Account head is like the name of person, place or books etc. As we know that lots of transactions take place in a business organization. Now question arises how to recognize those transactions in some definite terms? To recognize the various transactions, the account heads are created. Account head is a name under which particular types of transactions are recorded. For example: conveyance expenses incurred by so many persons and so many times, in this case all the transaction will be booked under the head, called as Conveyance Expenses A/c . Likewise all the transactions related to cash will under Cash A/c and so on. In a business organization each and every transaction is called with some designated name.

Suppose, if we put all expenditures under on account head i.e expenditure account and all incomes under one account head i.e.  income account then it is not possible for the business man to know the detailed information of the expenditures and incomes. To segregate these expenditures, incomes, liabilities and assets in different heads as per the requirement of the company and other related persons, some names are given to the business transactions according to the nature of transaction. These names, allotted to the business transactions, are called the account heads.

Though, the maximum account heads are common in all type of business organizations but certain special account heads can be prepared according to the nature of business of the company. For example a company who is not dealing with foreign countries does not have account head like custom duty because it is not importing or exporting any thing while a company which deals in export or import definitely will have the account head as Custom Duty A/c.

While creating the account heads, the most important point must be noted that the account head should not be objectionable nature. The account head must be short and easy to understand. Account head should be created in such a manner so that the name of account head may explain the nature of the transaction itself as far as possible.

I shall give some following account heads which are commonly used in all organizations:-

  • ADVERTISEMENT AND PUBLICITY EXP.
  • BANK CHARGES
  • BUSINESS PROMOTION EXPENSES OR SALES PROMOTION EXPENSES
  • CARTAGE INWARD EXPENSES
  • CARTAGE OUTWARD EXPENSES
  • CONVEYANCE EXPENSES
  • DEPRECIATION ACCOUNT
  • ELECTRICITY & WATER EXPENSES
  • FURNITURE ACCOUNT
  • GENERAL EXPENSES
  • HOUSE RENT ALLOWANCE
  • INSURANCE EXPENSES
  • LAND AND BUILDING ACCOUNT
  • MACHINERY ACCOUNT
  • COMPUTER ACCOUNT
  • VEHICLE ACCOUNT
  • OFFICE EQUIPMENT ACCOUNT
  • OFFICE MAINTENANCE EXPENSES ACCOUNT
  • REPAIR & MAINTENANCE EXPENSES ACCOUNT
  • CASH ACCOUNT
  • BANK ACCOUNT (GIVE THE NAME OF BANK)
  • MISCELLANEOUS EXPENSES
  • EXCESS & SHORT EXPENSES
  • PRINTING & STATIONERY EXPENSES
  • POSTAGE/COURIER EXPENSES
  • VEHICLE MAINTENANCE EXPENSES
  • TRAVELING EXPENSES
  • STAFF WELFARE EXPENSES
  • LOANS TO STAFF
  • SALARY ACCOUNT
  • WAGES ACCOUNT
  • PURCHASE ACCOUNT
  • SALES ACCOUNT
  • PACKING CHARGES
  • RENT ACCOUNT
  • SALES TAX OR VAT ACCOUNT
  • ADVANCE INCOME TAX ACCOUNT
  • SELF ASSESSMENT TAX ACCOUNT
  • EXCISE DUTY ACCOUNT
  • CUSTOM DUTY ACCOUNT
  • CAPITAL ACCOUNT
  • DIRECTOR’S REMUNERATION ACCOUNT
  • DISCOUNT GIVEN ACCOUNT
  • DISCOUNT RECEIVED ACCOUNT
  • CASH DISCOUNT ACCOUNT

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