Groups in Tally

List of all pre-defined groups in Tally

15 Primary Groups 13 Sub Groups

Branch / Divisions Bank Accounts

Capital Account Bank OD A/c

Current Assets Cash-in-hand

Current Liabilities Deposits (Asset)

Direct Expenses Duties & Taxes

Direct Incomes Loans & Advances (Asset)

Fixed Assets Provisions

Indirect Expenses Reserves & Surplus

Indirect Incomes Secured Loans

Investments Stock-in-hand
Loans (Liability) Sundry Creditors

Misc. Expenses (Asset) Sundry Debtors

Purchase Accounts Unsecured Loans

Sales Accounts

Suspense A/c

The Sub-groups are defined under certain Primary groups. You may please have a look at
them below.

Predefined Primary Groups Predefined Sub-groups that appear under

Primary Groups

Current Assets 1. Bank Accounts

2. Cash-in-hand
3. Deposits (Asset)
4. Loans & Advances (Asset)
5. Stock-in-hand
6. Sundry Debtors

Loans (Liability) 1. Bank OD A/C

2. Secured Loans
3. Unsecured Loans

Current Liabilities 1. Duties & Taxes

2. Provisions
3. Sundry Creditors

Capital Account Reserves & Surplus

Now, out of the 15 Primary Groups - 9 Primary Groups, which are Capital in nature, appear in
the Balance Sheet and 6 Primary Groups, which are Revenue in nature, appear under Profit &
Loss Account.

The following Primary Groups are Capital in nature and appear in the Balance Sheet:

1. Capital Account
2. Current Assets
3. Current Liabilities
4. Fixed Assets
5. Investments
6. Loans (Liability)
7. Suspense A/C
8. Misc. Expenses (Asset)
9. Branch/Divisions

The following Primary Groups are Revenue in nature and appear in the P&L Account:

1. Purchase A/C
2. Sales A/C
3. Direct Expenses
4. Indirect Expenses
5. Direct incomes
6. Indirect incomes

Some Important Terms

Some of these names of groups and sub-groups have been defined below so that it
becomes easier for you to classify different ledgers under them.

Please note:
1. For now, it is important for you to develop a basic understanding of what these terms mean.
As we pick up different examples in the videos, and in our quizzes and assignments, their
meanings and how they are to be used will become clear to you.
2. We have not defined each and every group and sub-group in this document. We have majorly
defined, as per classifications used in Tally, those that we will use throughout the course of this
training and the ones you need to know as a beginner.

1. Capital Account

As defined earlier, Capital represents the amount invested by the owner(s) of the business. All
Capital accounts will be placed under this group.
It has one sub-group: Reserves & Surplus.

Reserves and Surplus [Retained Earnings]: They represent the amount of profit earned but not
yet distributed to owners. Instead, the profit is kept as a “reserve” in the company for either a
specific purpose or for future growth and expansion.

This sub-group contains ledgers like Capital Reserve, General Reserve, and so on.

2. Current Assets

Current Assets are the assets which are either to be consumed in production process (example:
stock) or are to be realized / converted into cash in less than 12 months from the reporting date
(example: Accounts Receivable (the payments a business would receive from its debtors) and
Prepaids (the payments made in advance so as to reap benefits in the next accounting period).

Various sub-groups under Current Assets are Bank Accounts, Cash-in-Hand, Deposits, Loans
and Advances, Stock in hand and Sundry debtors.

● Bank Accounts: They involve all the ledgers representing money deposited in banks under
various accounts like, Current account, Savings account, Short term deposit accounts and so
on.

● Cash-in-hand: Tally.ERP 9 automatically creates a ledger named Cash A/C in this group. You
can open more than one cash account if required. For example, we may need to create one for
Petty Cash (cash used for small expenses).

● Deposits (Current Asset): Deposits contain Fixed Deposits, Security Deposits or any deposit
made by the company for a short duration that are due to be received within 12 months.

● Loans & Advances (Asset): This records all loans given by the company to employees or any
outsider and advances for purchase of any assets, or deposits. For example: advance salaries
or even advance paid for furniture to be delivered two months later or other prepaid expenses.

Accounting Tip: Do not open Advances to Suppliers’ account under this Group. Rather record
that under the name of the supplier only (Sundry Creditors) to avoid duplication and finding
balance at one place only.

Please note: “Security Deposit” Ledger can be placed under both Loans & Advances (Assets)
& “Deposits (Asset) depending on your company policy.

● Stock-in-hand: This group contains accounts like Raw Materials, Work-in-Progress and
Finished Goods.
● Sundry Debtors: It includes ledgers of all Parties to whom goods/services were supplied on
credit and the payment for them yet to be received. For this reason, it is also referred to as
Accounts Receivable.

3. Current Liabilities

Current liabilities are the liabilities which are to be settled or paid by paying money or delivering
services in less than 12 months from the reporting date like Accounts Payables (the payments
that the business has to pay to creditors) and Outstandings (payments that have not been made
yet).

Various sub-groups under Current liabilities are Duties & Taxes, Provisions, and Sundry
creditors.

● Duties and Taxes: Duties and Taxes contain all tax accounts like GST Excise, Income tax,
TDS, other taxes which are payable to Govt departments.

● Provisions: These are funds kept aside for future liabilities i.e. accounts like Provision for
Taxation, Provision for Depreciation and so on.

● Sundry Creditors: Amount payable or amount that has to be paid to suppliers from whom
goods are purchased or whose services are utilized. For each party, a separate ledger shall be
created under this sub-group.

Accounting Tip: If a party is both a supplier and customer, only one ledger shall be prepared
either under current assets or current liabilities. If a person is majorly a supplier, then it should
be created as sundry creditors in Current liabilities. If he is majorly a buyer, then the ledger
should be created as sundry debtors under Current assets.

