Masters are the containers of the Accounting Data. These are the heads, which will be set once and used in many places such as Accounting Voucher Creation, Reports Generation etc. Data stored in Masters is independent.
Account Masters are the principal Accounting entities representing similar transaction (Account Ledgers) and similar accounts (Account Groups) along which all transaction date are compiled, summarized and balanced, to be reflected in various Accounting Reports &Financial statement ( profit &Loss Account &Balance sheet).
Account Ledger are entities representing similar transactions.
Account Groups are just convenient & systematic grouping of ledger Accounts of similar nature.
Tally automatically creates 28 Reserved Account Groups and 2 Reserved Ledger Accounts.
To maintain inventory system, first, you need to create masters in respect.
Activation & set Up of payroll Features for the company.