Account group

What it means

An account group is the two-digit level of the Slovak chart of accounts that brings together related accounts within one account class. The first digit denotes the class and the second the group. For example, group 21 covers cash, 22 bank accounts and 52 personnel costs.

For businesses using double-entry bookkeeping, the chart of accounts is binding at the level of classes and groups. A company cannot invent its own groups, but within them it sets up synthetic accounts with three-digit numbers, which usually follow the recommended structure.

Groups keep accounting clear and comparable across companies. When an accountant sees an account beginning with 34, they know it concerns tax settlements, and 60 means revenue from own products and goods, regardless of which company they work for.

How it works in practice

When drawing up its company chart of accounts, a business selects the accounts it needs from the groups and creates sub-accounts to suit its needs. In group 22, for example, it may have separate sub-accounts for each bank account, and in group 51 for different types of services.

Groups in classes 0 to 4 are balance sheet accounts whose balances carry into the next year. Groups in classes 5 and 6 capture costs and revenues, which are closed at year-end through the profit and loss account. Class 7 contains closing and off-balance sheet accounts.

The grouping is directly linked to the lines of the financial statements. The balance sheet and the profit and loss statement in the prescribed format are compiled from the balances and turnovers of specific groups, so classifying transactions correctly makes preparing the statements easier.

What to watch out for

Posting a transaction to the wrong group, such as booking a capital improvement as a repair in group 51 instead of as an asset acquisition, distorts both the result and the balance sheet. Such errors often surface only during an audit or inspection.

The chart of accounts changes from time to time, for example when the regulation on accounting procedures is amended. When it does, the company should check that its own chart still matches the current one and update the account list in its software if needed.