Account Groups

Account Groups are the aggregation of similar ledger accounts into a single group. These account groups are intended to demonstrate the hierarchy of ledger accounts. This hierarchy of ledger accounts will be very useful for generating appropriate reporting. The generally used account groups in Odoo are Regular, Payable, Receivable, and Liquidity. Each of these account ledgers is described under the defined groups:

Sl.No Account Name Nature Group Under Affect in Reports
1 Receivable Asset Receivable Balance Sheet
2 Bank and Cash Asset Liquidity Balance Sheet
3 Current Assets Asset Regular Balance Sheet
4 Non-Current Assets Asset Regular Balance Sheet
5 Prepayments Asset Regular Balance Sheet
6 Fixed Assets Asset Regular Balance Sheet
7 Payable Liability Payable Balance sheet
8 Credit Card Liability Liquidity Balance sheet
9 Current Liabilities Liability Regular Balance sheet
10 Non-Current liabilities Liability Regular Balance sheet
11 Equity Equity Regular Balance sheet
12 Current Year Earnings Equity Regular Balance sheet
13 Income Income Regular Profit & Loss
14 Other Income Income Regular Profit & Loss
15 Expenses Expense Regular Profit & Loss
16 Depreciation Expense Regular Profit & Loss
17 Cost of Revenue Expense Regular Profit & Loss

Let us have a look at each of them.

1. Receivables (Debtors)

Account Receivables can be defined as the amount of money needed to pay for products or services received but not yet paid. The receivables are also known as debtors. These accounts are very convenient for registering all the receivables from the side of customers. When we consider the nature of the receivables, they will come under the Assets. Considering a Sale, based upon the increasing of receivables, the receivable accounts get debited.

2. Bank and Cash

The nature of the Bank and Cash type is Asset, and every bank and cash account of the organization will come under the Bank and Cash type. To give an example, suppose an organization forms a cash payment in favor of a credit purchase and considers the amount that gets transferred from the bank account. The bank account will be credited since the asset decreases.

3. Current Assets

Current assets are the cash and other assets that are expected to be converted to cash within one year. So this account type will be very advantageous for recording short-term assets. The assets like inventory, short-term investments, prepaid expenses, etc., can be considered in this type. The bank deposits, loans, and advances offered to the employees come under this category.
Stock valuation accounts, Stock input accounts, Stock Output Accounts, Deferred Expense Accounts, and many more are General accounts. Ledgers of type ‘Current Assets’ used in Odoo and the entries of this type affect the Balance Sheet since its nature is an asset.

4. Non-Current Assets

The non-current assets are considered as an asset that the organization obtains or invests. However, the amount of that investment does not revert within an accounting year. So this investment type will bear for a long time, and this extensive type cannot be simply liquidated into cash. Examples of this type of asset are buildings, vehicles, insurance, etc. The total esteem can not be calculated within the accounting year. All of them are listed in the balance sheet.

5. Prepayments

Prepayments can be illustrated as prepaid expenses. In this case, the cost has already occurred for the products and services, but they are not to be received yet consumed. When taking an example, Odoo considered Deferred Expenses or Prepaid expenses as this type.
For example, if there is insurance with a payment of $ 24000 for one year. The organization will not be able to enter the whole expense in the profit and loss report for the current year. The organization must divide the amount over one year. So 200$ will be consumed monthly, and the expense will be posted. The payment will be of the ‘Asset’ nature, and the asset will decrease each year. As a result, the payment account will get credited, and the expense account will get debited just as the expense gradually decreases.

6. Fixed Assets

The Fixed Assets account type is very comfortable for capturing the details of every fixed asset transaction, such as machinery, vehicles, land, buildings, furniture, and many more. We can include all the items the company or business aims to use for a long period. Further, the fixed assets come under the Assets nature. Because when we purchase, the fixed asset will increase, the fixed asset account will debit, and the fixed assets will be listed in the balance sheet.

7. Payables

The Payables account type is also known as Creditors. It is the total unpaid amount of an organization to any individual or anyone. The payable accounts are suitable for keeping a record of every payable amount to the suppliers or vendors. In addition, the payable account is credited as the type of liability on a vendor bill.

8. Credit Cards

Credit Card is also a type of account, and the nature of the account is Liability. The credit card is documented on the balance sheet. In the case of credit cards, the amount of money expended using the credit card for any purpose, such as a purchase or any other payment for other expenses through the credit card, will cause some debts, and we should refund within a period of time, almost less than two months or close to.

