Type of account open in ngo account

This query is : Resolved

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)
Follow

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)
Follow

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:

---

### 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.

---

### 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).

---

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

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

---

### 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.

---

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?

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now