1

Fundamentals of accounting

 Introduction
 Accounting terms
 Accounting assumptions, concepts and principles
 Double entry system of accounting
 Types of accounts
 Gold and rules of accounts
 Source documents for accounting
 Recording of business transaction

 The accounting equation

 Recording of transactions in books of original entry/journal

 LEDGERS

 Trail balance
 Subsidiary books and control accounts
 Cash book
 Petty cash book
 Purchase book
 Purchases return book
 Sales book
 Control account

 Financial statements

 Trading and profit & loss account

 Balance sheet

 PRACTICE EXERCISE.

MAINTAINING CHART OF ACCOUNTS IN TALLY PRIME

 INTRODUCTION
 Company creation
 Company creations and configurations
 Chart of accounts(ledger,group)
 Ledger creation (single, multi ledgers)
 Altering and displaying ledgers
 Group creation (single and multi)
 Displaying groups and ledgers
 Deletion of groups and ledgers
 Shortcut keys
 PRACTICE EXERCISE

MAINTAINING STOCK KEEPING UNITS

 Introduction
 Business transactions
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 Source document
 Recording transaction in tally prime

 Accounting vouchers

 Receipt voucher
 Contra voucher
 Payment voucher
 Purchase voucher
 Sales voucher
 Debit note voucher
 Credit note voucher
 Journal voucher

 Shortcut keys
 PRACTICE EXERCISE

RECORDING DAY TO DAY TRANSACTIONS IN TALLY PRIME

 INTRODUCTION
 BUSINESS TTRANSACTIONS

 Source document or voucher

 Recording transaction in tally prime

 ACCOUNTING VOUCHERS

 Receipt voucher
 Contra voucher
 Payment voucher
 Purchase voucher
 Sales voucher
 Debit note voucher
 Credit note voucher
 Journal voucher

 SHORTCUT KEYS
 PRACTICE EXERCISE

ACCOUNTS RECIEVABLE AND PAYABLE MANAGEMENT

 Introduction (accounts payables and receivables)

 Maintaining bill-wise details
 Activation of maintain bill-wise details feature
 New reference
 Against reference
 Advance
 On account
 Stock category report
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 Changing the financial year in tally prime

 SHORTCUT KEYS
 PRACTICE EXERCISE

MIS REPORTS

 INTRODUCTION
 Advantages of management information systems
 MIS reports in TALLY PRIME

 TRAIL balance
 Balance sheet
 Profit and loss account
 Cash flow statement
 Ratio analysis
 Books and reports

 SHORTCUT KEYS
 PRACTICE EXERCISE

GETTING STARTED WITH GST

 Introduction
 Enabling GST & Defining tax details
 Transferring input tax credit to GST
 Intrastate supply of goods
 Return of goods
 Supplies inclusive of tax
 Definig tax rates at masters and transaction levels
 GST REPORTS
 Input tax credit set off
 GST tax payment
 Exporting GSTR-1 return and uploading in gst portal
 Accounting of supply of services
 Accounting exempted services

RECORDING VOUCHERS WITH TDS

 Introduction
 Basic concepts of tds
 Tds in tally prime
 Activation of tds in feature tally prime
 Tds statuary masters
 Configuring tds at group level
 Configuring tds at ledger level
 Booking of expenses in purchase voucher
 TDS Report
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PAYROLL,INCOMETAX,HR(PAYROLL)

 Introduction
 Processing basic payroll in tally prime
 Payroll reports
 Payroll statutory deductions
 Define salary details
 Attendance reports
 Statutory deductions
 Define salary details

MANUFACTURING PROCESS

 Introduction
 Activating of bill of materials
 Auto listing of components using bill of materials
 Accounting in TALLY prime
 Transfereing of manufactured goods from store to showroom

REPORTS

 Stock journal register

 Transfer analysis
 Cost estimation
 Stock ageing analysis

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Accounts Is an Art of Records, Classifying and Summarized In Learn Of Money Transaction in

a Particular Period

Every Business Transaction Has Two Aspects

1. Receiving of Benefit Is.....................Debit
2. Giving of Benefit is...........................Credit
Classification of Accounts:

1. Personal A\C’s 2.Impersonal A\C’s

Debit Credit Real A\C’s Nominal A\C’s

Receiver Giver
Ex: Vijay Sale Goods to Ram

Ram A\C-------------Dr
To Vijay A\C-------Cr

Real A\C’s

Debit Credit

What Comes In What Goes Out?

Ex: Computer Purchased For Cash

Computer A\C------------Dr
To Cash A\C--------Cr
Nominal A\C’s

Debit Credit

All Expenses &Losses All Incomes Gains

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Ex: Rent Paid For Cash

Rent A\C------Dr
To Cash-----------Cr
Ex: Commission Received In Cash
Cash A\C----------Dr
To Commission A\C---------Cr
Journalize the Followings
1. Satya Invested Capital 1, 00,000
2. Cash Deposited In S.B.I Bank 40,000
3. Wages Paid 3,000
4. Purchased Goods for Cash 5,000
5. Sold Goods for Cash 10,000
6. Purchased Goods from Rahul Traders 10,000
7. Sold Goods to Raju Traders 12,000
8. Returned Goods to Rahul Traders 2,000
9. Returns from Raju Traders 2,000
10. Satya Withdrawn Cash for Personal Use 2,000
11. Drawings for Office Use 2,000
12. Paid Salaries 10,000
13. Interest Received 1,000
14. Settled Rahul Traders.
15. Settled Raju Traders.
Journalize the Followings

1. Capital Introduced By Venkat In Cash

2. Cash Deposited In Sbi Account
3. Cash Withdrawn From Sbi Account
4. Cash Transferred From Sbi To Andhra Bank
5. Cash Fixed Deposited In Indian Bank
6. Loan Taken From Sbi Received In Cash
7. Shares Purchased For Cash And Brokerage Paid
8. Furniture Purchased From Durga Traders
9. Building Sold To Mr. Ravi And Received Cash
10. Goods Purchased From Patel Company Discount Received
11. Goods Sold For Cash And Discount Allowed
12. Goods Taken By Venkat For Personal Use
13. Depreciation Charged On Building
14. Closing Stock Valued At Year Ending
15. Net profit Transferred To Capital Account
7

Journalize The Followings

1. Capital Introduced By Radha 300000 And Deposited In SBI 100000
2. Cash Deposited In SBH Current Account 50000,Sbh Savings Account 50000
3. Cash Withdrawn By Radha For Personal Use 25000
4. Gold Loan Taken From Muthut Finance 100000 Received In SBI CHEQUE
5. Cash Deposited As Term Deposit In Gandhi Urban Bank 50000
6. Goods Purchased From ABC Company 100000 Gst@18%Extra.
7. Goods Sold To Mr. Ravi 150000 Gst@18%Extra.
8. Goods Returned To Abc Company 25000
9. Goods Returned By Ravi 50000
10.GST Paid To Commercial Tax Department By CHEQUE
Basic Definitions

1. Book Keeping: Book Keeping Is The Science And Art Of Correctly Recording In Books Of
Accounts All Those.

2. Accounting: The Art Of Recording, Classifying And Summarizing In A Significant Manner

In Terms Of Money Transactions And Events Which In Part At Least Of A Financial
Character And Interpreting The Results There Of.

3. Single Entry System: Only One aspect Of Transaction Is Recorded In This System. Only
A Few Accounts Are Maintained. Cash Account, Personal Accounts Are Maintained Under
the Single Entry System. Real and Nominal Accounts Are Not Maintained In This
System. Hence It Is Irrational, Incomplete, Unscientific, And Inaccurate System Of
Accounting System.

4. Double Entry System: In Every Business Transactions Has Two Aspects.

A. Receiving of Benefits B. Giving Of Benefit Receiving of
Benefit Will Be Debited and Giving Of Benefit Will
Be Credited. Double Entry System Is Dependent Up On The Principle. “That Every Debit
Had a Corresponding Credit and Vice-Versa”. Hence Every Transaction Affects Two
Accounts In Two Opposite Directions. As Two Aspects Are Being Recorded In The
Books, It Is Known As “Double Entry System”.

5. Business Transactions: Any Exchange of Money or Money’s Worth as Goods & Services
between Two Parties as Known as Business Transaction.
8

6. Voucher: It Is The Origin Of The Business Transaction. It Is The Original Entry. It Is A

Small Paper. It Is The Evidence Of The Incurrence Of The Transaction. It Can Be
Termed As Supporting Document For Each Transaction.

7. Journal: The Word Journal Is Derived From The French Word “Jour” Which Means A
Day. Journal Means A Daily Record Where Every Transaction Is Recorded In The First
Instance And Then It Is Posted To The Ledger. The Form In Which It Is Recorded Is
Called Journal Entry And Recording Or Entering A Transaction In The Journal Is Known
As Journalizing.

8. Ledger: A Ledger Account May Be Defined As A Summary Statement Of All The

Transactions Relating To A Person, Asset, Expense Or Income Which Have Taken Place
During A Given Period Of Time And Shows Their Net Effect.

9. Cash Book The Book That Deals With The Transactions Relating To The Receipts And
Payments Of Cash Direct Or Through Bank, Discount Allowed Or Received Etc., And It
Shows Cash In Hand And Cash At Bank.

10. Trial Balance: It Is A Statement Of Debit And Credit Balances Extracted From The
Various Accounts In The Ledgers With A View To Test The Arithmetical Accuracy Of The
Books.

11. Trading Account: It Is Prepared To Know The Trading Results Or Gross Margin On
Trading Of The Business.

12. Gross Profit: The Differences Between The Sales& Cost Of Goods Sold Are Known
As Gross Profit.

13. Profit & Loss Account: It Is Prepared From Nominal Accounts And Its Balance Is
Transferred To Capital Account As The Whole Profit Or Loss Is That Of The Owner It Will
Increase Or Decrease His Capital.

14. Net Profit: This Is Derived From P&L A/C And It Is The Profit After All Direct And
Indirect Expenses.
9

15. Balance Sheet: Balance Sheet Is A Statement Prepared With A View To Measure
The Financial Position Of A Business On A Certain Fixed Date.
It Is A Statement Showing The Sources And Application Of Capital. It Is A
Statement And Not An Account.

16. Liabilities: A Liability Is An Amount, Which A Business Is Legally Bound To Pay. It

Is A Claim By An Outsider On The Assets Of The Company.

17. Assets: Assets Are The Possession And Property Of Business.

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Important Questions
1. Transaction:
Ex: - Cash Deposited In Sbi Bank 1, 00,000
2. Proforma of Journal Entry:
Date Particulars Ledger Debit (Rs) Credit (Rs)
Folio No

01-04-2016 Sbi Account 1,00,000

To Cash Account 1,00,000
(Being Cash Deposited)

3. The Proforma of an Account (Ledger):

Dr Account Cr
Date Particulars Journal Amount Date Particulars Journal Amount
Folio No Rs. Folio No Rs.

