Nature of account is to be selected while creating an account. Nature of account determines that the account will be shown at which places and its treatment in Profit and Loss Account or Balance sheet.
Suppose you had created a Bank account and entered some payment transaction in it. And then you want to change its nature to debtor. If we will allow you to do this then old transaction get impacted and your whole accounting can become a mess.
Therefore, we need to restrict the user regarding the change in nature of account. If the account is not used in any transaction and also not used in settings as default account, then there is no restriction and you can change nature of account freely. But if you have used such account then you can change the nature of account only to the same group.
The restriction is regarding nature of account only and you can change the opening balance, GST rate etc any number of times.
Nature of account has been grouped as below
1st Group – Bank, Bank o/d, Cash
2nd Group -Debtors, Creditors
3rd Group – Direct Expense, Direct Income, Indirect Expense, Indirect Income
4th Group – Current Assets, Current Liabilities, Deposits- Asset, Fixed Assets, Investments, Loan and Advances – Assets, Misc Assets, Misc Liabilities, Provisions, Secured Loan, Unsecured Loan
5th Group – Capital, Reserves
Sales, purchases, suspense, duties and taxes and stock account can not be changed once created.