Professional Documents
Culture Documents
Basic Accounting
Basic concept of accounting
Introduction
Accounting is a process of identifying, recording, summarizing and reporting economic information
to decision makers in the form of financial statements. Financial statements will be useful to the
following parties:
Suppliers
Customers
Employees
Banks
Suppliers of equipments, buildings and other assets
Lenders
Owners
Types of Accounts
There are basically three types of Accounts maintained for transactions :
Real Accounts
Personal Accounts
Nominal Accounts
Real Accounts
Real Accounts are Accounts relating to properties and assets, which are owned by the business
concern. Real accounts include tangible and intangible accounts. For example,
Land
Building
Goodwill
Purchases
Cash
Personal Accounts
Personal Accounts are Accounts which relate to persons. Personal Accounts include the following.
Suppliers
Customers
Lenders
Nominal accounts
Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a
business concern. For example,
Salary Account
Dividend Account
Sales
Accounts can be broadly classified under the following four groups.
Assets
Liabilities
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Tally Notes
Income
Expenses
The above classification is the basis for generating various financial statements viz., Balance Sheet,
Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance sheet and the
Income and Expenses accounts are posted to Profit and Loss Account.
Business transaction: A business transaction is “The movement of money and money’s worth from
one person to another”. Or exchange of values between two parties is also known as “Business
Transaction”.
Purchase: A purchase means goods purchased by a businessman from suppliers.
Purchase Return or Rejection in or Outward Invoice: Purchase return means the return of the full or
a part of goods purchased by the businessman to his suppliers.
Sales Return or Rejection out or Inward Invoice: Sales return means the return of the full or a part of
the goods sold by the customer to the businessman.
Assets: Assets are the things and properties possessed by a businessman not for resale but for the
use in the business.
Liabilities: All the amounts payable by a business concern to outsiders are called liabilities.
Creditor: Creditor is the person to whom amounts are owed by the businessman.
Drawings: Drawings are the amounts withdrawn (taken back) by the businessman from his business
for his personal, private and domestic purpose. Drawings may be made in the form cash, goods and
assets of the business.
Receipts: It is a document issued by the receiver of cash to the giver of cash acknowledging the cash
received voucher.
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Tally Notes
Account: Account is a summarized record of all the transactions relating to every person, every thing
or property and every type of service.
Trail Balance: It is a statement of all the ledger account balances prepared at the end of particular
period to verify the accuracy of the entries made in books of accounts.
Profit and loss account: It is prepared to ascertain actual profit or loss of the business.
Balance Sheet: To ascertain the financial position of the business. It is a statement of assets and
liabilities.
Journals
Journal entry is an entry to the journal. Journal is a record that keeps accounting transactions in
chronological order, i.e. as they occur. Ledger is a record that keeps accounting transactions by
accounts. Account is a unit to record and summarize accounting transactions.
When a small business makes a financial transaction, they make a journal entry in their accounting
journal in order to record that transaction. The transaction is recorded in the general journal or one
of the special journals for the most active accounts. The most common special journals are the Sales
Journal, the Purchases Journal, the Cash Receipts Journal, and the Cash Disbursements Journal.
The transactions are listed in chronological order, by amount, by accounts that are affected, and in
what direction those accounts are affected. Depending on the size and complexity of the business, a
reference number can be assigned to each transaction and a note may be attached explaining the
transaction.
The accounting journal is the place where the details lie. The general ledger is where you look for the
big picture. A sample accounting journal page has columns for the date, the account, the amount of
the debit, and the amount of the credit.
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Tally Notes
Cash has come in business; cash account will 4. Goods sold on credit to Dev Raj Rs. 1600
be debited in journal entry.
a) Dev Raj is receiver of goods, so his personal
b) Who is giver will be credited account will be debited.
Proprietor is giver of cash to business but he b) Goods go out, so, goods or sale account will
has business motive and he gives the money be credited.
to business as capital.
