Type of account open in ngo account

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Querist : Anonymous

Querist : Anonymous (Querist)

13 December 2012 I am handling NGO account.
But i am confused what type of account name opened for various entry in NGO. Is there any provision for handling ngo account

@VaibhavJ

@VaibhavJ (Expert)
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13 December 2012 Hey

You can open current A/c.

There is no provision under law for handling bank A/c.

Thanks//Vaibhav

Querist : Anonymous

Querist : Anonymous (Querist)

13 December 2012 Bank Account is saving account.
I am asking for the type of ledger account.
For Example if cash is spent on breakfast and dinner exp.But i don't have any supporting bills. How can i entered it on tally and which account has been debited.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Got it! You're asking about the **types of ledger accounts** to be created and used in NGO accounting—especially for expenses like breakfast and dinner without supporting bills.

Here’s a clear guide for NGO accounting ledger heads and how to handle such expenses:

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### 1. **Type of Bank Account for NGO:**

* Usually NGOs open a **Current Account** or **Savings Account** in a bank. There is no special legal restriction; both are fine.

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### 2. **Key Ledger Accounts to Maintain in NGO Books:**

* **Donations Received** (Income)
* **Grants Received** (Income)
* **Program Expenses** (Expense)
* **Administrative Expenses** (Expense)
* **Salaries & Wages**
* **Assets** (like Furniture, Computers)
* **Cash in Hand**
* **Bank Accounts**

---

### 3. **For Miscellaneous Expenses like Breakfast/Dinner without Bills:**

* **Create a ledger named something like "Miscellaneous Expenses" or "Refreshment Expenses"** under the **Indirect Expenses** group or **Expenses** group.
* You can debit this ledger for expenses incurred without supporting bills.
* If you want to be more transparent, you may keep a **Petty Cash Account** and debit these expenses there.
* It’s best to maintain a **Petty Cash Voucher or some internal memo** to record the expense details (date, purpose, amount, person responsible).

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### 4. **In Tally:**

* **Debit:** Miscellaneous Expenses / Refreshment Expenses (under Indirect Expenses)
* **Credit:** Cash/Bank (from where payment is made)

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### 5. **Best Practice:**

* Even if you don’t have formal bills, maintain **written approval or vouchers** for such expenses to maintain transparency.
* Avoid frequent unbilled expenses as it can create audit issues.
* For NGOs, maintaining clear accounts is crucial for audits and compliance.

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If you want, I can help you prepare a sample chart of accounts for your NGO or sample vouchers for such expenses! Would you like that?

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