To (Debit By(Credit
Side) Side)
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4. Kinds of Subsidiary Books:

Purchase Book: Only The Credit Purchases Of Goods Are Recorded In This Book. Cash
Purchases And Purchase Of Assets Are Not Recorded In This Book.
Sales Book: Only The Credit Sale Of Goods Is Recorded In The Sales Book. Cash Sales And
Sale Of Assets Are Not Recorded In This Book.
Purchase Returns Book: This Book Keeps A Record Of The Returns Outwards. When Goods Are
Purchased On Credit Basis And Returned To The Supplier For Some Reasons.
Sales Returns Book: This Book Keeps A Record Of All Return Inwards. When Goods Are Sold
On Credit Basis And Returned By The Customer Due To Some Reasons.
Cash Book: This Book Is Maintained To Record All Cash Transactions. All Cash Receipts And
Payments Are Recorded In The Book.
Bills Receivable Book: The Bills On Which The Amount Is Yet To Be Received And Promissory
Notes Accepted By The Buyer Or Debtor Are Recorded In This Book. Drawn by the Buyer or
Creditor are Recorded in This Book.
Bills Payable Book: All Bills and Promissory Notes Drawn By the Buyer or Creditor Are
Recorded In This Book
Journal Proper: This Book Is Used For Recording Only Those Transactions, Which Cannot Be
Recorded In Any Other Subsidiary Books.
5. Advantages of Computerized Accounting and Disadvantages of Manual Accounting
The Advantages Of Computer Accounting Can Be Termed As
Disadvantages Of Manual Accounting.
1. Computer Accounting Saves Time
2. It Reduces The Manual Labour
3. It Avoids The Duplication Of Work Besides The Duplication Of Entries.
4. It Retrieves Accurate Reports In Minimum Possible Time
5. It Assures Immediate And Secured Employment
13

6. It Allows Date Filling As Required By The Users

7. It Generates Various Types of Reports and Analysis Reports as per User’s Choice.
6. What Are The Ledgers Usually Used By A Firm?
 Day Book
 Cash Book
 Sales Book
 Sales Returns Book
 Purchases Book
 Purchases Returns Book
 Bank Book
 General Ledger
 Customers And Suppliers Ledgers

7. Advantages Of Tally
□ Simple and Rapid Installation
□ Unlimited Multi-User Support
□ Internal Backup/ Restore
□ Data Reliability
□ User-Defined Security Levels
□ Data Security
□ Tally Audit
□ Tally vault Pass Word
□ Removal of Data into a Separate Company
□ Multi-Directory for Company Management
□ Import/ Export of Data
□ Data Migration Capability
□ Synchronization
□ Graphical Analysis of Data
□ ODBC (Open Database Connectivity) Compliance
□ Protocol Support
□ Direct Web Browser Access
□ Ability to Preview and Publish Reports and Documents on the Internet
□ E-Mail Facility
□ Multilingual Capability
□ Company Logo
□ Exporting Of Tally Reports to Ms-Excel&Pdf
Calculations (Duties & Taxes)
□ Excise Duty(Ed)
14

□ Goods and Services Tax (GST)

□ Central Sales Tax (CST)
□ Value Added Tax (Vat)
□ Tax Deducted At Source (TDS)
□ Service Tax (St)
□ Fringe Benefits Tax (FBT)
□ Tax Collected At Source (TCS)
□ Pay Roll
□ Point Of Sales (POS)
□ Manufacturing Journal
□ Job Costing
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8. Disadvantages (Limitations) Of Tally

1. There Is No Major Graphical Improvement In Old Version Of Tally. The Indian Head Office
Of Tally Is Continuously Launching New Version From Tally 4.5 To Tally 9 But The GUI
Interface Is Still Like Old Dos Based Accounting Software.

2. Journal Voucher Can Not Be Amended Once Created.

3. Limited Accounts (Ledgers) (Only Two Accounts)

4. Batch Wise Invoicing Not Possible In Tally.

5. Re-Order Level Of Inventory Stock Can Not Be Maintained In Tally Software.

6. Last Price Inquiries Are A Complex Task In Tally.

7. Pricing Issues Like Supplying Different Customer At Multiple Price Lists Is Quite Difficult In
Tally Accounting Software.

8. Cost Wise Tally Is Quite Expensive As Compare To Other Alternative Accounting Software
In Pakistan.

9. We Can Not Open Two Accounting Ledgers For Viewing At The Same Time In Tally
Software.

10. Its Package Software Not An ERP I.E We Have To Accept What They Are Offering And
Customization Is Very Limited.

11. No Web Based Option Available In Tally Software.

15

12. If The User Password Is Lost Then The Data Retrieval Is Very Difficult And Time
Consuming.

13. Tally Software Is Not A Modular Application Unlink QuickBooks, Peachtree And Other
Accounting Software In Pakistan Which Provides Different Modules Like Accounts Payable,
Accounts Receivable, Sales And Order Management Etc.

14. it’s Not Real Time It Can Just Be Used to Record Detailed Accounting Debits and Credits.

15. There Are Very Limited Reporting Capabilities in Tally.

16. Tally Support System Is Not Very Good; There Is Still Room For Improvement.
---000---

History of Tally Solutions Pvt Ltd:

Tally Solutions PVT Ltd Formerly Called PATRONICS PVT Ltd Started By Sri S.
S. GOENKA, Based In Bangalore Was Started As A Simple Reason, And Software Development
Organization The Absence Of Readily Available Accounting Package Made The Company
Create For Their Own Business Requirements Thus Commenced The Development Work On An
Accounting Package In Basic In The Year 1986.

Tally Solutions Private Limited

Type Private

Industry Computer Software

Founders SHYAM SUNDER GOENKA

Headquarters Bangalore, India

 Bangladesh
Area Served  Middle East
 United Kingdom

Key People  SHEELA GOENKA

(Chairperson)
 BHARAT GOENKA
(Managing Director)
16

Products  PRIME
 Developer 9
 Shopper 9

Website Www.Tallysolutions.Com

Versions In Tally
Tally4.5(First Version In Tally During 1988)
It Has Been Working With Ms-Dos Operating System And It Is Used To Create Accounts
Information Only.
Tally5.0
It Has Been Working With Windows Operating System And It Is Used To Create Accounts
Information Along With Inventory Information And Godown Information Also.
Tally5.4
It Has Been Working With Windows NT Multi User Operating Systems And It Is Also Used To
Create Accounts Information Along With Inventory Information And Godown Information Also.
Tally6. 3
It Also Has Been Working With Windows NT Multi User Operating System. The Following Three
Companies Are Available In This Version.
A. Accounts Only:
It Has Also Been Working With Windows .It is used to create Only the Company Accounts and
Related Financial Statements.
B. Accounts with Inventory:
It Is Used To Create The Company Accounts Along With Inventory Info And Godown Info Also.
C. Inventory Only:
It Is Used To Create The Company Inventory Information Along With Godown Information
Only And No Accounts Information Is Possible.

Tally7. 2:- It Has Been Launched With Effect From 1st April 2005, Which Works On Multi User
Operating Systems Also. The Following Types Of Companies Can Be Found In This Version.
17

A. Accounts Only: -It Is Used To Create Only The Company Accounts And Related Financial
Statements.
B. Accounts With Inventory: - It Is Used To Create The Company Accounts Along With
Inventory Info And Godown Info Also.
New Features:-“Vat (Value Added Tax); TDS (Tax Deducted At Source)” Have Been Added In
This Version.
Tally 8.1
It Has Been Launched Newly All Over India During February - 2006, Which Works On Multi User
Operating System Also. The Following Types Of Companies Can Be Found In This Version.
A. Accounts Only:
B. Accounts with Inventory:
New Features: - FBT, Job Costing, Service Tax, TCS And Point Of Sales Have Been Added In
This Version.
Tally 9:
It Has Been Launched Newly All Over India During Nov - 2007, Which Works On Multi User
Operating System Also. The Following Types Of Companies Can Be Found In This Version.
A. Accounts Only:
B. Accounts with Inventory:
New Features Named “Pay Roll Management” Have Been Added In This Version. Tally.Erp9:-
It Has Been Launched In The Beginning Of 2009 And It Is Equipped With Enterprise Recourse
Solutions Like Various Financial Statements And MIS Statements, Advanced Audit Features.
A New Feature Of ERP 9 Release 1.61 Is Equipped With A New Vat Rate Levied With Effect
From 15-01-2010 @14.5%.
New Features Of ERP 9 Release 3.2 Released During 26 th June 2011 Is Equipped With
Company Logo And SMS Facility To Customers When Company I.E. Accounts Only And
Accounts With Inventory Can Be Created.
New Features: MCA Reports (Ministry of Corporate Affairs), Vat@5%. Latest Version: -
Tally.Erp9, Release6.0.3.Released As On 2nd August 2017.
Note: - From Tally 7.2 Onwards Only Two Types Of Companies Can Be Created.
1. Accounts Only
2. Accounts with Inventory.
Tally primeIntroduction:
Tally primeIs the World's Fastest and Most Powerful Concurrent Multi-Lingual
Business Accounting and Inventory Management Software. Tally. prime, Designed Exclusively
To Meet The Needs Of Small And Medium Businesses, Is A Fully Integrated, Affordable And
Highly Reliable Software. Tally primeIs Easy To Buy,
18

Quick To Install, And Easy To Learn And Use. Tally primeIs Designed To Automate And
Integrate All Your Business Operations, Such As Sales, Finance, Purchasing, Inventory, And
Manufacturing. With Tally. prime 9, Accurate, Up-To Date Business Information Is Literally At
Your Fingertips Anywhere. The Powerful New Features And Blazing Speed And Power Of Tally
primeCombined With Enhanced MIS, Multi-Lingual, Data Synchronization And Remote
Capabilities Help You Simplify All Your Business Processes Easily And Cost-Effectively.
What Is ERP?
primeIs A Way To Integrate (Mixing) The Data And Processes Of An Organization Into One
Single System.
Use Of Enter Key and Escape Key:
 ‘Enter’ To Go For The Cursor Place.
‘Escape’ To Go Back From Cursor Place Closing
Of Tally:
Tally Can Be Closed In Two Different Ways,
 Press Escape Button (Or) Close Button (With Conformation)
 Ctrl +Q (With Out Conformation)
Browsing: (How To Open Tally primePackage)
 Double Click On Tally primeIcon On Desktop
 Start >Programs > Tally prime>Tally prime
 Executable File :- TallyPRIME.Exe
 Select The Option Work In Educational Mode From Startup Window And Press Enter
 Select The Option Gold Edition Mode And Press Enter

---000---
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Company Information Menu

Company Information > Select Company (F1):
It Is Used To Open A Selected Company From Tally Directory.
 Select The Company Name From The List,
 Enter User Name And Password And Press Enter.
Company Information > Create Company:
It Is Used To Create A New Company And Its Master And General Information.
 Enter The Company Details In Company Creation Window
 Press Enter (Or) Ctrl + A To Save
Company Information > Shut Company (Alt + F1):
It Is Used To Close The Current Working Company.
Company Information > Alter:
 It Is Used To Modify The Company Name And Its General Information
 It Is Also Used To Delete The Company From The Companies List Or Tally Directory By
Using The Buttons (Alt + D).
Working With Tally Vault Password:
If Tally Vault Password Is Specified While Creation Of A Company. The Name Of The
Company Will Not Appear In Company’s List or Tally Directory.
The Serial Number Generated For The Company Along With The Passwords Are To Be Used
To Access The Company.
Company Info > Change Tally Vault:
The Tally Vault Password So Specified While Creation of the Company Can Be
Changed At Any Point Of Time So That Tally Will Generate a New Company with a New Serial
Number with the New Password.
Company Info> Split Company Data:
It Is Used To Change The Starting Date Of The Accounting Period So That Tally
Will Generate Two Or More Companies For The Original Company.
 Select The Option, Split Company Data From Company Info Menu.
 Select The Company Name
 Specify The Date To Split The Data
 Specify The Tally Vault Password If Any, Two Times.
Company Information > Create Group Company
It Is Used To Create A Group Company By Selecting Various Companies In To The Group.
Select ‘Create Group Company’ After Opening Which Are To Be Created As A Group.
Company Info>Back Up
It Is Used To Transfer the Data from Tally Directory into a Floppy or Cd
20

Company Info> Restore

It Is Used For Transfer Of Data From External Devices Into Tally Directory. Company Information
> Security Control:
It Is Used To Create User Accounts And Also Specify The Security Levels. There
Are Two Types Of Security Levels Can Be Found In Tally.
A. Owner Level: Used For Company Owner and Auditors.
B. Data Entry Level: Used For Remaining Workers Of Company. Types of
Access (Rights Allotted To Data Entry Level)
1. Alter: It Allows The User To Modify And Delete The Data. 2. Create:
It Allows The User Only To Create The Data.
3. Create/Alter: It Allows The User Only To Create, Modify And Delete The Data. 4. Display: It
Allows The User Only To View The Data.
5. Display/Print: It Allows The User Only To View And Print The Data.
6. Full Access: Allows User to Have Full Access over the Data Equal to Owners 7. Print: It
Allows The User Only To Print The Data.
Quit:-It Is Used To Exit from the Company Info Menu Leading To Gate Way
of Tally.
Use of Function Keys in Gate Way of Tally Menu: F1 > Select
Company (To Open Company)
Alt + F1 > Shut Company (To Close Company) F2 >
To Change the Current Date
Alt + F2 > To Change Current Period
F3 > To Change Current Working Company Alt +
F3 > To Go Back To Company Info Menu.
Note: Press the Buttons F11 (Company Features) and Activate F1 to Activate Accounting
Features

Gate Way of Tally > Accounts Information:

The Following Options Are Available Under Accounts Information.
> Currencies
> Cost Categories
> Cost Centers
> Groups
> Ledgers
> Budgets
> Scenarios
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Budget
21

A Budget Is A Plan Prepared For The Flow Of Funds In An Organization. It Contains Financial
Guidelines For The Future Plan Of Action For A Selected Period Of Time. A Budget Helps To
Refine Goals And Use Funds Efficiently. It Provides Accurate Information for Evaluation of
Financial Activities, Ideas In Decision Making And Provides A Reference For Future Planning.
In Tally.Erp 9, You Can Create, Alter and Delete A Budget.

