Ledger Creation & Accounting Groups

Concept

A Ledger is an individual account in Tally Prime where all transactions related to that account are recorded. Think of ledgers as different “pigeon holes” or folders for your money, assets, liabilities, income, and expenses.

Examples: Cash in Hand, Sales Account, Rent Account, Customer Name, Supplier Name, etc.

Ledgers follow the Golden Rules of Accounting.

Use Case & Real Life Practice

• Use Case: To classify every transaction properly so that accurate Profit & Loss Account and Balance Sheet can be generated.
• Real Life Examples:
  • A grocery shop needs ledgers for “Cash”, “Customers”, “Purchase of Rice”, “Electricity Bill”.
  • A coaching class needs ledgers for “Fees Received”, “Salary Paid”, “Rent”.

Golden Rules of Accounting (Must Remember):

Step-by-Step Guidance (Verbal Instructions)

1. Open your company in Tally Prime.
2. At Gateway of Tally, go to Create → Select Ledger
   (OR) Press Alt + G → Create → Ledger.
3. Fill in the ledger details:
   • Name: Enter name of the account (e.g., “Cash in Hand”)
   • Under: Select the correct Group (very important)
     • Cash → Current Assets
     • Sales → Sales Accounts
     • Capital → Capital Account
     • Rent Paid → Indirect Expenses
   • Opening Balance: Enter amount if any (Dr or Cr side)
4. Press Accept or press Y to save.

Important Groups to Remember:

• Capital Account
• Current Assets (Cash-in-Hand, Bank Accounts, Sundry Debtors)
• Current Liabilities (Sundry Creditors)
• Sales Accounts
• Purchase Accounts
• Direct/Indirect Expenses & Incomes

Example

1. Create Ledger: Cash in Hand
   • Under: Current Assets
   • Opening Balance: ₹50,000 (Dr)
2. Create Ledger: Sales Account
   • Under: Sales Accounts
   • Opening Balance: 0
3. Create Ledger: Ramesh (Customer)
   • Under: Sundry Debtors

Practice Set for Students

Create the following Ledgers in your practice company:

Task: After creating all ledgers, go to Display → List of Accounts and verify all your ledgers are listed correctly.

Connection to Next Topic

After creating Ledgers, the next step is Inventory Creation (Stock Items, Groups & Units). Many transactions (especially Sales & Purchase) will use both Ledgers and Stock Items together.