4. Investments

These are long term assets representing your investment accounts like Investment in Shares,
Bonds, Govt. securities, long term Bank deposit accounts and so on. This shows the total
investments made by the company.

5. Loans (Liability)

It represents the amount that a company has borrowed, typically long-term loans. It is further
categorized under 4 subgroups - Secured Loans, Unsecured Loans, Bank OD A/C, and Bank
OCC A/C.

● Secured Loans: These are Term loans or other long/medium term loans. By term loan we
mean loans taken for a fixed tenure. These are taken against the security of some asset. Typical
accounts are Debentures, Term Loans, etc.
● Unsecured Loans: These are Loans obtained without any security. Example: Loans from
Directors/partners or outside parties and public deposits.

For now, you must only remember Bank OD A/C & Bank OCC A/C primarily represent negative
balance in a bank account.

6. Sales Account

This represents all the revenue of the organization from supply of goods or services.

You can classify your sales accounts based on GST slabs or type of sales. It will help at the end
of the period in analysis as we will have separate balances for each type of sales like cash
sales, credit sales or we can classify in any of the following ways. This classification is optional
and depends on company policy.

For example,

● Domestic Sales

● Export Sales

Now under Domestic Sales you can open the following ledgers:

● Sales (12% GST)

● Sales (5% GST)

● Sales (exempt)

Sales Returns:

In case there are any items that you sold, that have been returned to you, you would have to
record that as well. So, manually - you could directly pass a reverse entry within the journal for
that transaction. In Tally, you could create a separate ledger named “Sales Returns” and enter
the details in that.

7. Purchase Account

This represents all the procurements of goods by the organization for production or reselling
purposes. Just like sales, it can be grouped under various categories depending upon individual
needs of the organization. Like Domestic purchase, purchase through imports, or as per GST
slabs, or more commonly as cash purchases and credit purchases.

8. Direct Incomes [Income Direct]

These are incomes which are part of operations of day-to-day business but not realised by
direct sale of goods or services. You may also use this group for accounts like Servicing, or
Contract Charges collected from customers for after sale services.

For example: The aquaguard or RO that you may have in your house - that may require yearly
maintenance. For that, you would pay a certain fee to the service provider to come and check
the aquaguard. This service fee is a direct income for their company because it’s part of their
routine operations.

For a company providing only professional services and not selling goods, for example, a
banking company, you may not use the Sales Account group at all. Instead, open accounts like
Fees, Proceeds, under this group.

9. Indirect Incomes [Income Indirect]

These are miscellaneous non-sale, non-operating income accounts which are not related to the
day-to-day operating activities of the business. Example: Rent Received and Interest Received.

For example: For a manufacturing organisation, receiving interest is not directly related to the
day-to-day operations. So, that would appear under Indirect Incomes.

10. Direct Expenses [Expenses Direct]

These are manufacturing or direct trading expenses. Example: Wages paid to workers of
factory, other factory or production related expenses like cartage paid on purchases.

11. Indirect Expenses [Expenses Indirect]

All expenses which cannot be directly linked to production activity are Indirect Expenses.
Example: All administrative, selling or non-direct expenses like salary, advertisement, cartage
on sales, interest paid, depreciation, etc.

Some more examples of ledgers that may appear under each

types of groups:
a) Current Assets

1. Cash
2. Bank
3. Accrued Income/income due but not received
4. Prepaid expenses/Deferred expenses
5. Bills Receivable
6. Closing Stock
7. Debtors/Accounts receivable
8. Loans and advances

b) Current Liabilities

1. Expenses Payable/Outstanding
2. Bills Payable
3. Unearned Income/Income received in advance
4. Depreciation Provision
5. Any tax payable
6. Creditors/Accounts Payable
7. Bank OD/OCC

c) Direct Expenses

1. Carriage/Cartage
2. Fuel & Power of Factory
3. Coal, Gas & Water of Factory
4. Consumed Material
5. Expenses on Purchases
6. Factory Expenses (Lighting, Power etc.)
7. Freight
8. Freight inward
9. Freight on Purchase (Freight Inward)
10. Import Duty
11. Manufacturing Expenses
12. Octroi
13. Production Wages
14. Manufacturing Expenses
15. Train Freight & Rent
16. Wages
17. Wages on Production
18. Store rent

d) Indirect Expenses

1. Advertisement Expenses
2. Audit Fees
3. Bad Debts
4. Bank Charges
5. Carriage on Sales
6. Depreciation
7. Discount (Dr) / Discount Allowed
8. Donation/Charity in cash or kind
9. Electricity Expenses
10. Expenses on Sales
11. Export Duty
12. Freight Outward
13. General Expenses
14. Godown Rent
15. Interest (Dr.)
16. Legal Expenses
17. Loss By Damage
18. Salary
19. Stationery

e) Non-Current Assets (Fixed Assets)

1. Air Conditioner
2. Building
3. Car
4. Computer
5. Factory
6. Farm House
7. Furniture & Fitting
8. Horse & Carts
9. Goodwill
10. Land & Building
11. Lease Hold Building
12. Loose Tools
13. Machine & Tools
14. Motor Cycle
15. Plant & Machine
16. Typewriter
17. Investments in shares/bonds

f) Non-Current Liabilities (Fixed Liabilities)

1. Debentures
2. Bonds
3. Loans
4. Secured Loans
5. Unsecured loans
6. Public Deposits

g) Equity / Capital Account

1. Capital
2. Share Capital
3. Reserves
4. Surplus
5. Retained Earnings
6. Undistributed Profits
7. Additional Capital