Dev Raj Account Debit 1600
Journal Entry
Sale Account Credit 1600
Cash Account Debit 30, 000
5. Goods purchased for cash Rs. 4500
Proprietor’s capital Account Credit 30,000 a) Goods come in, so goods or purchase
account will be debited
2. Goods purchased on credit from Madan
Lal Rs. 5,000 b) Cash goes out, so cash account will be
credited.
a) What comes in business will be debited
Purchase account debit 4500
Goods have come in business, so its financial
value will be debited with the name of Cash account credit 4500
purchase account.
6. Goods sold for cash Rs. 2100
b) Name of person is given from whom we
bought the goods on credit, so Ist rule’s a) Cash comes in, so cash account will be
second part will be applied. debited.
Who is giver, will be credited. b) Goods go out, so goods or sale account will
be credited.
Madan lal is giver, so its account will be
credited. Cash account debit 2100
Madan Lal account credit 5000 7. Rent paid for shop to landlord 3000
3. Furniture purchased for cash Rs. 10000 a) Rent is an item of expenses, so it will be
debited.
a) What comes in business will be debited. In
this transaction, furniture came in business, b) Cash is an item of asset and it goes out, so
so we will open furniture account in the debit it will be credited.
side of journal entry.
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Tally Notes
8. Commission received in cash 2000 12. Goods given as charity Rs. 1000
a) Cash comes in, so cash account will be a) Charity is an expense of business, so it will
debited. be debited.
b) Cash goes out, so cash account will be b) There is decrease in debtor. We are
credited. applying what goes from business, debtor is
also our asset, if he does not pay, and it
Bank Account Debit 5000 means this asset has gone from business, so
its account will be credited.
Cash Account Credit 5000
Bad Debt Account Debit 500
10. Cash withdrawn from bank for office use
Rs. 2000 Debtor Account Credit 500
a) Cash comes in the business, so cash 14. Bad debts recovered in cash Rs. 300
account will be debited.
a) Cash comes in, so cash account will be
b) Bank is the giver, so bank account will be debited.
credited.
b) Bad debts recovered are an income, so its
Cash Account Debit 2000 account will be credited.
11. Cash drawn by proprietor from business Bad Debts Recovered Account Credit 300
for personal use Rs. 3000
15. Carriage paid on machinery ( expenses on
a) Proprietor is the receiver of cash, but purchase of asset ) Rs. 1000
business will give him as drawing which is
decrease in his capital, so proprietor’s a) Carriage on purchase of machinery is part
drawing account will be debited. of cost of machinery, so machinery account
will be debited.
b) Cash goes out, so cash account will be
credited. b) Cash goes out, so cash account will be
credited.
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Tally Notes
Fixed Asset Account Credit 500 Interest on drawing account Credit 500
17. Carriage paid on the behalf of buyer Rs. 21. Bank charges or interest charged by bank
1000 Rs. 200
a) This is not our expenses, but this is increase a) Bank charges are the expenditures of
our current asset and its name is debtor, so business, so it will be debited.
we will apply what comes in rule on it.
b) There is decrease in bank balance, so bank
b) Cash goes out, so cash account will be account will be credited.
credited.
Bank charge Account Debit 200
Debtor account Debit 1000
Bank account Credit 200
Cash Account Credit 1000
18. Goods given as free samples Rs. 1500 22. Goods lost by fire Rs. 800
a) Goods are given for advertising, advertising a) Goods lost by fire are the loss of business,
is an expense of business, and so advertising so loss by fire account will be debited.
account will be debited.
b) There is decrease in goods or stock at cost,
b) Goods go out at the cost price, so goods or so purchase account will be credited.
purchase account will be credited.
Loss by Fire Account Debit 800
Advertising Account Debit 1500
Purchase Account Credit 800
Purchase Account Credit 1500
23. Goods insured and a claim is admitted by
19. Interest allowed on capital Rs. 600 insurance company in full or in part.
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Tally Notes
Loss by Fire Account Credit XXXX 28. Cash stolen from office. Rs. 6000
24. Loan taken Rs. 1,00,000 a) Cash stolen from office is loss of business,
so this account will be debited.
a) Cash comes in, so cash account will be
debited. b) Cash goes out, so its account will be
credited.
b) Lender is giver, so his loan account will be
credited. Loss by Theft Account Debit 6000
26. Interest on loan due but not paid in cash. Madan Lal Account Debit 5000
Rs. 500
Cash Account Credit 4950
a) Interest is an expense of business, so it will
be debited. Discount Received Account Credit 50
b) Increase in creditors will be credited in 30. Cash received from a debtor in full
journal entry. settlement (When cash discount is allowed).
