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TALLY EXERCISE 1.1
1. ClassiIy The Iollowing into Income, Expenditure, Assets and Liabilities (Put Tick
mark in the appropriate column)

Income Expenditure Asset Liability
1 Cash in Hand
2 Salaries
3 Wages
4 Rent paid
5 Land
6 Buildings
7 Bank Balance
8 Over draIt
9 Traveling
10 Dividend received
11 Interest paid
12 Sundry Debtors
13 Sundry Creditors
14 Loans and Advances (dr)
15 Capital
16 Reserves and Surplus
17 Income tax
18 Provisions
19 Bills Receivable
20 Furniture and Fittings
21 Indian Bank Deposits
22 Printing and Stationery
23 Telephones bills
24 Computer
25 Scooter

2.ClassiIy The Iollowing into Income, Expenditure, Assets and Liabilities (Put Tick mark
in the appropriate column)
Income Expenditure Asset Liability
1 Cash at Bank
2 Factory Rent
3 Lighting
4 Interest paid
5 Tools
6 Furniture
7 Bank Balance
8 Over draIt
9 Bills Payable
10 Dividend earned
11 Interest paid
12 Sundry Debtors
13 Sundry Creditors
14 Loans and Advances (dr)
15 Sheeja Capital
16 Provisions and Reserves
17 Sales tax
18 Land and Buildings
19 Bills Receivable
20 Fittings
21 IOB Deposits
22 Pooja Expenses
23 Telephones bills
24 Computer
25 Van

TALLY EXERCISE 1.2
1.Find the nature oI the Iollowing entries (Please put tick mark in the appropriate
column)
RECEIPT PAYMENT CONTRA
1 Electricity bill paid
2 Wages paid
3 Interest received
4 Discount allowed
5 Purchases
6 Sales
7 Furniture purchased
8 Scooter purchased
9 Computer Purchased
10 Salaries paid
11 Telephone expenses
12 Dividend income
13 Amount deposited into IOB
14 Money transIerred Irom IOB
TO Indian Bank

15 Amount received Irom Sundry
Debtors

16 Amount paid to creditors
17 Money deposited into Canara
Bank

18 Money transIerred Irom Canara
bank to Indian Bank

19 Machinery purchased
20 Loan amount received Irom
Raman

TALLY Exercise 1.3
1. Prepare Trial balance oI MM Associates :
Balances Amount (Rs.)
Capital 50000
Cash 15760
Bank 12800
Purchases 27100
Sales 27000
Furniture 15000
I Opening stock 1800
Brokerage 40
Typewriter 2100
Rent paid 1000
Salary Account 1500
Return inwards 100
Return outwards 1100
Debtors 4400
Travelling 100
Sundry Creditors 4200
Discount allowed 100
Telephone 500

2. Prepare Trial Balance Ior the Iollowing balances taken Irom the books oI MM Traders:
Balances Amount (Rs.)
Capital 40000
Creditors 13000
Salaries 7200
Bills Receivable 15800
Bills Payable 8700
Debtors 28000
Sales 144000
Insurance 1200
Miscellaneous Expenses 600
Land and Buildings 23000
Discount paid 900
Commission received 800
Sales returns 3400
Purchase returns 2400
Carriage inwards 1400
Purchases 97500
Stock Opening 29900

3. Prepare the trial balance Ior the Iollowing balances taken Irom the books oI MM Agency.
Balances Amount (Rs.)
Opening stock 9300
Repairs 310
Machinery 12670
Furniture 1330
OIIice Expenses 750
Trading Expenses 310
Land and Buildings 15400
Bank Charges 50
Mis. Income 200
Purchases 15450
Purchase Returns 440
Sales Returns 120
Sundry Creditors 12370
Advertisement 500
Cash in Hand 160
Cash at Bank 5870
Sales 20560
Sundry Expenses 150
Insurance 500
Travelling Expenses 200
Capital 24500
Loan 5000