Activating Budgets Feature

To Activate The Budgets Feature In Tally.Erp 9:

1. Select F11: Features > F1: Accounting Features.

2. Set Maintain Budgets And Controls? Yes.
3. Press Ctrl+A To Save.
4. Accounts Info> Budgets > Create

Groups

There Are 28 Predefined Groups In Tally.Erp 9, Which Are Widely Used In The Chart Of
Accounts Of Many Trading Organizations. Out Of These, 15 Groups Are Primary Groups And
The Remaining 13 Are Secondary Groups. (Sub Groups) Among The 15 Predefined Groups, 9
Groups Are Balance Sheet Items And The Remaining 6 Groups Are Profit & Loss A/C Items. All
the Secondary Groups (Sub Groups) Are Adjusted In Balance Sheet. However, You May Also
Alter Of These Predefined 28 Groups...

15 Primary Groups 13 Sub Groups

Branches / Divisions /Budgets Bank Accounts

Capital Account Bank OD A/C

Current Assets Cash-In-Hand

Current Liabilities Deposits (Asset)

Direct Expenses Duties & Taxes

Direct Incomes Loans & Advances

Fixed Assets Provisions

Indirect Expenses Reserves & Surplus

22

Indirect Incomes Secured Loans

Investments Stock-In-Hand

Loans (Liability) Sundry Creditors

Misc. Expenses (Asset) Sundry Debtors

Purchase Accounts Unsecured Loans

Sales Accounts

Purchase Purchase Account

Purchase Return Purchase Account
Wages Direct Expenses
Carriage Inwards On Purchases Direct Expenses
Cartage And Coolie Direct Expenses
Octroi Direct Expenses
Fright Charges Direct Expenses
Coal, Gas, Water Direct Expenses
Oil And Fuel Direct Expenses
Factory Rent, Insurance, Electricity, Lighting And Heating Direct Expenses
Sales & Sales Returns Sales Account
Salary, Da,Hra,Cca Indirect Expenses
Postage And Telegrams Indirect Expenses
Telephone Charges Indirect Expenses
Rent Paid Indirect Expenses
Rates And Taxes Indirect Expenses
Insurance Indirect Expenses
Audit Fees Indirect Expenses
Interest On Bank Loan Indirect Expenses
Interest On Loans Paid Indirect Expenses
Bank Charges Indirect Expenses
Legal Charges Indirect Expenses
Professional Fee Indirect Expenses
23

Printing And Stationery Indirect Expenses

General Expenses Indirect Expenses
Sundry Expenses Indirect Expenses
Discount Allowed Indirect Expenses
Carriage Outwards On Sales Indirect Expenses
Traveling Expenses Indirect Expenses
Advertisement Indirect Expenses
Bad Debts Indirect Expenses
Repair Renewals Indirect Expenses
Motor Expenses Indirect Expenses
Depreciation On Assets Indirect Expenses
Interest On Investment Received Indirect Income
Interest On Deposit Received Indirect Income
Interest On Loans Received Indirect Income
Commission Received Indirect Income
Discount Received Indirect Income
Rent Received Indirect Income
Dividend Received Indirect Income
Bad Debts Recovered Indirect Income
Profit By Sale Of Assets Indirect Income
Sundry Income Indirect Income
Loan From Others Loan Liabilities
Bank Loan Loan Liabilities
Bank Overdraft & Cash Credit Bank Od
Bills Payable Current Liabilities
Sundry Creditors Sundry Creditors
Mortgage Loans Secured Loans
Expense Outstanding Current Liabilities
Income Received In Advance Current Liabilities
P F & Esi Current Liabilities
Capital Capital Account
Drawings Capital Account
Cash & Petty Cash Cash In Hand
Bank Savings & Current Accounts Bank Account
Fixed & Any Other Deposits Deposits(Assets)
Shares Investments
Bills Receivable Current Asset
N S S Certificates Investments
24

Sundry Debtors Sundry Debtors

Closing Stock Stock In Hand

Stock Of Stationery Current Asset

Showroom Advance Loans & Advances
Staff Personal Loan Loans & Advances
Furniture, Fixtures & Fittings Fixed Asset
Motor Vehicles Fixed Asset
Plant And Machinery Fixed Asset
Land And Building Fixed Asset
Leasehold Property Fixed Asset
Patents Fixed Asset
Goodwill Fixed Asset
Prepaid Expenses Current Asset
Income Outstanding Current Asset
Input CGST & Output CGST Duties Taxes
Input SGST & OUPUT SGST Duties Taxes
GST Duties Taxes
Service Tax,Tds,FBT,&TCS Duties Taxes

 What Is Voucher Entry Different Types of Voucher Entries

Entry Of Any Transactions Into Vouchers In Tally Is Known As Voucher
Entry. There Are Two Types Of Voucher Entries In Tally.

1. Normal Voucher Entry

2. Advanced Voucher Entry
1. Normal Voucher Entry:-To Enter the Transaction into the Voucher Generally
Is Known As Normal Voucher Entry.
2advanced Voucher Entry:-To Enter The Transaction Into The Voucher With Other Particulars
Like Cost Centers Information And Other Additional Information Is Known As Advanced
Voucher Entry.
Gateway Of Tally> Accounting Vouchers
F4>Contra Voucher:
This Voucher Is Used For The Following Types Of Transactions:
25

1. Cash Deposited In Bank Current & Savings A/C

2. Cash Withdrawn From Bank Current & Savings A/C
3. Cash Transferred From Cash A/C to Petty Cash A/C
4. Cash Transferred From One Bank A/C to another Bank A/C
5. Cash Transferred From Petty Cash To Cash A/C Note:
The Account Credited Shall Be Entered First. F5>Payment
Vouchers:
This Voucher Is Used For The Payment Transactions Of The Following Types.

1. Expenses Paid By Cash / Cheque

2. Assets Purchased For Cash / Cheque
3. Investments / Fixed Deposits Made By Cash / Cheque
4. Cash / Cheque Payments Made To Suppliers Note:
Account To Be Debited Entered First. Contra and Payment
Voucher Problem

1. Opening Balances:
Cash in Hand 300000

Petty Cash 30000

Sbi Bank 170000

Andhra Bank 100000

Vehicles 200000

2. Transactions
1. Cash Paid To Administrative Expenses (Marketing
Department) 2000

2. Cash Deposited In Sbi Account 75000

3. Andhra Bank Cheque Issued To Advertisement 10000
(Marketing Department)
26

4. Office Rent Paid By Cash (Accounts Department) 5000

5. Salary Paid To Office Clerk 30000 (Accounts Department)
D.A.@50%, Pf@12%,Esi@10% on Salaries.

6. Cash Deposited In Andhra Bank 100000

7. Furniture Purchased For Cash 10
Chairs 30000
5 Tables 30000

8. Andhra Bank Cheque Issued To BSNL Telephone Bills (Sales

Department) 10000

9. Cash Paid To Fax Courier Expenses1500 (Sales Depart)

10. Cash Withdrawn From Sbi 95000
11. Cash Deposited In Postal Department as Fixed Deposit
50000

12. Staff Welfare Expenses Paid By Cash 500(Mktg Depart)

13. Cash Withdrawn From Andhra Bank 100000
14. NSS Certificates Purchased For Cash 50000
15. Cash Paid To Travelling Expenses (Sales Depart) 3000
16. Cash Transferred From SBI to Andhra Bank 30000
17. Office Maintenance Paid By Cash (Mktg Depart) 500
18. Cash Paid To Internet Bills 2000(Sales Department)
19. Split Ac Purchased For Office Use 30000 Paid By SBI
Cheque

20. Cash Transferred From Petty Cash to Cash Account20000

21. Office Ledger Books Purchased For Cash (Accounts
Department) 2000

22. Sweeper Wages Paid By Cash 3000 (Accounts Department)

27

23. Amount Invested In LIC Mutual Funds by Cash50000

---000---

2. Problem
1. Opening Balances

A. Cash On Hand Rs 5, 30,000

B. Petty Cash Rs 7,000
C. Bank Accounts:
SBI Bank Rs 1, 50,000

Andhra Bank Rs 1, 20,000

2. Transactions:

1. Cash Deposited In SBI Rs 1, 00,000

2. Cash Paid To Legal Expenses Rs 3,500(Accounts Department)

3. SBI Cheaque Issued To Advertisement Rs 3,000(Mktg Dep)

4. Cash Paid To Staff Salaries Rs 20, 000(Mktg Dep)

{Da@50%, Pf@12%, Esi@7% on Salaries}

5. Wages Paid By Cash (Accounts Dep) Rs 5,000

6. Following Assets Purchased For Cash

Air Conditioner Rs 25,000

Passion Plus Rs 40,000

7. Andhra Bank Cheque Issued To Electricity Bills Rs

5,000 (Mktg Dep)

8. Cash Deposited In Dena Bank 75000

9. Postage & Courier Expenses Paid By Cash Rs 1,500 (Sales

Dep)

10. Cash Paid To Staff Welfare Expenses Rs 500(Sales Dep)

11. Repairs & Renewals Expenses Paid By Cash Rs 2,000 (Sales
Dep)

12. Cash Paid To Office Rent Rs 3,000(Mktg Dep)

28

13. Cash Transferred From SBI to Andhra Bank Rs 50,000

14. Cash Paid To Exhibition Charges Rs 2,000(Mktg Dep)
15. Cash Deposited As Fixed Deposit in Bank of India Rs 50,000

16. Cash Paid To Office Maintenance Exp Rs 500(Mktg Dep)

17. Cash Withdrawn From SBI Rs 95,000

18. Shares Purchased For Cash 200shares @150 Each

19. Water Cooler Purchased For Office Use and Paid By SBI
Cheque Rs 35,000

20. Cash Transferred To Cash A/C from Petty Cash Rs 1,000

21. Stationery Purchased For Cash 1500(Mktg Dep)
---000---

F6>Receipt Voucher

It Is Used For The Receipt Transactions Of The Following Types.

1. Cash / Cheque Received From Customers

2. Incomes Received By Cash / Cheque
3. Old Assets Sold For Cash / Cheque
4. Investments / Deposits Received By Cash / Cheque Note:
- The Account “Credit” Shall Be Entered First.
F7>Journal Voucher: This Voucher Is Used For the Followings.

1. Accounts Transfer
2. Depreciation on Fixed Assets
3. Assets Purchased On Credit Basis
4. Other Adjustment Transactions of Non-Cash & Non-Bank Nature. Note: The
Account “Debited” Shall Be Entered First.
Bill Wise Details:-It Is Applicable For Sundry Debtors & Sundry Creditors Only. Types of
Reference (Or) Method of Adjustment:
 29

A. Advance: Advances, Paid To Suppliers Or Received From Customers

B. New Reference: A New Transaction With A Customer Or A Supplier

C. Against Reference:

Due Amounts, Received From A Customer Or Paid To A Supplier.

D. On Account:

Reference Which Will Not Come Under Any One of the Above Categories.