Amount receivable from Dev Raj Rs. 1600,
Interest on loan Account Debit 500 received from him Rs. 1570.
27. Investment purchased Rs. 50,000 b) Discount allowed is the loss of business =
Debit
a) Asset in the form of investment comes in,
so investment account will be debited. c) Decrease in debtors = credit
b) Cash goes out, so its account will be Cash Account Debit 1570
credited.
Discount Allowed Account Debit 30
Investment Account Debit 50000
Dev Raj Account Credit 1600
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Tally Notes
Introduction to Tally
Tally is a Financial and Inventory Management System. Tally is one of the acclaimed Accounting
Software with large user base in India and abroad, which is continuously growing. Tally is developed
in India using Tally Development Language (TDL).
Features of Tally
Company Creation
From the Gateway of Tally click on F3: Cmp Info from the right side panel or press ALT+F3.
From the Company Info, click on “Create Company”
Specify the path where the company file should be stored in your computer. By default
Directory
C:\Tally\Data is the path taken
Name Enter your company name
Mailing Name Enter your company name for mailing purpose
Enter Company address
Address
This address will display all your tally printout statement
Statutory compliance Select the country in which your business exists. It is used for tax calculation for country
for wise
State Select your state
PIN Code Enter your company area PIN Code
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Tally Notes
Meaning of Ledger
Ledger in tally
Classification of similar transactions under a particular head is known as Ledger. Here in tally, ledger
is an accounting head, which is used to enter a transaction and also to identify the same in the
reports. Cash account and profit & loss account are the two predefined ledgers available in tally. The
other required ledgers can be created by the user. All the ledger are classified under the various
groups. The user has to identify the ledger and create it under the appropriate accounting group.
For example: Rent paid by cash, Rent account is debited and cash account is credited. In this
transaction, there are two ledger account viz., Rent account and Cash account. In book keeping all
the ledger accounts are primarily classified under four heads namely assets, liabilities, expenses and
incomes.
In tally, accounting ledgers can be created using accounts information menu which is available in
Gateway of Tally. An accounting ledger can also be displayed or altered using accounts information
menu. “Create” helps to create a new ledger, “Display” to view a ledger which is existing already but
need not be modified. “Alter” helps to make changes in an existing ledger account.
Ledgers can be deleted in the alteration menu by using the short cut key 'ALT+D', but deletion of a
ledger is not possible if transactions have been recorded in it. Every ledger should be unique in its
nomenclature; else Tally gives duplication warning and also will not accept the ledger creation.
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Tally Notes
A ledger is an accounting book that facilitates the transfer of all journal entries in a chronological
sequence to individual accounts. The process of recording journal entries into the ledger is called
posting.
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Tally Notes
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Tally Notes
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Tally Notes
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Tally Notes
1. Capital Account
This holds the Capital and Reserves of the company. Examples of ledgers that may be opened under
this group are Share Capital, Partners' Capital A/c, Proprietor's Capital Account.
Reserves and Surplus [Retained Earnings]
Open ledgers like Capital Reserve, General Reserve, Reserve for Depreciation, etc.
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Tally Notes
2. Current Assets
Directly under Current Assets, you may find place for assets that do not fall under the following sub
groups:
Bank Accounts
For Current, savings, short term deposit accounts, etc.
Cash-in hand
Tally automatically opens one Cash A/c under this group. You are permitted to open more cash
accounts, if necessary.
Note: An account under Cash-in-hand group or Bank Accounts/Bank OCC A/c group is printed as
separate Cash Book in the traditional Cash Book format and does not form part of the Ledger.
Deposits (Asset)
In essence, a place for Fixed Deposits, Security Deposits, or any deposit made by the company (not
received by the company, which is a liability).