4. Prepare Trial Balance Ior the Iollowing balances taken Irom the books MM General
Merchants:
Balances Amount (Rs.)
Capital 180000
Drawings 3200
Opening Stock 9000
Purchases 64500
Sales Returns 2000
Sales 119000
Wages 16000
Insurance paid 1500
Duty paid 10,000
Packing expenses 2000
Carriage outwards 8000
Postage 100
Advertisement 1000
Miscellaneous expenses 300
Discount received 500
Bills Payable 9000
Bank over draIt 3000
Land 90000
Plant 70000
Furniture 1000
Debtors 25400
Creditors 42000
Cash 40500
Deposits 9000

TALLY EXERCISE 1.4
(1)
(a) Journalise the Iollowing transactions:
1. Malini started business with Rs.50,000
2. Opened current account with Indian overseas Bank with Rs.5,000
3. Bought goods Irom Latha Rs.40,000
4. Paid to Latha Rs.25,000
5. Sold goods to Kumar Rs.36,000
6. Kumars account was settled .

(b)Write the above entries in the Iollowing manner:
Account to Debited Account to be credited
Malini started business with Rs.50,000
Opened current account with Indian overseas
Bank with Rs.5,000

Bought goods Irom Latha Rs.40,000
Paid to Latha Rs.25,000
Sold goods to Kumar Rs.36,000
Kumars account was settled .
(c)List the ledger accounts to be opened Ior the above said transactions.
(2).
(a) Journalize the Iollowing transactions:
3.2.2003 Bought goods Ior cash Rs.14,500
7.2.2003 Sold goods to Laxhmi on credit Rs.5,000
9.2.2003 Received Commission Rs.300
10.2.2003 Cash sales Rs.29,000
12.2.2003 Bought goods Irom Meenakshi on credit Ior Rs.6,000
15.2.2003 Received Iive chairs Irom Saravana Trader at Rs.300 each.
20.2.2003 Paid Cash to Saravana Stores.
28.2.2003 Paid Salaries Rs.1,000
28.2.2003 Paid Rent Rs.500
(b) Write the above entries in the Iollowing manner:
Account to be Debited Account to be Credited
Bought goods Ior cash Rs.14,500
Sold goods to Laxhmi on credit Rs.5,000
Received Commission Rs.300
Cash Sales Rs.29,000
Bought goods Irom Meenakshi on credit Ior
Rs.6,000

Received Iive chairs Irom Saravana Trader at
Rs.300 each.

Paid Cash to Saravana Stores.
Paid Salaries Rs.1,000
Paid Rent Rs.500

(c)List out the ledger accounts to be opened Ior the above said transactions
(3) (a)Journalise the Iollowing Transactions:
1. Mani started business with the capital oI Rs.50 Lakhs
2. Land Purchased Ior Rs.2lakhs
3. Goods Purchased Irom Raju Rs.2500000 on cash.
4. Goods Purchased Irom Raghu Rs.1,00,000 on credit
5. Goods sold on cash Rs.15 lakhs
6. Goods sold on credit to Raja Rs.20 lakhs.
7. Salaries paid Rs.10,000
8. Carriage inwards paid Rs.25000
9. Interest received Rs.25000
10. Computer purchased Rs.25,000
11. Money collected Irom Raja Rs.50,000
12. Cash paid to Raghu Rs.10,000
13. Money deposited into Indian Bank Rs.2,00,000
14. Amount transIerred to Canara Bank Irom Indian Bank Rs.35,000
15. Payment made to Raghu by Indian Bank Cheque Ior Rs.1,00,000
16. Telephone expenses paid Rs.2000
17. Goods sold Ior cash Rs.5,00,000
18. Goods sold on Credit to Radha Rs.50,000
19. Goods purchased Irom Amar Ior Rs.2lakhs on credit
20. Cash purchases made Rs.25,000
21.Additionl Capital introduced by Mani Rs.10,00,000
22. Money deposited into Indian Bank Rs.2,50,000
23. Ten tables are purchased Irom Wood world each Rs.1,000
24. Payment made to Wood World by Indian Bank
25 Goods purchased Irom Lal and co on Credit Rs.35,000