Receipt Voucher/ Journal Voucher Problem

Enter the Following Transactions In The Books Of Universal Company Opening

Balances:

Cash on Hand 7, 00,000

Indian Bank 4, 00,000

Office Buildings 5, 00,000

Partners Capitals:
Champion 7, 00,000

Winner 9, 00,000
Transactions:

1. Additional Capital Introduced By Partners

>Champion 8, 00,000 > Winner 9, 00,000

2. Cash Deposited In Indian Bank 1, 50,000

3. Cash Paid To Repairs & Renewals Exp 3,500

4. Indian Bank Cheque Issued To Advertisement Exp 5,000

5. Following Incomes Received By Cash
Interest 35,000 Commission 57,000 Dividends 97,000

6. Shares Purchased For Cash25, 000

7. Furniture Purchased From Durga Traders 20,000
30

8. Cash Deposited As Fixed Deposit in HDFC Bank 1, 50,000

9. Loan Borrowed From Dena Bank Rs 5, 00,000 and Deposited In Indian
Bank 2, 50,000

10. Salaries Paid To Staff 27,000 And Esi@7%,Personal Loan 2,000 And Pf@12% Has To Be
Recovered From The Salaries.

11. Cash Transferred To Petty Cash 3,000

12. Wages Paid By Cash 4,000

13. Conveyance Paid By Cash 1500

Note: All Expenses and Incomes Are To Be Apportioned As Under

1. Branch-I 60%

2. Branch-Ii 40%

---000---

F8>Sales: -This Voucher Is Used To Record The Following Transactions.

1. Goods Sold For Cash

2. Goods Sold For Bank Cheque
3. Goods Sold For Bank Credit Cards
4. Goods Sold For Credit Basis.
Ctrl+F8>Credit Note (Sales Returns)
This Voucher Is Used For Recording The Transactions Relating To Goods
Received From Customers On Account Of Sales Returns.
Note: Account To Be Credit Shall Be Entered First.

F9>Purchases: - This Voucher Is Used For the Following Transactions.

1. Goods Purchased For Cash

2. Goods Purchased For Bank Cheque
3. Goods Purchased For Credit Basis
4. Goods Purchased For Bank Credit Cards
31

Note: - Account To Be Credited Shall Be Entered First.

Ctrl+F9:- Debit Note (Purchase Returns):
This Voucher Is Used For Recording The Transactions Relating To Goods
Returned To Suppliers On Account Of Purchases Returns.
Final Accounts:

The Package of Accounts and Statements That Are Used To Ascertain the Gross Profit, Net
Profit and Financial Position Are Called “Final Accounts. The Trial Balance Is The Base From
Which The Final Accounts Are Prepared.
Objectives:

• To Assess The Profit Earned Or Loss Incurred By The Business In A Specific Period.

• To Find Out The Financial Position Of The Firm And To Know The Total Assets And Liabilities
And The Net Capital Of The Business On A Particular Date.
A Trading Concern Will Prepare Final Accounts In 3 Stages:

1. Trading Account - To Find Out Gross Profit / Loss for the Period
2. Profit & Loss Account – To Assess the Net Profit
3. Balance Sheet - To Show Total Assets and Liabilities
B Manufacturing Concern Will Prepare Final Accounts In 4 Stages:

1. Manufacturing Account - To Know the Total Cost of Production

2. Trading Account - To Find Out Gross Profit
3. Profit & Loss Account - To Assess the Net Profit / Net Loss for the Period
4. Balance Sheet - To Show Total Assets and Liabilities. The Total
Transactions Of The Business Are Divided Into:
Transactions Of Capital Nature: I) Capital Expenditure II) Capital Income Transactions Of
Revenue Nature: I) Revenue Expenditure II) Revenue Income Final Accounts Problem
32

Enter All The Transactions And Prepare Final Accounts.

1. Commenced Business with Cash Jain

Capital 1, 00,000
Jairam Capital 1, 00,000

2. Cash Deposited In

Sbh Current Account 50,000 Sbh

Savings Account 50,000

3. Purchase Advance Paid To Kailashnath & Co 25,000

4. Goods Purchased From Jackson & Co 95,300

5. Purchased Goods from Hameed & Co 60,500

6. Goods Purchased From Kailashnath& Co 1, 00,000

7. Goods Returned To Jackson & Co 10,000

8. Goods Returned To Kailashnath&Co 15,000

9. Sales Advance Received By Cash 50,000from Khadar

10. Goods Purchased From Vishal 25,000 & Cash

Paid For The Same.

11. Goods Sold To Lalchand 1, 45,000

12. Goods Sold To Azad 2, 25,000
13. Goods Sold To Khadar 3, 00,000
14. Sold Goods for Cash 5, 00,000
15. Goods Returned By Lalchand 25,000
16. Goods Received Back From Khadar 25,000
17. Cash Paid To The Following Salaries
50,000
Furniture 35,000

Wages 25,000
33

Rent 16,000

Internet Bills 25,000

Telephone & Fax Bills 34,000

18. Stationery for Office Use Purchased From

Rajeshwar &Co 6,100

19. Closing Stock Has Been Valued At 7, 50,000

---000---
 34

F10 >reversing Journal

reversing Journals Are Special Journals That Are Automatically Reversed After A Specified Date.
They Exist Only Till That Date And Are Effective Only When They Are Included In Reports. These
Are Used In Interim Reporting In The Course Of The Financial Year Where Accruals Are To Be
Reported. These Accruals Are Usually Short Term And Are Cleared In The Subsequent
Period. However, To Get A Proper Perspective, Decision Makers Require The Reports With Full
Impact Of All Aspects And Transactions.
To Activate Reversing Journals, Go To Gateway Of Tally 1.Select

F11: F1: Accounting Feature

2. Set Use Reversing Journals & Optional Vouchers? To Yes.

3. Accept The Screen To Save.

You May Use Reversion Journal For Accounting For Or Providing For Depreciation. Since,
Depreciation Is Usually Provided During At The End Of The Year, Using The Reversing Journal
You May Include Them For Monthly Reporting Or A Specific Period To Give More Accurate
Status Or Position.
Let Us Take An Example:

On 30th June You Want To View The Balance Sheet But June Month’s Rent Is Not
35

Paid. You May Create A Scenario And Pass A Reversing Journal Entry To View

The Reports Which Will Be Effective Up To The Applicable Date. When You View The Balance

Sheet, Tally primeDisplays The Report With The Reversing Journals Included. The Voucher

Affects The Report Only For That Day, 30th June.

Example

Rent Paid A/C Dr 10000

To Rent Payable A/C 10000

(Being Rent Payable)

The Reversing Journal Is Available For Inclusion In A Scenario Report Till This Date. The
Reversing Journal Can Be Created As Of A Particular Date And Made Applicable Up To A
Different Date.
Reversing Journal Register: - All Vouchers Are Maintained In A Reversing Journal Register. These
Are Not Posted To Any Books Of Accounts And Cannot Be Included In Regular Reports. They
Can Only Be Seen Using A Scenario.

Go To Gateway Of Tally> Display> Exception Reports> Reversing Journals

Ctrl+F10 > Memo Voucher (Memorandum)

This Is A Non-Accountability And The Entries Made Using It Will Not Affect Your
Accounts. That Is Tally Does Not Post There Entries To Ledgers But Store Them In A Separate
“Memo Register”.
Some Uses for Memo Vouchers

Making Suspense Payments:- For Example :- The Company Gives An Employee Cash To Buy
Office Supplies The Exact Nature And Cost Of Which Are Unknown You Could Enter A Voucher
For The Accurate, A Voucher To Record The Actual Expenditure Details When They Are Known,
And Another Voucher To Record The Return Of Surplus Cash. However, A Simpler Way Is To
Enter A Memo Voucher
36

When The Cash Is Advanced And Then Turn It Into A Payment Voucher For The Actual Amount
Spent, When Known.

Vouchers Not Verified At The Time Of Entry: It Sometimes Happens That You Do Not
Understand The Details Of A Voucher You Are Entering. Enter It As A Memo Voucher And
Amend It When You Get The Details.
Reminder Service: You Can Enter A Memo Voucher For A Transaction That Will Takes Place In
The Future And Get Tally To Remind You About It One Day Prior To The Date.
For Example: - Insurance Premium Due, Taxes Due, Installment Payments, Post Dated
Cheque’s.
Optional Voucher (Ctrl + L)

This Is Another Non Accounting Voucher. However It Differs From The Memo Voucher
In That It Is Not A Separate Voucher Type.
By Marking It ‘Optional’ The Voucher Does Not Get Posted Anywhere But
Remains In The Optional Register.

Exercise
Evergreen Traders Is Running A Business From 01.04.16 And Keeps His Books Of
Accounts In Tally With Accounts Only. Enter Following Details
And Find Out Profit Or Loss For This Year

Particulars:
1. Received Cash As Capital For Rs.2,00,000/-
2. Cash Deposited In I.O.B For Rs.1,00,000/-
3. Credit Purchases from Charles Co. As Per Invno:12 For Rs:75,300/-
4. Credit Purchases from James Co. As Per Invno:253 For Rs:50,500/-
5. Credit Purchases from Donald Co. As Per Invno:325 For Rs:60,000/-
6. Purchase Return to Charles Co. For Rs:10,000/-
7. Purchase Return to Donold Co. For Rs:25,000/-
8. Cash Purchases from Victor Co. For Rs:35,600/-
9. Credit Sales To James Traders As Per Inv No:001 Rs:1,25,000/-
37

10. Credit Sales To Victor Traders As Per Invno:002 Rs:1,75,000/-

11. Credit Sales To Smith Traders As Per Invno:003 Rs:75,000/-
12. Cash Sales As Per Invno:004 For Rs:1,00,000/-
13. Returns From Victor Traders For Rs:25,000/-
14. Returns From Smith Traders For Rs:15,000/-
15. Payments Made By Cash
Furniture Rs:25,000/-
Salaries Rs:50,000/-
Wages Rs:30,000/-
Rent Rs:25,000/-
Electricity Charges Rs: 12,000/-
Electricity Deposit Rs: 10,000/-
16. Stationeries Purchased From Wilson Co. For Rs:2,000/- On Credit
17. Depreciate 10% On Furniture
---000---
What Is Group Summary?
Group Summary Means It Displays the Group Information Of A Selected
Accounts Group. It Displays the Stock Information for a Particular Stock Group Or It
Relates To A Selected Account Group.

There Are 28 Predefined Groups In Tally.Erp 9, Which Are Widely Used In The
Chart Of Accounts Of Many Trading Organizations. Out Of These, 15 Groups Are Primary
Groups And The Remaining 13 Are Secondary Groups.

We Can View the Group Summary Information As Under Gateway of Tally>

Display> Accounts Books > Group Summary Gateway of Tally> Display>
Inventory Books > Group Summary What Is Day Book?
Day Book Displays the List of Transactions of a Particular Day Related To
Company Which Are Entered Into The Tally Package.
It Displays All The Transactions In A List. By Selecting the Transactions From The
Day Book We Can Open the Concerned Voucher in Which
It Is Entered For Any Modifications Purpose.

We Can Open the Day Book, By Selecting Option Day Book From Display
Menu.
Tally ODBC: - With Open Database Connectivity You Can Dynamically Exchange Data Between
Tally primeAnd Any Other Application Dynamically. You Must Ensure That MS-Query Is
Installed On The Computer In Which You Will Be
38

Installing Tally.Erp 9. This Enables ODBC As Soon As Tally primeIs Installed. It Allows Other
Programs To Use Data From Tally.Erp 9, Directly. Thus, Any Program Such As MS-Excel Or
Oracle, Which Is ODBC Compliant, Can Use Data From Tally.Erp 9. Data Connectivity Is
Dynamic, Which Means That Any Update In Tally primeIs Reflected In Real Time In Other
ODBC Compliant Software. The User Can Also Extract Data From Tally primeAnd Design His/
Her Own Report Formats In Other ODBC Compliant Software.

The ODBC Server Is Displayed On The Information Block Of The Information Pane.