Non-integrated Accounts-cum-Inventory
Accounts that fall under this group are not permitted any transactions. It allows you to hold opening
and closing balances only. Since no vouchers can be passed for these accounts, they are the only
accounts for which the closing balances can be directly altered (by an authorised user only)
Sundry Debtors
For your customer accounts. Do not open them under the Sales Account group, which is a revenue
account. For more information on common and possible errors in grouping of accounts, please refer
below to the separate paragraph on the topic.
3. Current Liabilities
You may open accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities
directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and
Sundry Creditors
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Tally Notes
For all tax accounts like VAT, MODVAT, Excise, Sales and other trade taxes. A convenient place to
find the total liability (or asset in case of advances paid), as well as the break-up of individual items.
Provisions
For provision accounts like Provision for Taxation, Provision for Depreciation, etc.
Sundry Creditors
For trade creditors of the company. Do not open your supplier accounts under the Purchases
Account group, which is a revenue account. For more information on common and possible errors in
grouping of accounts, please refer below to the separate paragraph on the topic.
4. Investments
To group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term
Bank deposit accounts, etc. A convenient place to view the total investments made by the company.
5. Loans (Liability)
Tally gives two distinct types of Bank Accounts, The Bank OCC A/c is meant to record the company's
overdraft accounts with banks. e.g., Bill Discounted A/cs, Hypothecation A/cs etc.
Note: An account under Bank OCC A/c group is printed as separate Cash Book in the traditional Cash
Book format and does not form part of the Ledger.
Secured Loans
For term loans and other long/medium term loans that have been obtained against security of some
asset. Tally does not verify the existence of the security. Typical accounts would be Debentures,
Term Loans, etc.
Unsecured Loans
For loans obtained without any security .e.g., Loans from Directors/partners or outside
parties.
6. Suspense Account
Theoretically speaking, this group should not exist. However, in modern accounting, many large
corporations use a Suspense Ledger to track moneys paid or recovered, the nature of which is not
yet known. The most common example is money paid for Travelling Advance whose details would be
known only upon submission of the TA bill. Some companies may prefer to open such accounts
under
Please note that Suspense Account is a Balance Sheet item. Any expense account even if it has
'suspense' in its name, should be opened under a Revenue group like Indirect Expenses and not
under Suspense Account group.
This group is typically used more for legal disclosure requirements, like Schedule VI of the Indian
Companies Act. It should hold incorporation and pre-operative expenses. Companies would write off
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Tally Notes
a permissible portion of the account every year. A balance would remain to the extent not written
off in Profit & Loss Account. Tally does not, however, show a loss, carried forward in the Profit & Loss
Account, under this group. The Profit & Loss Account balance is shown separately in the Balance
Sheet.
8. Branch/Divisions
This group is provided to keep the ledger accounts of all companies that are your company's
branches, divisions, affiliates, sister concerns, subsidiaries, etc. This is a group of convenience. You
may not wish to utilise it in this manner. Note that Tally permits Sales and Purchase transactions to
take place with accounts opened here. Remember, these are their accounts in your books and not
their books of accounts. Just treat them as you would any party account. If you wish to maintain the
books of that branch/division on you computer, you must open a separate company. (Tally allows
maintenance of multiple company accounts).
9. Sales Account
For different sales accounts. The natural segregation of your sales accounts could be based on Tax
slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns.
You may even open an account Sales Returns under the group Domestic Sales to view your net sales
after returns (or the returns may be directly passed through journal against the specific sales
account). Please do not open customer accounts under this group. For more details on possible
errors in this regard, please refer to the paragraph given below.
This is similar to sales accounts, except for the purpose of the transaction.
For non-trade income accounts that affect Gross Profit. All trade income accounts would naturally
fall under Sales Accounts. You may wish to use this group for accounts like Servicing Contract
Charges that follow sales of equipment. If yours is a professional services company, you may not use
the Sales Account group at all. Instead, open accounts like Professional Fees under this group.
For miscellaneous non-sale income accounts, e.g., Rent Received and Interest Received.