3(b) Write the above transactions in the Iorm oI accounts to be debited and
credited.
3(c) List out the ledger accounts to be opened Ior the above said transactions

ACCOUNTING VOUCHERS
Procedure:
1. II the tally package was present in the desk top window double click the icon to open it.
2. In company inIormation select create company-~ to create a new company.
3. Creation oI Ledger Accounts:
In Gate way Tally select Account inIormation
Select Ledger Select single ledger create

Then type all the ledger accounts required based on the transactions.
Control A to save-enter-press escape yes-press escape up to getting gateway tally
menu.
4. Creation oI Inventories:
In gate way tally select inventory inIormation

Select stock group-select single stock group
Then type all the stock groups under Primary
Control A to save & escape to reach the gate way tally screen.

5. Settings:
Gateway Tally (Master)-~Select Account inIormation enter
Press F11-~Set the Account Ieatures as:
Maintain bill wise details YES
Control A Press escape up to Gate way Tally (Master)

Select Inventory inIormation enter
Press F12-~it goes to conIiguration
Select Acc/Inv inIormation
Set the Choice as
Allow Standard Rates Ior Stock items YES
Control A to save -~ ConIiguration
Select voucher entry enter set the choice as
Use Single entry
NO
Use Dr/Cr instead oI To/By

YES
Control A to save
Press Escape up to Gate way Tally

6. Create Units oI Measure:
In gate way tally screen Select Units oI Measure
Type Symbol as Nos and Formal name as Numbers

7. Creation oI Stock Items:
In Gate way Tally Screen select Inventory inIormation
Select stock items & Select single stock item create
Name: Sony 10 Kg
Under: Washing Machine
Units: Nos

Allow Std. Rates: Yes -~ enter
Fill standard cost (purchase price) and Selling Price
Control A to save Press escape up to getting Gate way Tally Screen.
8. Entering the Transactions:
In Gat way Tally Screen select accounting vouchers
F4
Contra F5 Payments
F6
Receipts
F8
Sales
F9 Purchases
Note:1. While entering the transaction iI any new ledger to be created use Alt
C
2. Save every entry by control A.
TALLY QUESTION BANK
PART A
1. DeIine the term Accounting`.

2. What is the need Ior Accounting to the Business Organizations?
3. Name the Iew important terms in accounting.
4. What is Accounting Cycle?
5. List out the usual transactions in a Business.
6. What are the three types oI accounts maintained Ior transactions?
7. How do you classiIy the business organizations based on its transactions?
8. What is service organization?
9. What is manuIacturing organization?
10. What is Trading organization?
11. State the concepts in oI accounting.
12. What is Book Keeping?
13. Explain single entry system oI book keeping.
14. Explain Double entry system oI book keeping.
15. What is Real Accounts?
16. What is Personal Accounts?
17. What is Nominal Accounts?
18. State the rules Ior Personal Account.
19. State the rules Ior Real Account.
20. State the rules Ior Nominal Account.
21. What is a Journal?
22. What is a compound Journal Entry?
23. What is voucher?
24. What is a trial balance?
25. State the advantages oI trial balance.
26. State the purpose oI preparing the trading account.
27. List out the purposes oI preparing ProIit and Loss account.
28. What is a Balance Sheet?
29. Explain the term ASSETS.
30. Explain the term LIABILITIES.
31. How can be assets classiIied?
32. How can be liabilities classiIied?
33. State any Iour Ieatures oI Tally Package.
34. How do you create company details in Tally?
35. How do you select the company in Tally?
36. How do you delete the company in Tally?
37. Name the Iew Iunctional keys in Tally?
38. What are groups?
39. Mention any Iour primary groups in Tally.
40. Mention any Iour-sub groups in Tally.
41. What is ledger?
42. How do you create ledgers in tally?
43. How do you classiIy the accounting transactions while working in Tally?
44. What do you reIer as Contra Entry?
45. Mention any Iour components oI company creation screen.
46. State the beneIits oI accounting on computers.
47. How can you view the trial balance in Tally?

