Grouping of Accounts, Ledgers and Vouchers in a Computerised Accounting System

A computerised accounting system organises accounting information through three linked ideas — Groups, Ledgers, and Vouchers — and understanding how they fit together is essential to using any accounting software correctly.

Groups. Every ledger account in a computerised system is classified under a Group, which is simply a category that brings together ledgers of a similar nature, so that the Balance Sheet and Trading/Profit and Loss Account can be prepared automatically in the correct classification. Typical groups used in accounting software include: Capital Account, Loans (Liability), Current Liabilities (e.g., Sundry Creditors, Outstanding Expenses), Fixed Assets (e.g., Land and Building, Furniture, Machinery), Investments, Current Assets (e.g., Sundry Debtors, Cash-in-hand, Bank Accounts, Stock-in-hand), Sales Accounts, Purchase Accounts, Direct/Indirect Expenses, and Direct/Indirect Incomes. Each group itself may contain further sub-groups — for example, 'Sundry Debtors' and 'Sundry Creditors' are themselves groups under which each individual customer's or supplier's ledger account is opened.

Ledgers. A ledger in a computerised system is the individual account of a person, an asset, a liability, an expense, or an income (e.g., a customer's account, a Furniture Account, a Rent Account) — exactly the same idea already studied in the Ledger chapter of this syllabus, except that here every ledger must be created under one, and only one, appropriate group before any voucher can be posted to it. Once a ledger is created under its group, all vouchers affecting that ledger automatically update its balance and feed into every report that group belongs to.

Vouchers. A voucher is the basic document through which every transaction is entered into a computerised accounting system — it is the computerised equivalent of a Journal entry. Common types of vouchers include:

• Payment Voucher — for recording any payment made by the business (by cash or bank).
• Receipt Voucher — for recording any amount received by the business (by cash or bank).
• Contra Voucher — for transactions strictly between the business's own cash and bank accounts (e.g., cash deposited into the bank, or cash withdrawn from the bank).
• Journal Voucher — for non-cash transactions that do not fit a payment, receipt, sales or purchase voucher (e.g., adjustment entries, depreciation, rectification of errors). …