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How to Create New Account

This chapter covers

  • Mandatory fields, while creating new account.
  • How to select "Account Group", while creating new account.
  • Whether to select "Dr." or "Cr." as Opening Balance, while creating new account.


While creating new account, following things are mandatory :-


  1. Account Name
  2. Account Group Name
  3. Opening Balance
  4. State (In case of customer or supplier)

Opening Balance : Balance of an account at the start of the year (1st April).

State : Select state of the party while creating account. This state will come as "Place of Supply" of Bill in purchase/ sale entries.

The questions here arises are -

  1. which group to select?
  2. Opening balance- either Dr. or Cr.?

Here are some samples for account group selection :-


A] For Customers :

select group "Sundry Debtors" & Opening Balance : "Dr."
  • Here Dr. means Debit Amount, the amount which is about to receive from that customer.

  • B] For Suppliers :

    select group "Sundry Creditors" & Opening Balance : "Cr."
  • Here Cr. means Credit Amount, the amount which is about to pay to that supplier.

  • c] For any regular expenses :

    select group "Indirect Expenses" , Indirect expenses is that expenses which are not related to purchase.
  • for eg. Salary Expenses, Stationery, Office Expenses, Travelling Expenses, etc.

  • D] For purchase related expenses:

    select group "Direct Expenses" , Direct expenses is that expenses which are directly related to purchase activity.
  • for eg. Hamali, Transport, Packing, etc made while purchasing stock (goods).

  • E] For Bank Account :

    1.For saving or current account select "Bank Account" as account group & Opening Balance"Dr."
  • Here Dr. means Debit Amount, the amount which is your bank balance.
  • This amount is generally mentioned as "Credit Amount" in your bank statement.


    2.For Overdraft or Cash-Credit (C-C) or Credit Card or any loan account select"Bank Loan Account". & Opening Balance"cr."
  • Here Cr. means Credit Amount, the amount which is given by bank as a loan.
  • This amount is generally mentioned as "Debit Amount" in your bank statement.


    Tips :
  • Yes you are right, generally in bank statement the effect of account is mentioned in opposite side..
  • If your bank statement shows "Credit Amount", then in your accounting software, you must mention it as "Debit Amount" and vice-versa.
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