Q.What is grouping of accounts ?

Grouping = combining accounts of similar nature under a common head in the Balance Sheet.

Meaning

Grouping of accounts is the process of showing items of the same nature together under a single, common heading in the Balance Sheet instead of listing each account separately. It brings related items together so the statement is compact and easy to read.

Examples of groups

• Current Assets: cash in hand, cash at bank, sundry debtors, bills receivable, closing stock, prepaid expenses.
• Fixed Assets: land and building, plant and machinery, furniture.
• Current Liabilities: sundry creditors, bills payable, outstanding expenses. …