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Tally Notes
For manufacturing or direct trading expenses. These accounts determine the Gross Profit of the
company. the Profit & Loss Account which is a reserved primary account. You may use this account
to pass adjustment entries through journal vouchers .e.g., transfer of profit or loss to Capital or
Reserve account.
Cost Centre
A cost centre is a unit of an organization to which transactions can be allocated. Cost Centers are
units to which costs or expenses are allocated and Profit Centers are units to which incomes are
allocated. Tally.ERP 9's cost centres allow a dimensional analysis of financial information. Tally.ERP 9
gives you the cost centre break-up of each transaction as well as details of transactions for each cost
centre.
Cost Categories
Cost Categories have been introduced specially for project oriented organisations as they require
allocation of resources to parallel sets of cost centres. For example, the project is to construct an
airport. The airport is the cost centre. For this project certain expenses are incurred by the project
head. A simultaneous allocation of the amount has to be made for both the project and the project
head. This requirement can be achieved using Tally.ERP 9's Cost Category feature. Any number of
parallel allocations can be done as per requirements.
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Tally Notes
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Tally Notes
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Tally Notes
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Tally Notes
Budgets
Tally allows you to create multiple budgets. There could be a budget for specific purposes, e.g., for
the bank, for the head office, optimistic budget, realistic budget, pessimistic budget, etc.
Departmental Budgets can also be created, e.g., Marketing Budget, Finance Budget, etc. As usual,
you first create budgets. You can of course alter them. Budget figures are used to compare against
actuals and to display variances. This is done by bringing up a new column when displaying a
statement and selecting the appropriate budget. We shall now go through the creation and
alteration of budgets.
Alter a Budget
Accts Info. > Budgets > Select the budget to alter
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Tally Notes
If you select to alter the Corporate Budget of Groups of ledger accounts, say Yes to 'Set / Alter
Budgets of Groups'. The default is No. The same sub-screen for Group Budget pops up for alteration
of the figures. Alter necessary fields and accept.
Delete a Budget
From the Menu Go to Alter select the Budget and Press [ALT]+[D] to delete it.
Budget Variance
The Trial Balance and Group Summaries carry an additional 'Budget Variance' button
(Alt+B) which is active if Budgets are active and at least one budget exists. Pressing this button will
create an automatic display of Budgets, Actuals with Percentage, Variance from budget with
Percentage in three columns. This is a first-step offering of the facility and is being fine-tuned to
enhance its range and diversity of options which you should see shortly.
Inventory Information
The different inventory information that you would provide to Tally by way of
masters are:
Like Ledgers, Stock items are the primary inventory entity. You will use stock items while recording
their receipts and issues. This is lowest level of information about your inventory. Each item that is
required to be accounted for, needs to be created. In fact, you will create a stock ledger account for
each item and Tally calls this account 'Stock Item'.
Stock Groups
Stock items can be grouped together under Stock Groups to reflect their classification based on
some commonality. Grouping would enable easy location and reporting of stock items in statements.
Hence, items of a particular brand can be grouped together so that you can extract stock of all items
of that brand. For example, create Stock Groups like Sony, Maxell, Verbatim. Your stock items could
then be Sony 3.5" disks, Maxell 3.5" disks, Sony tapes, Maxell tapes, etc. Classify the Sony products
under the Stock Group Sony. Now you have ready details of all Sony products suitably classified. You
may even group items as Raw materials and Finished Goods. You can create sub-groups of Stock
Groups for deeper analysis.
Stock Categories
The concept is similar to Cost Categories. You may wish to refer to the Chapter on Cost
Categories to grasp the similarity/differences.
This option will come up in the menu only if you have opted for stock categories in [F11]
Comp. Features.
Stock Categories offers parallel classification of items. You may create Stock Categories like Floppy
Disks and Floppy Drives. In the above example in Stock Groups, you would know how many Sony
3.5" floppies are in stock and separately, the stocks of Maxell floppies. You would also know from
the Sony stock group the stock of all Sony items. However, should you require information like total
stock of floppy disks or alternative items that could be used, these would be best available through
Stock Categories. If you classify both Sony 3.5" diskettes and Maxell 3.5" diskettes under the Stock
Category Floppy Disks, you know your total stock of floppy disks. Since the items are substitutes of
each other, if one is out of stock, you can offer the other of the same category.