9. Current Liabilities

Current liabilities can be termed as short-term liabilities, which are supposed to be settled within a year. The following categories can be listed under the Current liability account type. Which are bank overdrafts, short-term loans, taxes and duties, salary payables, payroll taxes, accrued expenses, income taxes, and much more.

10. Non-current liabilities

Non-current liabilities are long-term liabilities that can be referred to as long-period debts or financial commitments that are due a year or more and are listed on the balance sheet. Long-term loans, deferred tax liabilities, long-term lease obligations, and pension benefit obligations are some examples of non-current liabilities.

11. Equity

Equity account type can be considered as the financial depiction of the proprietary of an organization or business. It represents the amount of money the employers endowed for initiation and initial functioning. Equity can arise from the payments to a business from the owners' side or the residual earnings formed by a business. In other words, we can say that Equity is an amount of assets when every liability is settled and listed in the balance sheet. Common stock, contributed surplus, treasury stock, common and preferred stocks, other extensive earnings, etc., come under this account type. When we consider the nature of equity, it will come under Asset type. The equity will be directly proportional to the invested money. That means equity will increase when any investor invests money in that. As a result, the capital account will be credited with the increased equity.

12. Current year earnings

The ‘Current Year Yearning” account type belongs to the equity-based account type that represents the net profit and loss for the current fiscal year for balance sheet purposes. If the sales or any other transaction has impacted on the income and expense account, the current year's earnings will also be affected. This will also be listed in the balance sheet.

13. Income & Other Income

The Income & Other Income account type is very beneficial for the business to demonstrate company’s income or revenue. The account's nature is income, which will be recorded under the profit and loss reports. The profit from the company's core business activities (selling of products and services) is considered as the Income, and the other income is not the direct revenues. Examples of other income are the interest amount, rent amount, etc.

14. Expenses

Expenses accounts are the account types that record all the details of the amount an organization expenses on everyday costs during an assigned accounting period. This expense account type includes delivery expenses, income tax expenses, expenses for the production of goods and services, salary expenses, advertising expenses, repairs expenses, promotion expenses, rent expenses, etc. come under this category. The nature of the Expenses accounts type is surely expense, and it will be listed under the income statement/profit and loss report.

15. Depreciation

The Depreciation account types are commonly referred to as the amount that an organization's assets are depreciated for a single period. Normally, this account type is used for recording fixed asset depreciation. In the case of Fixed assets, some depreciation will be noted occasionally, and certainly, the value of fixed assets will decrease in each period. So this type of depreciation will be linear or digressive. Also, there will be a book value and the salvage value at the time of asset creation. The book value stands for the original cost. In the case of Salvage value, it is the amount that the organization will obtain the moment when selling that fixed assets after all the depreciations are expensed. Further, the expense will be divided over a certain period rather than including the overall expenses to the current year based on the depreciation method applied. So the depreciation accounts debit an expense account credit.

16. Cost of Revenue

The cost of revenue is directly related to the direct expenses generated with the goods and services offered by the company. Which means it is the total cost of manufacturing and delivering a product or service to its customers. It is directly associated with the income statement, so it is more comfortable to represent the direct cost related with the goods and services. It includes the manufacturing cost of the product and the cost of delivering them to the customers. The nature of this account type (Cost of revenue) is the expense, and the account type will impact on the gross profit.

Account Ledgers

An Account ledger is nothing but an account or record capable of managing bookkeeping entries for balance sheet and income statement transactions, such as opening and closing balance in debit or credit. This type of book or digital record encompasses bookkeeping entries and detailed transaction information, including routine business operations such as a bank or cash transactions, stock valuation, invoicing customers, vendor invoices records, salary expenses, and many more. The ledgers include all the essential information required for preparing financial statements.

Every transaction has a reference number that will be advantageous to them to determine why and how that specific transaction was done.

Different account ledgers used in Odoo are as follows:

  • Income account
  • Expense account
  • Stock input account
  • Stock output account
  • Stock valuation account
  • Price difference account
  • Account Receivable
  • Account Payable
  • Fixed Asset Account
  • Depreciation Account
  • Revenue Account
  • Deferred revenue account
  • Expense account
  • Deferred Expense Account
  • Suspense Account
  • Outstanding Receipts Account
  • Outstanding Payments Account
  • Transfer Accounts


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