PART B

51. Discuss the diIIerent concepts and conventions oI Accounting.
52. Describe the Ieatures oI TALLY Package.
53. Elucidate the needs oI Accounting Ior Business Organizations.
54. How do you classiIy the business organizations based on its transactions and explain them in
detail.
55.Compare and Contrast Computerized Vs Manual Accounting.
56. What are the advantages and limitations oI Double Entry System oI Book Keeping?
57. Describe the nature oI a Balance sheet and give the Iormat oI a Balance Sheet.
58. Distinguish between a Trial Balance and Balance Sheet.
59. Draw the Ilow chart Ior company creation and company alteration details in Tally.
60. State any twenty Iunctional keys and its purpose while using the Tally.

TALLY
PART A
Accounting DeIinition:
Accounting is the art oI recording, classiIying and summarizing the business transactions
in a signiIicant manner.
Need Ior Accounting:

To know the results oI operations.
To know the Iinancial position as on date.
To know the liquidity position
For business acquisition.
For statutory compliance.
Few Important terms in Accounting:

T r ansact io ns
Acco u nt
V o u cher
Capital
Purchases and Sales
Stock etc.
Accounting Cycle:
The accounting cycle is a complete sequence oI accounting procedures, which are
repeated in the same order during accounting period.
Usual Transactions involved in Business:

Purchase oI goods
Payment Ior Expenses
Sale oI goods or services
Receipts etc.
Types oI Accounts maintained Ior Transactions:

Real Accounts
Personal Accounts
Nominal Accounts
ClassiIication oI Business Organizations based on transactions:
Trading organization
ManuIacturing organizations
Service organizations
Service Organization:
An organization providing services is called as service organization.
Trading organization:
An organization involved in the process oI buying and selling is called as trading
organization.
ManuIacturing Organization:
An organization in the process oI transIorming raw materials into Iinished goods Ior
consumers, or Ior Iurther processing by others is called manuIacturing organization.
Concepts in Accounting;

Entity concept
Dual Aspect concept
Going concern concept
Accounting period concept
Money measurement.
Book Keeping:
Art oI recording in a systematic manner in the books oI accounts. Single Entry system oI Book
Keeping: It reIers the system where only the personal and cash aspects oI the transaction are
recorded in the books. Double Entry system:

It is the most common system oI book keeping whereby the two aspects oI every transaction i.e.
the receiving aspect and the giving aspect are recorded in the books oI accounts.
Real Account:
Real Account reIers the visible and real items. E.g. cash, bank etc
Personal Account:
Personal Account reIers the person with whom the company has dealings. E.g. customers
and suppliers.
Nominal Account:
It reIers the expenses and income accounts. E.g. salaries , rent received
Journal:
A journal may be deIined as the book oI original or prime entry containing a record oI
transactions Irom which the posting is done to the ledger.
Voucher:
A voucher is a document containing the details oI Iinancial transactions. E.g., Sales
invoice, purchase invoice, pay slip etc.
Trial Balance:
Trial balance can be deIined as a list oI balances standing on the ledger accounts and cash
book oI a concern.
Advantages oI Trial Balance:

It is a consolidated statement oI all the balances.
It helps to veriIy the accuracy oI the entries made in the ledger.
It helps to prepare the Iinal accounts. Purposes oI Preparing the Trial Balance:
To veriIy the accuracy oI the entries made in the ledger.
To prepare the Iinal accounts.
Purpose oI preparing the Trading Account:
To Iind the margin over purchase and sale oI goods.
Purpose oI Preparing the ProIit and Loss Account:
It is the statement prepared to compare the incomes and expenses and Iinally reports
whether Net ProIit or Net Loss incurred during the accounting period.
Balance sheet:
A statement which sets out the Assets and Liabilities oI a business Iirm and which serves
to ascertain the Iinancial position oI the same on any particular date.
Assets:
Assets represent everything, which a business owns and has money value.
Liabilities:
It represents the responsibility oI the business to repay in terms oI Rupees.
ClassiIication oI Assets:
Fixed Assets
Current Assets
Tangible Assets
Fictitious Assets
ClassiIication oI Liabilities:

Long term liabilities
Current liabilities
Contingent liabilities.
Features oI Tally Package:

Maintain complete range oI accounts.
Provided multiple reports.
Various options
Allows accounts oI multiple companies simultaneously.
Creaton oI Company in Tally:
Go to Gateway Tally ~ Company inIo ~Create Company
Alteration oI Company Details in Tally:
From Gateway Tally -~ Company inIormation menu ~ Select Alter ~ Enter.
(To go to company inIormation Alt F3)
Selection oI Company in Tally:
From Gate way oI Tally -~ Company inIormation menu -~ Select Company (enter).Tally
displays the name oI the company screen. Select the company as you wish.
Deleting a Company:

Follow the same path as that used Ior Alter company to display company alteration screen. Here
use Alt D key and Tally displays a message Delete` Yes or No. By pressing yes or enter key .
Tally displays another message Are you sure?` Yes or No. By pressing yes company will be
deleted.
Functional Keys in Tally:

F1 To select company.
AltF1 To shut company.
F2 To change Date
Alt F2 To change period
Alt F3 To get into company inIo screen
Control A to save the screen.
Groups:
Collection oI ledgers based on similar nature oI ledgers are known as groups.
Primary Group:
Primary Groups are the main groups which will be useIul at the time oI reporting
Sub-Groups:
Sub groups are the secondary groups, which is based on the primary Group.
Primary Groups:

Capital Accounts
Current Assets
Current Liabilities
Fixed Assets
Loans and liabilities etc.
Sub Groups:

Cash in hand
Cash at Bank
Sundry Debtors
Provisions etc.,
Ledger:
Ledger is an accounting head which is used to enter the transaction and identiIy the same.
Creation oI Ledger in Tally.
Gate way oI Tally -~ Accounts inIormation -~ ledgers -~ create.
Contra Entry:
Contra entry is a transaction indicating transIer oI Iunds Irom cash account to bank
account / bank account to cash account / one bank account to another bank account.
BeneIits oI Accounting in computers:

Multiple reports available in short time
Accuracy
Enables Iaster decision-making.
Components oI Company creation Screen:

Directory
N a me
Mailing Name
Address and State
Email Address
Use Indian VAT
Currency symbol etc.
View oI Trial Balance in Tally:
Gate way oI Tally ~ Display ~ Trial balance.
Financial Reports Available in Tally:
Balance Sheet
ProIit and Loss Account
Trial Balance
Account Books
Day Books
Day Book:
The day book is a list oI all transactions Ior a particular day.
Tally Financial Accounting CertiIication:
The tally Iinancial accounting certiIication is an online test Ior business accounting Tally.
Once certiIied you will join the global community oI Tally CertiIied ProIessionals.
PART B
Business organizations perIorm a variety oI transactions and can be classiIied as Iollows:

Service Organizations
Trading Organizations
ManuIacturing Organizations.
Service Organizations:
Meaning: An organization providing services is called service organizations.
Nature:
Service organizations provide their services at the point oI consumption by the
customer . Thus, such organizations could be severely hit on price iI there is
demand dip at the time Ior production.
Services are perishable, So the pressure on the service organization to provide
services is more than that on a manuIacturing organization or a trading
organization.
Customer interaction is greater in service organizations than in manuIacturing
or trading organizations.
In service organization, services are usually provided by people, not
machines. So, service organizations are more labour intensive than
manuIacturing organizations.
Customer goodwill is an intangible asset Ior service organizations, which can
be destroyed quickly.
Accounting in a Service Organization
:The organization maintains regular books oI account. Most service organizations do
not deal in inventory and thereIore, do not need to maintain inventory records. They
do not Iollow a standard pricing policy Ior all customers, at all times.











