Each type of account is associated with a specific accounting group as established by the General Accounting Plan (PGC). Therefore, before creating an account, it is important to know the accounting groups, the accounts they include and their scope.
As an aid, essential information about each group is summarized below. This way, you'll be able to quickly identify which group matches the transaction you need to target.
Summary of Accounting Groups
The PGC lists all accounting accounts and groups them into 9 different groups depending on whether they affect assets, liabilities and net worth (1 to 5), expense accounts and income (6 and 7) or the accounts that reflect changes in net worth (8 and 9).
Group 1. Basic financing: includes transactions of equity capital, reserves or long-term debt.
Group 2. Non-current assets: includes transactions involving machinery, intellectual property, etc.
Group 3. Inventories: includes transactions referring to merchandise, raw materials or semi-finished products.
Group 4. Creditors and Debtors for Commercial Operations: includes movements linked to suppliers, customers, creditors, VAT.
Group 5. Financial accounts: includes short-term debt or cash.
Group 6. Purchases and expenses: includes transactions for the acquisition and variation of inventories, expenses, taxes, external services, etc.
Group 7: Sales and Revenues
Positive inventory changes and current and non-current income.
Group 8. Expenses Charged to Net Equity: includes economic events that reduce the company's net worth.
Group 9. Income Imputed to Equity: contemplates economic events that cause an increase in value in equity.
How to create a ledger account
When creating a ledger account you will be able to customize the name, the color and the last four digits of the account number, since the first digits are given from the type account you select.
To create an account, go to Accounting > Chart of Accounts . Once there, perform the following steps:
Click New Account in the upper right corner.
Select the type of ledger account you want to register.
Write the name with which you will identify your ledger account.
Type the last four digits of the account number.
Click on create to finish.