Bank Reconciliation Statement

When We Compare The Balance Of The Cash Book With Pass Book, The Entries Shown In
These Two Books Are Different. Hence, There Is A Need For Reconciling The Balances Shown By
These Two Books, After Taking All The Points Of Disagreement Into Consideration. The
Statement Prepared For Reconciling Both The Balances Is Known As “Bank Reconciliation
Statement’. It’s A Statement Prepared With Uncommon Adjustments Of Cash Book And Pass
Book To Find Out The Reasons Of Difference In The Balance As Shown By The Trader’s Cash
Book And Bankers Pass Book. The Preparation Of This Statement Is Not A Part Of Double
Entry System But Is Prepared In The Interests Of The Management And The Accountant.
Reasons for Disagreement between the Balances of Cash Book and Pass Book: Cheques
Deposited But Not Collected Before The Date Of Reconciliation.
Cheques Issued But Not Presented For Payment Before The Date Of
Reconciliation.
Cheques /Cash Directly Deposited In the Bank by the Customers Payments Directly Made By
the Bank On Behalf Of the Business
Dividends or Interest Collected or Credited By the Bank
Interest on Overdraft, Commission, Bank Charges Etc., Debited By the Bank in the Pass
Book
Cheques Received and Entered In the Cash Book But Forgotten To Sent To Bank Cheques
Sent To Collection But Dishonored
Mistakes in Cash Book, Mistakes in Pass Book.
Practical Problem:
1. Capital Introduced By Meera in Cash 20, 00,000
2. Cash Deposited In Andhra Bank 20, 00,000
3. Cash Withdrawn From Andhra Bank 20,000
4. Cash Transferred From Andhra Bank to SBI Bank 50,000
5. Cheque Received From Sony Company 2, 10,000
39

6. Cheque Received From Samsung Company 50,000

7. Cash Withdrawn From Andhra Bank for Personal Use 20,000
8. Salaries Paid By Cheque 20,000
9. Sales Tax Paid By Cheque 20,000
10. Cheque Issued To Sriram Company 1, 00,000
11. Cheque Received From Rao &Co 40,000
12. Cheque Received From Giri& Co 90,000 Below
The Adjustments Are As Under
1. Cheque’s Issued but Not Presented for Payment Sales
Tax 20,000
Sriram Company 1, 00,000
2. Cheque’s Deposited In Bank But Not Credited In Andhra Bank Rao & Co
40,000
Giri & Co 90,000
3. Amount Directly Debited In Bank but Not Entered In Cash Book Bank
Service Charges 1000
Bank Locker Rent 1500
Bank Insurance Premium 5000
4. Amount Credited In Andhra Bank but Not Entered In Cash Book Interest
20,000
Prepare Andhra Bank Reconciliation Statement
“Balance As Per Bank Statements” 21, 62,500
---000---

Account Information > Scenarios: - Scenario Management Is A Management Tool That

Enables Different Views Of Your Information, Both Accounts And Inventory Related, By
Selectively Including Certain Types Of Vouchers Without Affecting The Base Data.

This Is Useful In Reports With Provisional Figures Without Actually Putting The Entries
Through The Main Books. It Is Also Useful For Forecasting By Entering Forecast Figures In
Provisional Vouchers And Including Them To Get Forecasted Figures.
The Vouchers That Are Used In Scenario Management Are:-
> Optional Vouchers
> Memorandum Voucher
> Reversing Journals
Data Migration
40

Data Created In Tally 7.2 Or TCP (Tally Compliant Product) Files Created For Use With
Tally 7.2 Cannot Be Used With Tally.Erp 9. Hence, Data And TCP Files Need To Be Upgraded
For Use With Tally.Erp 9. The Tally Data Migration Tool Helps Users To Upgrade Data And TCP
Files In Order To Be Compliant With Tally.Erp 9. A Valid Tally primeLicense Is Required To
Upgrade Data Or TCP Files From Tally 7.2 To Tally.Erp 9.

Synchronization

Synchronization Is The Process Of Replicating Data Between Two Or More Computers Using
Tally primeIn A Client – Server Environment. Data Is Transferred From The Client To The
Server And Vice Versa. Tally primeOffers Control Over The Frequency Of Synchronization I.E.,
Data Can Be Replicated After Each Transaction Or Updated At Specific Intervals.

Reports Available In Tally

Accounts Reports Inventory Reports
Balance Sheet Godown Summary
Bills Payable Journal Register
Bills Receivable Movement Analysis
Cash / Bank Books Purchase Bills Pending
Cash Flow Purchase Orders
Cost Centre Summary Sales Bills Pending
Day Book Sales Orders
Funds Flow Statistics
Profit&Loss A/C Stock Category Summary
Purchase Orders Stock Summary
Purchase Registers
Sales Orders
Sale Register
Statistics
Trial Balance
Multi-Currency
Many Organizations Have Transactions In More Than One Currency. Such Transactions Have
To Be Recorded Either In The Base (Home) Currency Or In The Foreign Currency. If The
Transactions Are Recorded In Home Currency, The Rate At Which The Foreign Currency Is
Exchanged Should Be Recorded As Well. At Times You Need To Record The Transaction In
The Foreign Currency Itself When You Maintain The Balance Of The Concerned Account In
Foreign Currency.
41

Tally primeMakes It Easy To Manage Multiple Currencies, Automatic Calculations Of Exchange

Rates, Automatic Conversion Of Any Currency Used To Record A Transaction To The Currency
Of The Account, Etc.
Foreign Currency Problem
Enter the Following Transactions
1. Lloyd Started Business with 25, 00,000
2. Cash Deposited In City Union Bank 10, 00,000
3. Purchased Office Premises 5, 00,000 Paid By Cheque.
4. Purchased Furniture for Cash 20,000
5. Paid Electricity Deposit 5,000& Telephone Deposit 3,000in Cash
6. Paid Security Deposit to £4,000 by Bank Cheque
7. Cash Transferred To Andhra Bank From Cub 50000.
8. Cash Withdrawn From Cub 25000 for Personal Use.
9. Cash Transferred To Petty Cash 5000
10. Purchased 25nos Led Monitors@£1000each From Leeds Company.
11. Purchased 10nos Led Monitors For Cash@£1000 Each.
12. Sold 10nos Led Monitors@£1200each To E-City.
13. Sold 5 No’s Led Monitors By Bank Cheque @£1200.
14. 5 No’s Led Monitors Returned To Leeds Company
15. 2 No’s Led Monitors Returned by E-City.
16. Cheque Issued To Leeds Company £5000
17. Cheque Received From E-City £5000
18. Bonus Paid To Staff 25,000
19. Personal Loan Paid 5,000 in Cash
20. Total Closing Stock Has Been Disposed Off For Cash. Note: -
Pound Exchange Rate Rs 100/- Per Pound.
---000---
Ratio Analysis
Ratio Analysis Is A Simple Mathematical Expression. It Is A Number Expressed In Terms Of
Another Number. Expressing Quantitative Relationship between the Two. Ratio Analysis Is
The Technique Of Interpretation Of Financial Statements With The Help Of Various Meaningful
Ratios. Ratios Do Not Add To Any Information That Is Already Available. But They Show The
Relationship Between Two Items In A More Meaningful Way. They Help Us To Draw Certain
Conclusions; Comparison With Related Facts Is The Basis Of Ratio Analysis. Ratio May Be
Used For Comparison In Any Of These Ways.
Advantages of Ratio Analysis:-
1. Ratio Analysis Simplifies The Understanding Of Financial Statements.
42

2. Ratio Bring Out The Inter Relationship Among Various Financial Figures And Bring To Light
Their Financial Significance. It Is A Devise To Analyze And Interpret The Financial Health Of
The Enterprise.
3. Ratios Contribute Significantly Towards Effective Planning And Forecasting.
4. Ratios Facilitate Inter Firm and Intra Firm Comparison. They Bring Out the Strengths,
Weaknesses and Efficiency of Firms and Their Department
5. RatiosServe As Effective Control Tools. They Also Facilitate Establishment Of A Standard
Costing System And Budgetary Control.
Gateway of Tally > Ratio Analysis:
Ratio Analysis Screen Is Divided Into Two Parts Principal Groups And Principal Ratios.
The Principal Groups Are The Absolute Key Figures That Give Perspective To The Ratios.
The Ratios Relate Two Pieces Of Financial Data To Get A Comparison That Is More
Meaningful When Compared With Ratios Of Other Companies.
Cash and Funds Flow:

Cash Management Is Essential For Any Business. Many Companies, As They Go Into
Liquidation, Continue To Make Profits Because Of Insolvency. Businesses Shut Down Because
Of Lack Of Cash Despite Being Profitable. Cash and Fund Flow Statements Aid in Cash
Management and Are an Important Component of the Management Accounts.

Cash Flow:-

Cash Flow Statement Is A Chronological Account Of The Movement Of Cash In Hand Out Of
The Business And Includes All Cash Transactions Made With Banks Also. When Used With The
Balance Sheet And Profit & Loss Account, The Cash Flow Statement Helps To Assess The
Reasons For The Differences Between Net Income And Net Cash Flow As Well As The Effect Of
Cash/Non-Cash Investing And Financing Transactions.

To Access The Cash Flow:

Go To Gateway of Tally > Display > Cash/Funds Flow > Cash Flow.

Funds Flow:

While Cash Flow Statement Is Concerned Only With Cash, Funds Flow Takes Into Account,
The Movement Of The Entire Working Capital. It Includes Rise And Fall In Inventories,
Creditors And Debtors Apart From Cash And Bank. The Statement Reveals The Sources Of
Funds And How They Were Applied.
43

To Access The Funds Flow:

Go To Gateway of Tally > Display > Cash/Funds Flow > Funds Flow

Interest Calculation Problem

Enter All the Transactions As On 1st April 2017
1. Ravi Started Chilies Business by Investing Cash 10, 00,000
2. Cash Deposited In Dena Bank 7, 50,000
3. Cash Paid To Deposits Telephone
Deposit 2,160
Electricity Deposit 5,000
Godown Deposit 25,000
4. Purchases Office Furniture and Paid By Cheque 50,000
5. Purchases Chilies 200 Qts @2,500 per Qt from Best Chills Corporation.
6. Sold Chilies for Cash 50 Qts @4,000 per Qt
7. Paid In Cash For The Following:
Wages 1,000
Office Rent 2,500
Conveyance Charges 1,200
8. Sold Chills 50 Qtls to Mouli&Co@4,200 per Qt
9. Paid To Best Chills Corporation by Cheque 25,000
10. Sold Chilies 25 Qtls to Logi&Co@4,200 per Qt
11. Received Cheque from Mouli &Co 25,000
12. Received Cash from Logi &Co 10,000
13. Cash Paid To Followings:
Salaries 5,500
Electricity Charges 1,500
Telephone Charges 550
Printing& Stationery 500
14. Calculate Interest@12%On the Following Accounts As On
30-04-2017 and Transfer the Same to the Individual Ledger Accounts.
a. Best Chills Corporation
b. Logi &Co
15. Transfer the Net Effect of P&L A/C to Ravi Capital A/C
---000---
44

GST: Goods And Services Tax

Tax Definition: If Tax Is Levied On The Price Of A Good Or Service, Then It Is Called An
Indirect Tax. Ex: - VAT, GST.
What Is GST?

GST Stands For Goods And Services Tax Which Is Concurrent Levy Of Taxes On “Supply” Of
Goods And Services. GST In India Will Be Dual System, Where the Central and State Together
Will Levy Tax on Supply of Goods And / Or Services, Within the State (Intra-State) and Inter-
State.
Introduction to GST

GST Is A Transformational Tax Reform In Our Country Since Independence. All The Existing
Indirect Taxes Being Currently Levied By Central And State Governments Will Be Subsumed
Under GST. GST Can Be Termed As “One Tax, One Nation and One Market”. GST Is A Highly
Compliance Driven Law.
Why GST?

The Current Indirect Tax System With Multiplicity Of Taxes (Central Levy:-Excise Duty,
Service Tax, Various Cess And State Levies: - Vat, Entry Tax, Octroi, Luxury Tax,
Entertainment Taxes, Purchase Tax Etc.) - At Different Rates - At Multiple Points (At The Time
Of Manufacture, Trade, Rendering Services Etc.). This Has Led To Several Inefficiencies And
Limitation. One Of The Major Limitation Is The Cascading Effect Of Tax. Under The Current
Regime, Excise Charged By The Manufacturer On Billing To A Dealer, The Credit Of Input
Cannot Be Claimed By A Dealer, And Thus Forming Part Of Cost To Dealer Which Leads To
Cascading Of Tax.
Under GST The Credit Utilization Will Be Available Across The Supply Chain Till It Reaches The
End Consumer. Secondly, Tax On Tax Is Eliminated. Example: - Under The Current Tax
Regime, Vat Is Charged On The Assessable Value Plus On Excise Duty.
 45

What Is GST Act 2017?

