Domestic Sales open the following ledgers: Sales (10%) Sales (5%) Sales (exempt) You may even open an account Sales Returns under the group Domestic Sales to view your net sales after returns (or the returns may be directly passed through journal against the specific sales account). Please do not open customer accounts under this group. For more details on possible errors in this regard, please refer to the paragraph given below. |
| 11. Purchase Account | This is similar to sales accounts, except for the purpose of the transaction. |
| 12. Direct Income [Income Direct] | For non-trade income accounts that affect Gross Profit. All trade income accounts would naturally fall under Sales Accounts. You may wish to use this group for accounts like Servicing Contract Charges that follow sales of equipment. If yours is a professional services company, you may not use the Sales Account group at all. Instead, open accounts like Professional Fees under this group. |
| 13. Indirect Income [Income Indirect] | For miscellaneous non-sale income accounts, e.g., Rent Received and Interest Received. |
| 14. Direct Expenses [Expenses Direct] | For manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company. |
| 15. Indirect Expenses [Expenses Indirect] | For all other administrative, selling or non-direct expenses. PearlXP 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. |
Simply adhering to the reserved groups may be sufficient for many
organizations. For greater diversity, PearlXP allows you to create your own
groups, either as sub-groups or primary groups. Groups can be sub-classified,
to give a virtual accounting tree. At the lowest level, of course, would be the
ledger account. An example of sub-groups would help illustrate the power of this
facility:-The group Indirect Expenses can be sub-classified as under
(Ledgers given in italics):
Indirect Expenses
Administrative Expenses
Interest Paid
Interest paid to banks
Interest paid to others
Marketing Expenses
Selling and distribution expenses
Packing expenses
Transportation
Sales Promotion expenses
Advertising expenses
Direct Promotion expenses
Remember, that during voucher entry, only the ledger accounts are used, - and
the grouping structure remains transparent, irrespective of the use of subclassification.
You may create, alter, or display a single Group or multiple
Groups. Single group option is useful when you wish to work on one group at a
time. Multiple is a time and labour saving option in a list format and is useful
when working on many sub-groups at a time. Once a sub-group is created, it
behaves exactly like a group. Any reference to group would deem to include a
sub-group.
Pearl XP Security Control Security levels – types of security
Security Control Security levels – types of security: PearlXP has a
very customizable security system. You can set up authority levels and users
who are placed at these levels. The authority levels or Types of Security decide
the rights of the users – what they can or cannot do when using PearlXP.
PearlXP has two security types already set up. One is Owner and the other Data
Entry. Owner has full access and rights to all parts of PearlXP. Data Entry has
restricted rights. You are allowed to create other security types based on these
predefined types and allow more or less rights as required.
Users and Passwords: You would need to create different users who belong
to one or more different security levels or types of security. Select the option at
the Security control menu to define users, give their passwords and their
security levels. Only the administrator can assign users and their passwords.
Backup and Restore: The Backup and restore process are protected with
Passwords for security. You may also backup to a Hard Disk or Network Disk by
specifying the appropriate path (e.g. C:\BACKUP)
of a company without restoring the data. I.e. you can take or even pass/Alter
entries in the Backup Data without altering the original database. If you are a
professional Accountant /Auditor you can check the backup of your clients at
your office and can make necessary alterations in accounts if needed and can
return the backup data for restoration in the clients computer. (For checking
the database the client has to provide the Backup Key he has given at the time
of taking the backup)
ACCOUNTS INFORMATION
Groups (Classification of Account-heads)
PearlXP follows the 'Single Ledger' concept of accounting, which is the modern
way of managing accounts. This is in direct contrast to Subsidiary Ledger
Accounting. Thus, all financial entries are performed using ledgers or account
heads. Ledger account heads are created to identify transactions. The single
ledger concept does away with the need for sub-ledgers and corresponding
control accounts in General Ledger. Ledger balances by themselves do not
convey much without some form of classification. PearlXP, therefore, gives you
a powerful way to group ledger information, which is meaningful in reports and
compliant with laws. Groups, in PearlXP, serve to both classify and identify
account heads according to their nature and enable presentation of summarized
information.
Traditionally, grouping of accounts is a post-accounting activity that is done only
when reports are needed. This has an inherent drawback of delayed reports thatare not available at hand when required. PearlXP gives you great flexibility in
setting up your chart of accounts. It allows you to group your ledger accounts
right at time of creating your accounts chart. Your reports and statements will
reflect the desired classification at all times. Further, PearlXP permits you to regroup
your ledgers anytime (with some minimal restrictions), should reclassification
be necessary. We acknowledge that re-grouping is always possible
and would, in practice, be resorted to, when there are changes in the nature of
information. However, re-grouping can be done only by a user account that has
requisite authority under the access control list. At the highest level of grouping,
accounts are classified into capital or revenue - more specifically into assets,
liabilities, income and expenditure. Based on mercantile accounting principles,
PearlXP provides a set of reserved groups and allows you to modify their
names or create sub-groups.
very customizable security system. You can set up authority levels and users
who are placed at these levels. The authority levels or Types of Security decide
the rights of the users – what they can or cannot do when using PearlXP.
PearlXP has two security types already set up. One is Owner and the other Data
Entry. Owner has full access and rights to all parts of PearlXP. Data Entry has
restricted rights. You are allowed to create other security types based on these
predefined types and allow more or less rights as required.
