Definition
An account group is the top level of a coded chart of accounts, such as 1 Assets or 11 Current assets. A group does not receive postings itself; its balance is the total of the accounts beneath it. Groups give the chart its shape and usually map directly to sections of the balance sheet and income statement.
How it works
Groups exist so that reports can be read at different depths. A board pack may show only group totals, while the accountant drills down to the postable accounts underneath. Because group balances are computed, they can never be out of step with the detail.
Number groups so that sorting by code gives statement order: current assets before non-current assets, current liabilities before non-current, revenue before expenses. Leave gaps in the numbering for future groups.
Avoid creating a group for every small category. If a group has only one child account, it usually adds noise rather than structure. See the chart of accounts entry for the full hierarchy.
Example: group levels in a chart
The group 11 Current assets totals three sub-groups, each with its own postable accounts.
| Code | Name | Posts entries? |
|---|---|---|
| 1 | Assets | No (group) |
| 11 | Current assets | No (group) |
| 110 | Cash and cash equivalents | No (group) |
| 1101 | Cash on hand | Yes |