Dr. S. Muthumani/Management Studies/Sathyabama University. Trading Organization: Meaning: An organization
involved in the process oI buying and selling is called Trading Organization. Nature:
The actual market price is established and valid Ior a short based on the current supply and demand.
The value oI the product is determined by the customers expectations oI quality.
A trading organization has to continually keep track oI market demand and ensure that inventory planning is
done to take advantage oI demand whenever it arises.
DiIIerent customers may be charged diIIerent prices by varying the percentage oI discount on the price list.
Accounting in a Trading Organization:
The trader must keep track oI stock availability, customer requirement, cost oI procurement and market changes.
The accountant in trading organization has to maintain updated inventory records apart Irom regular accounting.











A company needs to account Ior inventories like raw materials, work in
progress and Iinished goods to arrive at the proIit made Ior the period.
Changes in the inventory valuation method change the proIits made during the period.
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Servlce CrganlzaLlon
CollecLlons
1radlng organlzaLlon CusLome0072
lnvenLory based on cusLomer demand
uemand
Arrlval of sLock Sale
Accounting in manuIacturing organizations requires more planning, preparation and
scheduling as compared to accounting in trading and service organizations.


FEATURES OF TALLY PACKAGE:
A leading accounting package: The Iirst version oI Tally was released in 1988 and through
continuous development, is now recognized as one oI the leading accounting packages across the
globe, with over quarter million customers. Tally`s market share is more than 90 NO
Accounting codes: Unlike other computerized accounting packages that require numeric codes,
Tally pioneered the no accounting codes concept. Tally users have the Ireedom to allocate
meaningIul names in plain English to their date items in the system.
Complete business solution: Tally provides a comprehensive solution to the accounting and
inventory needs oI business. The packages comprises oI Iinancial accounting and book-keeping
and inventory accounting.
Flexible and easy to use: Tally is very Ilexible. It minimize the human thought process, which
means that Tally can adapt to any business need, rather than the user trying to change the way
the business is run to adopt to the package.
Versatility: Tally is suitable Ior a range oI organizations Irom small grocery stores to large
corporations with international locations and operations.
Multi-PlatIorm availability: Tally is available on Windows 95, 98, ME, 2000 and NT. It runs on
a single PC or a network , supports access via any combination oI platIorms.
Simple and rapid installation: Tally has a simple, menu-driven installation procedure. The user
can install the program Iiles on any drive, iI the hard disk has partitions.
Unlimited multi-user support: A multi-user version oI Tally can be installed on a net work
having any number oI computers with diIIerent operation systems like Win 95, 98, NT 2000, XP
and Linux. Internal back up/restore: Tally has in built, user Iriendly back up and restores option.
Tally helps the user to take back ups oI one or more companies or all companies in a single
directory in the local hard disk or in any external media.
Tally Audit: The Tally audit Ieature provides the user with administrator rights, a capability to
check the correctness oI the entries made by the authorized users and alter these entries, iI
necessary. Once the entries are audited, Tally displays the altered entries, iI any, along with the
name oI the user who has altered the entry and the date and time oI the alteration.
Multi-directory Ior company management: The user can create multiple directories where he can
store data. The data stored in these directories can be accessed directly in Tally by speciIying the
path

FUNCTIONAL KEYS IN TALLY:
F2 - To change Date
Control A - To save
Control Q - Exit
Alt F2 - To change period
F4 - Contra
F6 - Receipts
F8 - Sales
F9 - Purchase
F 11 - To set Ieatures
F 12 - To set conIiguration
Esc - To go back to the previous screen
F1 - Select company
Alt C - To create new ledgers, settings etc.
Alt F2 - To shut the company