Users and Passwords: You would need to create different users who belong
to one or more different security levels or types of security. Select the option at
the Security control menu to define users, give their passwords and their
security levels. Only the administrator can assign users and their passwords.
Backup and Restore: The Backup and restore process are protected with
Passwords for security. You may also backup to a Hard Disk or Network Disk by
specifying the appropriate path (e.g. C:\BACKUP)
Database Lookup: Through this module you can checkup the PearlXP Backup
of a company without restoring the data. I.e. you can take or even pass/Alter
entries in the Backup Data without altering the original database. If you are a
professional Accountant /Auditor you can check the backup of your clients at
your office and can make necessary alterations in accounts if needed and can
return the backup data for restoration in the clients computer. (For checking
the database the client has to provide the Backup Key he has given at the time
of taking the backup)
ACCOUNTS INFORMATION
Groups (Classification of Account-heads)
PearlXP follows the 'Single Ledger' concept of accounting, which is the modern
way of managing accounts. This is in direct contrast to Subsidiary Ledger
Accounting. Thus, all financial entries are performed using ledgers or account
heads. Ledger account heads are created to identify transactions. The single
ledger concept does away with the need for sub-ledgers and corresponding
control accounts in General Ledger. Ledger balances by themselves do not
convey much without some form of classification. PearlXP, therefore, gives you
a powerful way to group ledger information, which is meaningful in reports and
compliant with laws. Groups, in PearlXP, serve to both classify and identify
account heads according to their nature and enable presentation of summarized
information.
Traditionally, grouping of accounts is a post-accounting activity that is done only
when reports are needed. This has an inherent drawback of delayed reports thatare not available at hand when required. PearlXP gives you great flexibility in
setting up your chart of accounts. It allows you to group your ledger accounts
right at time of creating your accounts chart. Your reports and statements will
reflect the desired classification at all times. Further, PearlXP permits you to regroup
your ledgers anytime (with some minimal restrictions), should reclassification
be necessary. We acknowledge that re-grouping is always possible
and would, in practice, be resorted to, when there are changes in the nature of
information. However, re-grouping can be done only by a user account that has
requisite authority under the access control list. At the highest level of grouping,
accounts are classified into capital or revenue - more specifically into assets,
liabilities, income and expenditure. Based on mercantile accounting principles,
PearlXP provides a set of reserved groups and allows you to modify their
names or create sub-groups.
PearlXP Xpress Accounting
COMPANY INFORMATION
Create a company: The very first time you start PearlXP, you would require
to 'create' a company. 'Create Company' simply means giving basic information
about the company whose books of accounts PearlXP is maintain for you.
PearlXP is smart, but it does need an introduction to your company
Firm Name: Give the name of the company whose books are
being opened. It is typically your company. If you are a
professional accountant and are maintaining the books of your
clients, give the Client Company's name.(Of course, you would maintain your firm's books on PearlXP
too! in that case, give your firm's name).
Mailing Name and address (Not compulsory - can be left
blank): The mailing name could be different from Company
Name. What is its use? The mailing name and address is picked
up for inclusion in any report which needs the company name
and address at the top, e.g., Balance Sheets, Statement of
Accounts, etc. You do not need full name and address in each
report; hence the option. Let's say you have branches in say,
Madras, Bombay and London.
Each branch may begin the branch books by giving the company
name as 'Hindustan'. However, its mailing name is
comprehensive with full details:
Hindustan Private Limited
Madras Branch
A-542, ASalai
MGNagar, MADRAS - 600053
The mailing name and address would be available for financialstatements and statements of accounts that may need to be
given outside the company.
Books Starting From (Financial Year): To specify the
Financial Year for this company. PearlXP considers 12 months
from the date you give here as the Financial Year. The books are
closed exactly 12 months after this date. For example, you may
give 1 April 2001 as the date. Your FY will be April to March in
this case, ending with 31st March of every year.
Borrow Books From: At the time of Creating a New Company
you can specify the chart of accounts you need by selecting the
Standard or Typical Chart of Accounts. Pearl also gives an option
to borrow the chart of accounts of an Existing Company if
needed. You can even create a copy of an Existing Company.
Select a company: When the company is created it gets loaded
automatically the first time. However, you must select the company to load
it. (PearlXP can be configured to automatically load one company by default by
checking the 'Set as Default' Setting.)
Alter a company: You can modify, at any time, any information given whilst
creating the company Info Except Financial Year.
Voucher Setup: Configure different features of your voucher entry screen
and Voucher Printing. You can configure numbering of vouchers as Auto or
Manual and can give separate Prefix for Payment, Receipt and Journal Vouchers.
You can also Enable or Disable the Voucher Printing by checking the appropriate
check box.
Print after saving voucher? : If you want to print every
voucher after entering it, select the Print Voucher Option. This issuitable for an online environment where you use the PearlXP
printed voucher as the formal voucher. Remember, however,
that the transaction is already recorded and posted and should
you wish to make corrections to the printed voucher, you must
alter the PearlXP voucher online and print it out again.
Voucher Numbering: Automatic: This method is both flexible
and exhaustive. Use it carefully to give you your desired
numbering system. Select this option to let Pearl XP number the
vouchers automatically for you. You must give the Starting
number: Give the number for the first voucher. Usually it is 1.
You can set it to any number you want.
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