The Central Government Passed Four Sets Of GST Acts In The Budget Session This Year.
These Were Central GST Act, 2017; Integrated GST Act, 2017; Union Territory GST Act, 2017
And GST (Compensation To States) Act, 2017. The Acts Were Approved By The Parliament
After They Were Introduced As The Part Of The Money Bill. Following The Passage Of The GST
Acts, The GST Council Decided The Rate Slabs For The Goods And Services To Be Taxed Under
The GST Regime. GST Components

 CGST: CGST Stands For Central GST

This Is Applicable On Supplies within the
State Tax Collected Will Be Shared To
Central
 SGST: This
SGST Stands For
Is Applicable State GST
On Supplies within the State

Tax Collected Will Be Shared To State

IGST: IGST Stands For Integrated GST

This Is Applicable On Interstate And Import Transaction Tax Collected Is

Shared Between Central And State.

GST Slabs: - GST Council Has Adopted A Four Slab Tax Rate Structure Of 5%, 12%, 18% And
28% for GST. A Separate Cess Would Be Levied On Certain Goods Such As Luxury Cars,
Aerated Drinks, And Pan Masala And Tobacco Products, Over And Above The GST Rate Of
28% For Payment Of Compensation To The States.
Registration:

Regular Dealer : North East India Aggregate Turnover Exceeds

10 Lakhs Rest of India Aggregate Turnover
Exceeds 20 Lakhs
46

Compounding Scheme : Aggregate Turnover Does Not Exceed 75

Lakhs

Registration Process: Existing Dealers Would Be Auto-Migrated and Given A 15- Digit Pan
Based GSTIN With

Following Structure.

Ex: 37AUEPP4376J1Z5

What Is HSN Code?

Harmonized System Of Nomenclature, Or HSN, Was Conceived And Developed By The World
Customs Organization (WCO) With The Vision Of Classifying Goods From All Over The World In
A Systematic And Logical Manner. It Is A Six Digit Uniform Code That Classifies More Than
5,000 Products And Is Accepted Worldwide. These Set Of Defined Rules Is Used For Taxation
Purposes In Identifying The Rate Of Tax Applicable To A Product In A Country. It Is Also Used
To Determine The Quantum Of Product Exported Or Imported In And Out Of A Country. It Is A
Crucial Feature To Analyze The Movement Of Goods Across The World. It Is A Combination Of
Different Sections, Further Drilled Down To Chapters, Which Are Further Classified Into
Headings And Sub-Headings. The Resultant Figure Is The Six-Digit Code.

GST Ledgers

Purchases, Purchases Returns

Sales, Sales Returns
Input CGST, Input SGST Output
CGST, Output SGST

Example: Purchase Of Goods 500000 Sale of Goods 550000

47

Input Cgst@9% 45000 Output Cgst@9% 49500

Input Sgst@9% 45000 Output Sgst@9% 49500

Total 590000 Total 649000

Payments:

 Mandatory E-Payment For Amount > Rs 10,000

 Online: NEFT/RTGS/Imps

 Offline: Cash/Cheque/DD/NEFT/RTGS Etc.

 Challan Is Auto-Populated, And Can Be
Downloaded
Late
Fee
•Fails to Furnish Returns
•For Monthly / QuarterlyReturn -Rs.100/-Per Day for Every Day during Which Such Failure
Continues Subject To A Maximum of Rs. 5000/-
•Annual Return -Rs.100/-Per Day for Every Day during Which Such Failure Continues Subject
To A Maximum of Rs. 0.25 % of Aggregate Turnover
Gst Reports (Or) Returns
Display Statutory Reports GST GSTR2
Gst Returns
•GSTR 1 – Outward Suppliers -10th of Next Month
•GSTR 2 – Inward Suppliers -15th of Next Month
•GSTR3 – Monthly Returns-20th of Next Month
•GSTR 4 – Compounding Tax Payer -18th quarterly
•GSTR 5 – Foreign Non Resident Tax Payer-20th of Next Month
•GSTR 6 – Input Service Distributor-15th of Next Month
•GSTR 7 – TDS -10th of Next Month
•GSTR 8 – Annual Return -31st December
Activation of GST in Tally.Erp9
48

Press the Buttons F11 and F3

*Enable GST (Goods & Services Tax) Yes

*Set / Alter GST Details Yes

Press “Ctrl+A”

Gst Problem

Enter The Following Transactions In The Books Of Indian Company As On 1st July2017.

1. Capital Introduced By Modi Rs. 35, 00,000

2. Cash Deposited In Sbi Bank 10, 00,000
3. Furniture Purchased For Cash 1, 00,000.
4. Laptop Purchased For Cheque 50,000
5. Paid Telephone Deposit 30, 000, Internet Deposit 10,000.
6. Electricity Deposit Paid By Cash 20,000, Showroom Advance Paid By Cheque 2, 00,000
7. Purchase Refrigerators 100 No’s @20,000 each from Godrej Company, Gst@28%.
8. Refrigerators 50 No’s Sold To D’mart@25,000 Each.Gst@28%
9. Purchase Refrigerators100No’s@20,000eachtoCash,Gst@28%,Discount @5%.
10. Refrigerators Sold 50 No’s @25,000 To Reliance Mart, Gst@28%.
11. Salaries Paid By Cheque 2, 00,000
12. Expenses Paid By Cheque
Sweeper Wages 10,000
Office Rent 30,000
Conveyance Charge 12500
13. 10 Nos@20,000 Each, Refrigerators Returned To Godrej Company Gst@28%.
14. Sold 50 No’s Refrigerators for Cash 25,000. Gst@28%,Discount@5%.
15. Paid 3, 00,000 to Godrej Company By Cheque
16. Received 3, 00,000 by Cheque from D’mart.
17. Received 1, 50,000 in Cash from Reliance Mart.
18. Following Expenses Paid In Cash
Electricity Bills 25,000, Telephone Bills 10,000
19. Interest Received 50,000.
49

20.10no’s Refrigerators Returned by Reliance Mart @25,000 Each,Gst@28%.

---000---
Service Tax
Service Tax Is An Indirect Tax Imposed On Specified Services (Taxable Services) Provided By
A Service Provider (Company, Individual, Firm Etc.).
Service Tax Was First Brought Into Force With Effect From 1 July 1994. All Service Providers In
India, Except Those In The State Of Jammu And Kashmir, Are Required To Pay A Service Tax
In India.
Initially Only Three Services Were Brought Under The Net Of Service Tax And The Tax Rate
Was 5%. Gradually More Services Came Under The Ambit Of Service Tax.
Section 66b Of The Finance Act 1994, Inter Alia, Provides That Service Tax Shall Be Levied On
All Services, Except The Services Specified In The Negative List. Accordingly Section 66d Of
The Act Has Specified The List Of Services Consisting Of 17 Heads Of Services Which Is
Termed As Negative List.
Service Tax Rate

In Accordance With The Annual Budget 2014-15, The Current Service Tax Rate Has Been
Increased From 12.36% To 14.5% From 15th Nov 2015.

The Provisions of Swatch Bharat Cess (SBC) @ 0.5% under the Finance Act, 2015 Are
Effective W.E.F. 15/11/2015. Accordingly, Service Tax Rate Is Increased From 14% To
14.50% W.E.F. The New Service Tax Rates Will Be Effective From 15/11/2015, And Krishi
Kalyan Cess 0.5% Added To Service Tax. So Service Tax Rate Is15%.

As Per Section 66 of Finance Act, 1994 Tax (Service Tax) @ 15% of the Value Is Payable On
Taxable Services. Thus, Total Service Tax Is 15% And It Will Be Collected In Such Manner As
Prescribed. But 1st July 2017 The Service Tax Is Increased To 18%.

Service Accounting Codes (Sac)

Similar To The International HSN Codes, India Has Adopted A Service Accounting Code (Sac)
For All Its Services. GST Will Subsume The Service Tax, Which Covers All Kinds Of Services At
A National Rate Of 15%, Apart From Other Rates In Some Cases. Since GST Is A
Combination Of Goods And Services Both, An Equable
50

Classification For Services Is Also Required. Sac Will Remain The Same Under The GST Regime.
Service Tax Credit

While You Pay Service Tax On Sale Of Services That Come Under The Service Tax Category,
You Can Adjust Service Tax Credit Availed On Purchase Of Services. This Deduction Is Called
Adjusting Credit Against Service Tax. The Difference Between The Service Tax That You Have
To Pay For Selling Services And The Service Tax Credit On Purchases That Can Be Adjusted Is
The Payable Service Tax.

Service Tax (Sales) That Is Adjustable Against Service Tax Credit (Purchases) Is Also Called
Availing Input Credit.

Service Tax Problem

Enter All the Transactions As On 01-04-2017
1. Parthiv Started Business With Rs 3, 50,000 And Deposited In Dena Bank 75,000
2. Furniture Purchased 70,000 and Machinery Purchased For 20,000 for Office Use Paid By
Cash
3. A. Sales Advance Received From Sreesanth 25,000 in Cash
B. Purchases Advance Paid 35,000 to Reyna in Cash
4. Purchased Goods from Raina for 1, 00,000
5. Purchased Laptop Computer For Office Use From Zenith Computers 35,000.
6. Sold Goods to Sreesanth 1, 25,000
7. Sold Goods To Harvinder 25,000 & Cash Received For The Same.
8. 10% Of Capital Introduced Has Been Withdrawn By Parthiv From Dena Bank For Personal
Use.
9. Cash Received From Sreesanth 98,500 In Full Settlement Of His Account.
10. Cash Paid Into the Bank 95,000
11. Purchased 100 No’s Shares For @300 each &Brokerage Paid 200 in Cash.
12. Goods Worth 15,000 Found Defective And Returned To Raina & The Balance Due To Him
Has Been Settled By Cheque For 48,500 In Full Settlement.
13. Sold 20 No’s Shares for Cash@350 Each & Brokerage Paid 200
14. Goods Worth 18,900 Purchased From Dileep, and Sold the Same to
Manohar27, 000
51

15. Manohar Returned Goods Worth 900, Which Were Sent Back To Dileep.
16. Issued Cheque For Godown Rent 5000.
17. Paid Salary to Accountant 7500 for Cash
18. Cash Received From Salesman 25000 for the Cost of Goods Sold By Him after Deducting
Conveyance Charges 1500
19. Goods Worth 3000 Have Been Taken By Parthiv For Personal Use.
20. Goods Worth 9000 Have Been Distributed Under 1+1 Scheme As Free Gifts On Cash Sales
Of Goods.
21. Audit Services Purchased 25000 from Mr.Maaruthi (C.A)
22. Closing Stock Is Valued At 7, 50,000.
---000---
Tax Deducted At Source (Tds)
TDS Means Tax Deducted At Source. The Concept Of TDS Was Introduced In The Income Tax
Act, 1961, With The Objective Of Deducting The Tax On An Income, At The Source Of Income.
It Is One Of The Methods Of Collecting Income Tax, Which Ensures Regular Flow Of Revenue
To The Government.
1. Buyer:
According To Income Tax Act, The Buyer Is One Who Makes Payments As Salary,
Rent, And Interest On Securities, Dividends, Insurance, Commission, Professional Tax, And
Commission On Brokerage, Commission Of Lottery Ticket Etc.