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Tally Notes
Note: The Stock Query option under Statements of Inventory Display will reveal the strength of this
feature.
Note: You should configure inventory info using [F12] and [F11] to select only those
features that you need. Try not to select features that you do not need.
Stock Groups
Gateway of Tally > Inventory Info > Stock Groups
The concept of stock groups has been explained above. Before we consider stock groups you would
need to know about stock items. Like Ledgers, Stock items are the primary inventory entity. You will
use stock items while recording their receipts and issues. This is lowest level of information about
your inventory. Each item which you want to account for, needs to be created. In fact, you will
create a stock ledger account for each item and Tally calls this account 'Stock Item'. Stock items can
be grouped together under Stock Groups to reflect their classification based on of some
commonality. Grouping would enable easy location and reporting of stock items in statements.
Hence, items of a particular brand can be grouped together so that you can extract stock of all items
of that brand. For example, create Stock Groups like Sony, Maxell, Verbatim. Your stock items could
then be Sony 3.5" disks, Maxell 3.5" disks, Sony tapes, Maxell tapes, etc. Classify the Sony products
under the Stock Group Sony. Now you have ready details of all Sony products suitably classified. You
may even group items as Raw materials and Finished Goods. You can create sub groups of Stock
Groups for deeper analysis
This really pertains to information on the stock items that you would create under this stock group –
Sony in this case. The stock items created under the group should have similar units to be 'addable'.
You obviously would not want to add Kgs with Pcs (where you have a group like 'Consumables' and
items like 'grease' and 'rag cloth' which are measured in kg and metres respectively). We select Yes
here because we want to create items like floppy disks and disk drives etc which at this point we feel
would be addable and the total meaningful. You may later set it to No, if you find that the totals do
not make sense. It is, possibly, easier to set it to No initially and later set it to Yes on assessing the
item units in the group.
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Tally Notes
Vch Types
Units
Currency
You may switch to these master types to create them. Currency & Budget option are
activated only when you have opted for the same in [F11]:Company Features.
Gateway of Tally > Accounting Vouchers > selecting F4: Contra > displays the
Contra voucher entry screen. As per accounting rules, Contra Entry is a transaction
indicating transfer of funds from:
1. Cash account to Bank account
2. Bank account to Cash account
3. Bank account to Bank account
Contra Entry screen appears in the Single Entry Mode by default. You are prompted to choose the
account, which will receive the amount (the debit ledger).
For example, you wish to transfer of funds from Cash Account into Bank Account – you
will debit the Bank Account and credit the Cash Account > the entry appears as:
The ledger selected in "Account" (State Bank of India) is the destination ledger – debited.
Important:
1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally.
2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!
Gateway of Tally > Accounting Vouchers > selecting F5: Payment > displays the
Payment voucher entry screen. Payment transactions can be entered using Tally's
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Tally Notes
Payment Voucher.
The Payment Entry screen appears in Single Entry Mode by default (as the option "Use
Single Entry mode for Pymt/Rcpt/Contra" is set to YES > in F12: Configure from
Payment Voucher).
For example, the company settles expenses of conveyance, staff welfare, postage and
stationery through cash – all in one voucher. The entry is displayed as:
You are prompted to choose the cash or bank ledger, which will pay the amount (the
credit ledger).
In Double entry mode – you can select multiple debit and credit ledgers. To do so on the Payment
voucher screen, click on F12: Configure and set the option "Use Single Entry Mode for
Payment/Receipt/Contra" to NO. The entry displayed in Single Mode appears in
1. You can select any number of ledgers to be debited and credited in the payment voucher.
2. You can view on screen whether a ledger has been debited or credited – thereby enabling you to
cross-verify.
In Payment transaction - Single and Double entry modes – you viewed the vouchers with common
narration – where the narration details are given for the entire voucher at the end.
