Account heads, also known as ledger accounts or simply accounts, serve a crucial role in accounting and financial management. They are used to categorize and track financial transactions within an organization. Here's the primary purpose and use of account heads:

1. Categorization of Transactions

2. Financial Reporting

3. Tracking Financial Performance

4. Budgeting and Planning

5. Compliance and Taxation

6. Decision-Making

7. Audit and Internal Controls

In summary, account heads serve as the building blocks of an organization's accounting system, helping to organize, analyze, and report financial data accurately. They are essential for effective financial management, decision-making, and regulatory compliance. 

Step 1: Login to ADDA >> Admin >> General Ledger >> Chart of Accounts.

Step 2: Select the respective option from Asset/Liabilities/Income/Expense for the type of ledger account you want to create.

Step 3: Select the Group from the “Group” list box, Enter account number in “GL Account No.” column next to Group selected.

Note: 

A. “GL Account No” must be unique and should not be entered which is already in use.

B. “GL Account No” should be enter by adding 1 in last highest GL Account No is in use to maintain the sequence and it should not be any random number, Enter account name which need to created under “Account Name” column, While creating ledger account in the nature of “Income” or “Expense”, Please select “Default Bank Account” from list box to associate with respective income or expense ledger account.

Step 4: Once all the required details are entered click on “Create new”.