Account head refers to the name of an account. Every transaction in a business organization has a name, just like a person, place, or book. A business man uses account heads to categorize these transactions. For instance, conveyance expenses are often incurred multiple times and are recorded under the Conveyance Expenses A/c. The same applies to cash transactions, which are recorded under Cash A/c.
In addition to the general list of account heads, accounting heads may have specific accounts. This list is commonly used by businesses of all sizes, but special ones may be prepared based on the type of business being conducted. For example, a company doing business in a foreign country may not need a Custom Duty A/c. However, a business dealing in exports would have a Custom Duty A/c. A special account head is used for different types of business, and each one has its own purpose.