In Tally have 15 primary groups for all the transaction.
This group consists of Capital and Reserves and Surplus of the Company. For example Share Capital, Partner's Capital, retained earnings.
Current assets are those assets which are to be converted into cash with a period of one year or during the normal operating cycle of the business
Current Liabilities are those liabilities which require the use of Current Assets for settlement. In other words, liabilities payable within a year or during the operating cycle of the business, whichever is longer, out of the existing current asset or by creation of other current liabilities come under this category. It also includes amount set apart or provided for any unknown liability like Provision for Tax, Pension etc. Long-term loans are treated as Current Liabilities in cases where they are due for settlement within the year of Balance Sheet. But it does not include instalments of long term loans.
It refers to those assets which are held by way of investment and not for the purpose of resale. They are of a permanent nature. These are acquired for the purpose of creating production and income earning capacity or for increasing the production and income earning capacity. For example purchase of Machinery, Building etc. Fixed assets are further classified into (i) Tangible Assets, (ii) Intangible Assets.
Tangible Assets: It refers to those assets which can be seen, felt and touched with physical existence such as machinery, land and building, furniture etc.,
Intangible Assets: These assets do not have any physical existence. Goodwill, patents, trademarks and copyrights are examples of Intangible assets.
This is a convenient head to view all the company's total investments. Investment accounts such as Investment is Shares, Bonds, Government Securities, Long-term Bank deposit accounts, etc., shall be classified under this group
This is a convenient head to view all the bank transaction .Company have the Secured money transferring method for loans. All long term loans taken by the company will come under this Group. For example, debentures Loans from financial institution
Theoretically speaking, this group should not exist. However, in modern accounting, many large corporations use a Suspense Ledger to track money paid or recovered, the nature of which was not yet known then. The most common example is money paid as Advance for Traveling expenses whose details would be known only upon submission of the TA bill on the completion of a tour. Some companies may prefer to open similar accounts under Loans and Advances (Asset) group. Suspense Account is a Balance Sheet item.
The first item under this head is Preliminary Expense which is also known as formation expenses. Expenses associated with the issue of shares and debentures can also be classified under this head. The other items that can come under this head are Share and Debenture Discount, Deferred Revenue Expenses like expenditure on Advertisement, Research & Development (R&D) etc. .These are normally written off against profits over a period of time. Until it is fully written off, the amount not written off appears under this head.
This is a group of sheer convenience. If a company has many branches, then the company can make use of this group. If you wish to maintain books of the branches / divisions on your computer, you must open a separate company (Tally allows maintenance of multiple company accounts).
Selling of goods in the normal course of business is termed as Sales. If the sale is for immediate cash payment, it is cash sales. If payment for Sales is deferred, it becomes Credit Sales. All sorts of sales should constitute this group. The classification depends upon the type of information for the importance is given. Sales Returns come under this Group.
Buying of goods for the purpose of resale is termed as purchases. If cash is immediately paid for the purchases, then it becomes cash purchases. If payment is deferred, it is credit purchases. Purchase Returns will also come under this group. Purchase bills sometimes include various other charges such as Freight, Delivery Charges, Sales Tax, Excise Duty, etc., which are finally accounted for as Purchases. Therefore, they should not be treated as separate expenses. These accounts heads are merely needed to show the amount spent separately in Purchase Register, but in fact they are of purchases account.
In the case of professional or servicing companies, which do not have sales income but have income and professional fees and services, you can place the ledger accounts under Direct Income.
Incomes such as Interest received, Discount received, Commission earned shall be classified under this Group.
This is a Group for all direct expenses like Wages, Freight, Coolie, Import Duty, etc. In General, all purchase and manufacturing expenses should be classified under this group.
All Office, Administration, Selling Expenses and Financial Expenses should be classified under this head. In other words, those expenses which are not considered for computation of Gross Profit should be placed in this group.
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