2. Seller: Seller Is The One Who Receives The Above Mentioned Payments. The Buyer Who
Pays The Amount Shall Deduct Tax From The Amount Payable And Permit The Same To
Income Tax Department.
The Buyer Issues Form 16-A to the Seller as A Proof for Payment of Income Tax.
The Features Of TDS In Tallyerp9 Are Very Easy And Flexible. The User of Tally
.Erp9 Relating to TDS Can Achieve the Following Functions:
1. TDS Collection
2. Partial (Or) Full Payment of Collection to the Income Tax Department.
3. Tracking of Transactions, From Deduction to Payment.
4. Challenge Management
5. Channelization of Prompt and Accurate Filing of Returns.
As Per Finance Act, For The Financial Year 2009-10 Surcharge Or Cess Is Not Applicable For
TDS With Effect From 1st April, 2009.Present 10% TDS Rate
52

Applicable On Rent. If Pan Card Number Is Not Submitted TDS Rate Is 20% On Rent.
Interest And Rent Payment In Respect Of Current Rate Of Deduction For Tax At Source Is
10%.
Press The Button “F11”& F3 At Gateway Of Tally, And Set The Feature “Enable TDS- Yes” In
“Statutory Features”. And Select The Option Quiksetup From Gateway Of Tally Menu To
Create TDS Ledgers.

 Tan Will Be Checked For 4 Alphabetic, 5 Numeric, 1 Alphabetic Characters, In That Order
Ex:- Sdwa62541n
 Pan Will Be Checked For 5 Alphabetic, 4 Numeric, And Followed By 1 Alphabetic Character,
In That Order. The 4th Character Will Be Checked For A Valid Deductee Type (C, P, H, F, A, T,
B, L, J, G). Ex:- Auepp4376j

Tax Deducted At Source Problem

A.Opening Balances
Cash on Hand 15, 00,000
Cash at SBI 12, 00,000
Furniture 3, 00,000
Vehicles 7, 00,000
Partner’s Capitals
Srinivas 26, 75,000
Krishna 25, 75,000
Opening Stocks
LCD Cameras 25 No’s @50,000 each
Computers 20 Units @15,000 Each
C. Transactions
1.Additional Capital Introduced By Partners Srinivas
8, 50,000
Krishna 9, 50,000
2. Sales Advance Received From Ravi 2, 00,000
3. Purchases Advance Paid To Acer Company 1, 50,000
4. Cash Deposited In Sbi 5, 00,000
5. Cash Withdrawn From Sbi 25,000
6. Loan Received From Sbh by Cash 2, 50,000
7. Cash Transferred To Andhra Bank from Sbi A/C 45,000
8. Shares Purchased For Cash 100 Shares @200 Each
9. Cash Deposited In Federal Bank as Fixed Deposit 50,000
10. 25 No’s LCD Cameras@50,000 Each, Purchased from Delhi Acer
Company.Igst@18%
53

11. 50 Units Computers Purchased From HCL Company@15,000each.

Gst@18%
12. 2 No’s LCD Cameras Purchased for SBI Cheque @50,000 Each@18%Igst.
13. 5units Computers Purchased For Cash @15,000each @18%GST.
14. 5 No’s LCD Cameras Returned To Acer Company @50,000 Each@18%Igst.
15. 10 Units Computers Returned To HCL Company @15,000 Each@18%GST.
16. 10 No’s LCD Cameras Sold To Telangana Ravi@60,000 Each, Igst@18%.
17. 20 Units Computers Sold To Anil@20,000each,Gst@18%
18. 2 No’s Lcd Cameras Sold For Cash@60,000each, @18%IGST
19. 5units Computers Sold For SBI Cheque@20,000each@18%GST.
20. Salaries Paid To Staff By Cheque 25,000
21. Building Rent Paid By Cheque 2, 50,000 to Swarna Complex.
22. Cash Received From Ravi 1,00,000
23. Cash Received From The Following
Dividends 95,000
Interest 90,000
Commission 75, 000
24. SBI Cheaque Issued To Advertisement 5,000
25. 2 No’s Lcd Cameras Returned By Ravi@60,000each @18%Igst.
26. 5units Computers Returned By Anil@20,000each@18%GST
27. Cash Transferred From Cash to Petty Cash 5000
28. Cash Paid To The Following
Traveling Expenses 2,500 Staff
Welfare 500
Stationery 1,250
29. Transfer the Net Effect of P&L A/C To Partner’s Capital Accounts Equally.
000
Payroll

Introduction

Tally Payroll Is Integrated With Accounting To Give The User The Benefits Of Simplified
Payroll Processing And Accounting.

Tally Payroll Enables Users to set up and Implement Salary Structures, Ranging from Simple
to Complex, as per the Organization’s Requirements.

Tally Payroll Also Supports Configurable Formats For Pay slip Printing; Flexible Salary/Wage,
Attendance, Leave And Overtime Registers; Gratuity And Expat Reports.
54

Payroll Info.

The Payroll Info Allows You To Set Up The Employee Defaults And Standard Payroll
Information With Common Payroll Fields Used For Calculating Earning And Deductions.

Go To Gateway of Tally > Payroll Info. Payroll

Info:

 Pay Heads
 Employee Groups
 Employee
 Salary Details
 Units (Work)
 Attendance/Production Types
 Voucher Types

Creating Units (Work)

In The Units Creation Screen, Select The Type Of Unit From The List. Select The Symbol From
The List.

A Simple Unit In Tally Is A Single Independent Unit And Has No Relationship With Other Units,
While A Compound Unit Refers To Two Simple Units Having An Arithmetical Relationship And
Is Not A Distinct Unit.

Attendance/Production Type

The Attendance / Production Type Is Used To Record The Attendance And Production Data.
Based On The Component (Pay Head) Structure, You Can Define Multiple Attendance /
Production Types.

Examples for Attendance / Production Types Are No. Of Days Present Or Conversely, No. Of
Days Absent And Production Based Such As Hours Worked, Number Of Pieces Produced.

Pay Heads

The Salary Components Constituting Pay Structures Are Called Pay Heads. A Pay Head May Be
An Earning, Which Is Paid To An Employee, Or A Deduction, Which
55

Is Recovered From His/hers Salary. The Value Of These Pay Heads Could Be Either Fixed Or
Variable, For Each Payroll Period.

Employee Group

Tally Allows You To Set Up Default (Common) Information For Employees. An Employee
Group Allows You To Group Employees In A Logical Manner.

For Example, By Department or Function Such As Production, Sales, Administration and So

On, Or By Designation Such As Managers, Supervisors, Workers and So On.

Salary Details

Salary Details Is Used To Define A Pay Structure To An Employee Or To An Employee Group

To Speed Up The Entry Of Individual Employee’s Pay Structure.

Select The Basic Pay Heads That Applies Most For Your Employees And Create As An
Employee Group. However, It Is Not Compulsory For All Employees To Have The Same
Compensation Structures As Of The Employee Group. If Required, A Pay Head Element Or Its
Value May Be Added, Deleted Or Altered At Individual Employee Level.

Payroll Vouchers

In Addition To The Existing Voucher Types In Accounting And Inventory Module, Two New
Voucher Types Attendance And Payroll Are Enabled When Payroll Feature Is Activated In F11:
Features.

Go To Gateway of Tally > Payroll Vouchers

Payroll Voucher: - Is A Document To Manually Enter One-Time/Ad-Hoc Payroll Transactions

For Individual Employees; As Well As Payroll Processing Activity For All Or Selected
Employees, Using Auto Fill Functionality.

Pay slip

A Pay slip is a Document Issued to an Employee That Itemizes Each Component of Earnings
and Deductions, And the Net Amount Paid to an Employee for a Given Pay Period. It Provides
Visibility To An Employee Of How The Net Amount Has Been Arrived At.
56

Go to Gateway of Tally > Display > Payroll Reports > Statement of Reports > Pay slip

Problemno.1: - Calculate The Net Salary Payable To Mr. Ravi Accountant For The Month Of April
As Per The Following Particulars.

Cash in Hand 1, 00,000

Basic Salary 15,000 per Month

Da@50% on Basic Salary Hra@20%

,,

Cca@10% ,,

Pf@12% on Salary (Salary Means Basic Salary+Da) Personal

Loan 3000 P.M

Esi@7% on Salary Professional Tax

Deducted From Salary

Above 15000 - 150

,, 20000 - 200

---000---

Problem No.2:- Mr. Dinesh Is A Sale Executive In Dasarth Motors Company Worked On
Attendance Base. Find Out His Net Salary For The Month Of May By Using Below Information.

Cash In Hand 50,000 Basic

Salary Rs 500 per Day

Da 250 per Day

Leaves In May Month > 5 Days Loss

of Pay > 2 Days

---000---
57

Accounts with Inventory

It Is The Second Type Of Company, And Default Company In Tally.Erp 9. It Is Used By Large
Scale Industries And Manufacturing Concerns To Maintain Multiple Stocks In Multiple
Godowns.
In This Type Of Company The Following Three New Options Can Be Seen And Available
In Gateway Of Tally.
 Inventory Info
 Inventory Vouchers
 Stock Summary
Gateway of Tally > Inventory Vouchers
All the Transactions Relating To the Company Can Be Entered With the Help of the Following
Vouchers
F4>Contra Voucher
F5>Payment Voucher
F6>Receipt Voucher
F7>Journal Voucher
Alt+F7>Stock Journal:-
This Voucher Is Used To Record The Stock Particulars Transferred From One Godown To
Another Godown Of The Same Company.
Sales Vouchers
1. Alt+F5> Sales Order
This Voucher Is Used To Record The Particulars Of Stock Ordered By The Customer On
Account Of Credit Sales.
2. Alt+F8 >Delivery Note
This Voucher Is Used To Record the Particulars of Stock Delivered To the Customer On
Account Of Credit Sales
3. F8 (Ctrl +V) >Sales Voucher
This Voucher Is Used To Record The Sales Transactions Relating To The Stock Delivery
Through Delivery Note. It Is Necessary To Prepare This Voucher To Up- Date Sales Account
For The Stock Delivered By Delivery Note.
4. F8 >Sales Invoice(Direct Sales)
It Is Used To Record All Types Of Sales Transactions When This Voucher Is Prepared Stock
Information Godown Information Along With Accounts Information Will Be Up-Dated.
5. Ctrl+F8>Credit Note(Sales Returns)
This Voucher Is Used For Recording The Transactions Relating To Goods Received From
Customers On Account Of Sales Returns.
6. Ctrl+F6 > Rejections In
58

It Is A Linking Voucher. It Is Used To Update The Stock Information After Entry Of Credit Note
For Sales Returns.
Purchases Vouchers
1. Alt+F4 > Purchase Order
This Voucher Is Used To Record The Particulars Of Stock Ordered On Account Of Credit
Purchases.
2. Alt+F9 > Receipt Note
This Voucher Is Used To Record The Particulars Of Stock Received From The Suppliers On
Account Of Credit Purchases For The Purchase Order Sent.
3. F9 (Ctrl + V) >Purchases Voucher
This Voucher Is Used To Record The Purchase Transactions Relating To The Stock Received
Through Receipt Note. It Is Necessary To Prepare This Voucher To Up-Date Purchases Account
For The Stock Received By Receipt Note.
4. F9 > Purchase Invoice
Used to Record All Types of Purchase Transactions When the Voucher Is Prepared Stock
Information, Godown Information Along With A/C’s Information Will Be Updated.
5. Ctrl+F9 >Debit Note (Purchase Returns)
This Voucher Is Used For Recording The Transactions Relating To Goods Sent Back To
Suppliers On Account Of Purchase Returns.
6. Alt+F6 > Rejections Out:-It Is a Linking Voucher. It Is Used To Up-Date The Stock
Information After Entry Of Debit Note For Purchases Returns.
What Is A Godown, How To Create Multiple Godowns
Godown Means Place, Where Entire Stock of the Company Is Stored Is
Known As Godown. The Godown May Contain Different Stock Groups, Stock Categories and
Stock Items at Various Levels.
To Create Multiple Godowns In Tally Follow The Steps:
 Open The Company
 Press F11 And F2 At Gateway Of Tally
 Set Option “Yes” To Maintain Multiple Godowns
 Press Ctrl+A To Save.
 Select Inventory Info At Gateway Of Tally
 Select Godowns And Press Enter
 Select The Option Multiple Godowns And Create
 Type The Godown Name, Select The Appropriate Godown Under Which New Godown Will
Work.
 Press Ctrl+A To Save.
59