However, if you want the narration details for every ledger you debit or credit (Single narration) –
you can configure Tally's Narration details accordingly. To do so > from Gateway of Tally > Accounts
Information > Voucher Types > Alter > select the required Voucher Type and activate the option
Narrations for each Entry and accept the details.
Return to Accounting Vouchers on Gateway of Tally and enter a payment voucher as required. Given
below is an example of a Payment transaction with narrations for each entry:
The entry consists of both common narration and narrations for each entry – the advantage being in
case of multiple debit / credit entries - you can give single line narration separately - for every ledger
account selected.
Transactions accounting for money received are entered into Tally through the receipt voucher.
For example, your company receives money from a customer for an earlier transaction.
The customer account has to be credited and if cash is received – debit the cash account.
If cheque is received debit the bank account where you will deposit the money received.
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Tally Notes
On the Receipt entry screen, access F12: Configure -> activate the option "Use
Payment/Receipt as Contra" – the behaviour is similar to that of Payment entry as Contra.
Important:
1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally.
2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!
Journal entries are used in instances where the company requires to adjust the debit and
credit amounts without involving the cash or bank accounts. Hence, they are referred to
as adjustment entries.
For example, there may be entries made for interest accrued or interest to be paid. If a party is
involved in such a transaction – the entry will be
Dr Party
Cr Interest Account
Important:
1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally.
2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!
In addition to the above particulars that are applicable for all types of vouchers, sales and purchase
vouchers have special inventory considerations for accounts-with inventory companies. Sales and
Purchase ledger accounts must have the option 'Are Inventory Values Affected' set to Yes for this
section.
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Tally Notes
Gateway of Tally > Accounting Vouchers > selecting F8, Tally displays the Sales
Invoice screen. The Invoice mode is default. To enter details of sale transactions – use
Tally's Sales entry (F8 – in Accounting Vouchers).
Invoicing or sales invoicing is not very different from sales voucher entry. The advantage of using the
invoice format for sales invoice entry is that, automatic calculations of taxes and duties (ledger
accounts classified under the group 'Duties & Taxes') is possible. The default Sales Invoice screen
appears as:
Tally prompts for the Sales Ledger to be allocated to - at the beginning of the entry. There after, any
number of stock items or account ledgers can be selected one after another – enabling faster data
entry. This is possible as the option Use Common Ledger A/c for Item Allocation in F12: Configure
on the invoice entry screen is set to YES (by default)
Journal entries are used in instances where the company requires to adjust the debit and
credit amounts without involving the cash or bank accounts. Hence, they are referred to
as adjustment entries.
For example, there may be entries made for interest accrued or interest to be paid. If a
party is involved in such a transaction – the entry will be
Dr Party
Cr Interest Account
Important:
1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally.
2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!
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Tally Notes
Unless you have Tracking numbers activated in F11:Company Features, the Goods In Receipt Note
and Goods Out Delivery Note vouchers will not be activated. Tally will assume that goods are
received along with Purchase Vouchers and Goods are delivered along with Sales Vouchers/Invoices.
When Tracking Numbers are activated, you inform Tally that you may receive goods that are not
accompanied by Supplier's invoice – the invoice will arrive separately. Also that you may not deliver
goods together with your invoice – you may invoice later.
Note: You are allowed, however, in a voucher, to select 'Not Applicable' when the
Tracking Number sub-screen comes up. This would update inventory right away without the need to
pass a separate inventory voucher. The vice-versa is also true. See Advanced voucher entry for more
details.
You can alter these vouchers to suit your company, as well as create new ones. For example, if you
wish to distinguish between delivery notes for stock delivered from different locations, you can
create vouchers to do this. The function of each voucher type is now explained.
For recording goods received. For example, the company receives new stock from a supplier. If a
Purchase Order exists for that Supplier, selecting it will bring up the order particulars.
For recording goods delivered to a customer. For example, the company delivers goods from stock to
a customer. If a Sales Order exists for that customer, selecting the appropriate Sales Order will bring
up the relevant particulars.
For recording stock transfers from one location to another. For example, the company transfers
items of stock from the warehouse to the shop.
