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Details Groups of Accounts Part 1

Details Groups of Accounts Part 1

Capital Account -  This records the Capital and Reserves of the company. The ledgers that belong to Capital Accounts are Share Capital, Partners’ Capital A/c, Proprietor’s Capital Account and so on.

Reserves and Surplus [Retained Earnings]

This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so on

Current Assets - Current Assets record the assets that do not belong to either Bank Accounts or Cash-in-Hand sub-groups.

a)    Bank Accounts - Current account, savings account, short term deposit accounts and so on.

b)   Cash-in hand - Tally automatically creates Cash A/c in this group. You can open more than one cash account, 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.)

c)    Deposits (Asset) - Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company (not received by the company, which is a liability).

d)   Loans & Advances (Asset) - This records all loans given by the company and advances of a non-trading nature (example: advance against salaries) or even for purchase of Fixed Assets. We do not recommend you to open Advances to Suppliers’ account under this Group.

e)    Stock-in-hand - This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The balance control depends on whether you have selected Integrated Account-cum-Inventory option while creating the company.

f)     Sundry Debtors – This subgroup comes under Current Assets and ;you can open ledger  accounts such as goods sold on credit ( Customer Accounts)

Conti... Part 2 Coming Soon
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Nasir Pathan

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