For recording actual stock as physically verified or counted. For example, stock found on conducting
a stock-check. It is not unusual that the company finds a discrepancy between
the actual stock and the computer stock figure. If you have configured your inventory
vouchers to Ignore physical stock differences, these physical stock vouchers will really be
for recording purposes only.
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Tally Notes
A stock journal is used to transfer materials or stock from one location to another location.
Stocks could even simply be shown as consumed. Or even only produced without both
consumption and production. Hence, it is not like other journal where debits and credits
must match.
You can specify quantities that are move as well as their rates and amounts. If standard
rates have been entered in the stock item masters, they will appear. In the target location,
you can specify additional costs incurred without actually affecting accounting at all. Only
the stock value goes up. Hence, it is technically correct where an expense incurred on
production or inward has been accounting for in the cost of that item.
The Stock Journal Screen has three parts – the top part accepts general information,
the left hand side is the Source location or Consumption Part and the right hand side is
the Destination location or the Production Part. While you must furnish the common
information required in the top part, you may elect to give information for only the left or
the right part or both.
Purchase Order details will also depend on configuration settings. Hence, have a look at
the configuration and voucher types.
Gateway of Tally > Voucher Entry > F9:Purchase > Select Purchase Order
Party's A/c Name
Give the supplier's name. Type in the same manner as voucher entry and select from list
of Ledger Accounts. Use [alt]+[C] to create a new account.
Order No
The voucher number can be treated as your Purchase Order number. You may configure
the voucher type through Acct. Info > Voucher Types to set prefixes and suffixes for
Purchase Orders. This particular Order No. field is an additional field to record order
number if different from the voucher number.
Give the name of the stock item for which the order is to be placed. Once the name is
given the Item Allocations sub-screen pops-up that needs to be filled in.
Due on
The due date for delivery of the item. This will enable monitoring of outstanding deliveries.
The order can be split for delivery on different dates.
Location
In case multiple location feature is active, this field is required to be given, else it does not
appear.
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Tally Notes
Give the quantity of the item required, and its rate. The amount is calculated but is
modifiable to enable rounding off.
Additional cost on the item may be incurred which can be mentioned here. Give by way
of percentage of the item cost or a flat amount. If not, select End of List. Additional costs
increase the value of the item and do not independently appear in the nominal ledger
account or expense.
Next Item
The cursor then comes to the Item field once again and you can enter another item to
order. If no other item is required, press [enter] on the blank field to take the cursor to the
tax/expense field.
Expense/Tax
Once the item details have been entered, you might specify tax to be charged and other
expenses like freight, if any. The tax or expense has to exist as a ledger account or it may
be created using [alt]+[C]. We shall select tax @ 17.5% to be charged on the item
values. The order entry screen would then appear thus:
Narration
Gateway of Tally > Voucher Entry > F8:Sales > Select Sales Order
Party's A/c Name
Give the customer's name. Type in the same manner as voucher entry and select from
list of Ledger Accounts. Use [alt]+[C] to create a new account.
Order No
The voucher number can be treated as your internal serialised order number. The field
Order No. is advised to be used for the customer's order number.
Give the name of the stock item for which the order is to be placed. Once the name is
given the Item Allocations sub-screen pops-up that needs to be filled in.
Due on
The due date for delivery of the item. This will enable monitoring of outstanding deliveries.
31
Tally Notes
Location
In case multiple location feature is active, this field is required to be given, else it does
not appear.
Give the quantity of the item required, and its rate. The amount is calculated but is
modifiable to enable rounding off.
There is no additional cost details for sales orders. They exist only for Purchases as the
values are added to the cost price. In case of sales, additional cost need to be entered
below the line along with tax.
Next Item
The cursor then comes to the Item field once again and you can enter another item to
order. If no other item is required, press [enter] on the blank field to take the cursor to the
tax/expense field.
Expense/Tax
Once the item details have been entered, you might specify tax to be charged and other
expenses like freight, if any. The tax or expense has to exist as a ledger account or it may
be created using [alt]+[C]. We shall select tax @ 17.5% to be charged on the item
values. The order entry screen would then appear thus:
Narration
32