 Note: - Press The Button F11 (Company Features) And F2 To Activate Inventory
Features.
---000---
Enter the Following Transactions
1. Started Business With The Trade Name Jubilee Jewellers
> Johnpeter Opening Capital 30, 00,000
> Opening Stock
25gms Gold Necklaces 50 No’s @60,000each Stock Being
Maintained At Showroom-I
2. Additional Capital Introduced By Johnpeter 50, 00,000
3. Opened Bank A/C in American Express Bank &Deposited Rs 28,
00,000
4. Purchased Furniture For Rs 1,00,000 And Paid By Cheque
5. Purchased Electronic Weighing Machine Rs15000 And Paid By Cheque
6. Purchased 1computer For Office Use Rs25000 And Paid By Cheque
7. Cash Withdrawn For Personal Use Rs 10000
8. Cash Withdrawn From Bank For Business Use Rs 100000
9. Paid Telephone Deposit Rs 3000 & Electricity Deposit Rs10000 in
Cash
10. Paid Advertisement To Sridevi Add Agency Rs 1,
75,000 by Cheque
11. Interest Received 95000
12. Sales Order Received From SS Jewelers For The Followings
> 35 No’s 25gms Necklaces@75000 At Showroom No.1 Gst@3%
13. 5nos Of 25gms Necklaces Sales Invoice Made For Bank Cheque @75000 At Jubilee
Showroom-I @3%GST.
14. Stock Delivered To Ss’ Jewelers For The Sales Order Received
15. 2 No’s 25gms Necklaces received back from a Customer Which Has Been Settled in
Cash.
Closing Stock Has Been Transferred To Showroom-II (Gold under Schedule 3)
---000---
Problem on Inventory Vouchers
Best Company Started A Business From 01.04.17 And Maintains His Accounts In Tally With
Inventory.
> Opening Balances As On 01-04-2017
Cash in Hand 5, 00,000
Cash at Sbi 2, 00,000
Office Buildings 5, 00,000
Vehicles 50,000
60

Mr. Best Capital 50, 00,000

> Opening Stocks As On 01-04-2017
LG Company P IV Computers, 50units@25000each (Godown No.1)
LG Company 42 Inches Plasma TVs, 50 No’s @50,000 Each (Godown No.2) C.
Transactions
1. Additional Capital Introduced By Mr. Best 7, 00,000
2. Cash Deposited In Sbi 5, 00,000
3. Cash Transferred From SBI to Andhra Bank 75,000
4. Sales Advance Received From Radhakrishna 3, 00,000
5. Sales Advance Received From Jagan 50,000
6. Purchase Invoice Received From Lg Co for The Following
> Lg Computers 25 Units
> Lg Plasma TV’s 10 No’s
7. 2 No’s Plasma TV’s Returned To Lg Co @50,000each,
8. Sales Invoice Sent To Radhakrishna for The Following
> 10 No’s Plasma Tvs@60,000each
> 10 Units Computers@ 30,000each
9. 5 No’s Plasma TV’s Transferred To Godown-1@50,000 Each from Godown-2
10. 5 Units Computers Sales Invoice Sent To Jagan@30,000each
11. 5 Units Computers Transferred To Godown-2@25,000each From Godown-1
12. 2 No’s Plasma TVs Returned By Radhakrishna@60,000 Each. At Godown No.1,
13. SBI Cheque Received From Jagan 50,000
14. Cash Received From Radhakrishna 1, 50,000
15. Cash Deposited In Sbi A/C 11, 00,000
16. Fully Settled the Lg Co A/C by Cheque
17. Gst@28% Applicable On Plasma Tvs,Gst@18% Applicable On Computers
---000---
Point Of Sales
Point Of Sales Is Considered A One-Step Billing Process. This Means That Entering The Order
And Generating The Invoice And Receipt Of Amount Are Considered To Be Part Of The Same
Step. This Is Normally Used In An Environment Where The Customer Is Making The Purchase
In Person And The Invoicing Process Is Part Of The Checkout Process.
The POS (Point-Of-Sales) Invoice Feature Allows You To Create Invoices At A Point Of Sales
And To Collect Payment From Your Customers. POS Invoice Allows You To Create Invoices In
Seconds And Also Print And Mail The Invoices.
Problem:

1. Stock On Hand At Books & Stationeries

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a) Apsara Pencil Boxes 50nos@120each

b) Camilin Geomentory Boxes 100nos@65each
2. Sales Price A)Pencil Box@ 150each B)Geomentory Box@ 100each
3. Goods Sold The Customer. Paid By Andhra Bank Cheque 3500, Indian Bank Credit Card
4200 Gift Voucher: Reliance Co 2000, Cash 3000.
4. Items Sold:- Geomentory Boxes 50 Pencil Boxes 50
Working:-1.Create New Company A/C’s With Inventory

2. Press the Buttons F11&F2

A) Maintain Multiple Godowns >Yes
B) Maintain Actual and Billed Quantity>Yes Press
Ctrl+A

3. Inventory Information:-Create No’s, Books Stationeries, Stock

Groups, Stock Items, And Also Enter Opening Stock.

4. Create Necessary Ledger A/C’s (Multiple Ledgers>Create)

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Manufacturing Journal

In Manufacturing/Assembling Organizations, There Are Number Of Components That Go Into

The Manufacturing/ Assembling Of Finished Goods. Once, The Bill Of Materials Is Created, You
Can Use Manufacturing Journal And Specify The Quantity Of Finished Goods That Are To Be
Manufactured.
Problem: -
Fresh Pickles Company Limited Decided To Manufacture 1000 Tons Of Mango Pickle With The
Following Raw Materials.
Enter The Following Transactions & Find out What Could Be the Effective Rate per Ton of
Mango Pickle.
I. Opening Stock of Raw Materials As Under
Mangoes 10tons @6000 per Ton
Turmeric 1ton @35000 Per Ton
Salt 1ton @2000 Per Ton
Sunflower Oil 3tons @40000 per Ton
Mustered 2tons @ 18000 per Ton Red
Chili Powder 2 Tons @30000 per Ton

II. Estimated Raw Materials (Per 10 Tons of Mango Pickle)

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Mangoes 5 Tons @6000 per Ton

Turmeric 1ton @35000 Per Ton
Salt 1ton @2000 Per Ton
Sunflower Oil 2 Tons @40000 per Ton
Mustered 1 Tons @ 18000 per Ton Red
Chili Powder 1 Tons @30000 per Ton
III.Followings Are Estimated Expences&Overheads
Wages@3%
Power@5%
Overheads@3%
Machine Maintenance@5% Depreciation
on Machine@10%
Working:
1. Create Company “Accounts With Inventory”
2. Press The Button F12
3. Select The Option Accounts And Inventory Information
> Allow Component List Details  Yes
4. Create Units Of Measure (Ton’s)
5. Create Stock Group ( Raw Material& Finished Goods)
6. Create Stock Items
7. Create Necessary Ledgers(Multiple Ledgers)
8. Creation Of Manufacturing Journal Accounts
Info > Voucher Types > Create
---000---
*Fluent Medicines Company Ltd Decided To Manufacture 2000kgs Gecko
Mycenae with the Raw Material Effective Rate per Kg of Gecko Mycenae
I. Opening Stock Of Raw Material Under
Ingredient 1 1000kgs@ 500
Ingredient 2 1000kgs@200
Ingredient 3 1000kgs@100
II. Estimated Raw Material Per 100kgs Of Gecko Mycenae Ingredient
1 500kgs@ 500
Ingredient 2 35kgs@200
Ingredient 3 150kgs@100
III. Following Estimated Expenses And Overheads
Salaries 25%
Salaries of Market Staff 10%
Fuel 5%
Administrative Expenses 15%
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Sampling Charges 5%
Power 15%
Primary Packing 20%
Ans: 5,304 per Kg
Job Costing
Job Costing Is A Form Of Specific Order Costing, Which Applies To A Job
Undertaken According To Customer Requirements And Specifications. Tally primeEnables The
Tracking Of Cost And Revenue Information Down To The Smallest Detail. With A View To
Ascertaining The Actual Costs Incurred For Each Job, Each Job Is Assigned A Job Number Or
Job Name. Job Costing Systems Then Accumulate Costs Separately For Each Product Or
Service, Based On The Jobs Undertaken, For Each Product Or Service. Some Of The Examples
Of Job Costing Are Interior Decoration, Construction, Architecture, and Printing Etc.

Use of Job Costing

 To Determine The True Cost For Each Job Broken Down By Locations
 To Determine The Revenue And Expenditure And Therefore The Profit
Associated With Each Job
 To Track Overhead Costs By Allocating Them For Each Job
 To Identify Loss On Projects At An Early Stage

Problem: ABC Construction Company Started Two Projects One at Guntur and Another at
Amaravathi. Their Books Are Showing The Following Particulars & Enter The Transactions Find
Out The Profit Or Loss For Each Project And Also Overall Net Result On The Two Projects Using
Job Costing.
1. Stock On Hand At Vijayawada Warehouse
> Cement 500 Bags @250/-
> Iron 100 Tons @16,300/-
2. Cash On Hand 25, 00,000
3. Cash Deposited In Indian Bank 15, 00,000
4.
5. Purchases The Following Raw Materials From The Local Suppliers
Particulars For Guntur For Amaravathi
Project Project

Cement 1000 Bags 1500 Bags

Iron 300 Tons 500tons

6. Sales At Projects Are As Under

Particulars Customer Sale Value
Name
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Guntur Customer 1,75,00,000

Project Guntur
Amaravathi Customer 1,85,00,000
Project Amaravathi

7. Internal Consumption of Material Is As Under

Material Amaravathi Guntur
Used
Cement 200 Bags 300 Bags
Iron 200 Tons 200 Tons

8. Material Transferred To Vijayawada Ware House

Material From Amaravathi From Guntur
Cement 20bags 15bags
Iron 10 Tons 15tons

9. Cash Payments Made To The Following Expenses

Name Of Amaravathi project Guntur Project
Expenditure
Staff Salaries 15000 10000
Staff Welfare 7000 3000
Exp

Telephone 7000 5000

Bills

Transport 25000 10000

Charges

Wages 13000 12000

Working:-
1. Create Company “Accounts with Inventory”
2. Press the Buttons F11 and F1 (Accounting Features)
> Maintain Cost Centers – Yes
> Use Cost Centre for Job Costing – Yes
> More Than One Payroll/Cost Category – Yes
3. Press the Buttons F11 and F2 (Inventory Features)
> Maintain Multiple Godowns – Yes
> Use Different Actual &Billed Quantity - Yes
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4. Create Cost Category as “Projects’

5. Create Cost Centers Taking Each Project as a Cost Centre
6. Create Units of Measure (Bags & Tons)
7. Create Vijayawada, Amaravathi&Guntur Ware Houses (Godowns)
8. Create Raw Materials Group (Stock Group)
9. Create Stock Items and Enter Opening Stock
10. Enter Cash Opening Balances (Single Ledger>Alter)
11. Multiple ledgers
TCS ( Tax Collected At Source) In Tallyerp9
TCS Is The Tax Collected At Source By The Seller (Collector) From The Buyer/ Lessee
(Collectee/ Payee). The Goods Are As Specified Under Section 206c Of The Income Tax Act,
1961.

Example:

If Purchase Value Of Goods Is Rs.10, 000/-, The Buyer Will Pay An Amount Of Rs.10, 000/- +
X (X Being The Value Of TCS As Prescribed Under Income Tax Act, 1961) To The Seller. The
Seller Will Deposit The Tax Collected At Source (TCS) At Any Of The Designated Branches Of
The Authorized Banks.

The Seller, Lessor Or Licensor, Is Responsible For The Collection Of Tax From The Buyer,
Lessee Or Licensee. The Tax Is Collected For Sale Of Goods, On Transactions, Receipt Of
Amount From The Buyer In Cash Or Issue Of Cheque, Draft Or Any Other Mode, Whichever Is
Earlier.

 Under TCS,
 Central Government
 State Government
 Local Authority
 Statutory Corporation Or Authority
 Company
 Partnership Firm
 Co-Operative Society

Seller Is Defined As Any Of The Following:

Any Individual/HUF Whose Total Sales, Gross Receipts Or Turnover From The Business Or
Profession Carried On By Him Exceeds The Monetary Limits
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Specified Under Clause (A) Or Clause (B) Of Section 44ab During The Previous Year.

A Buyer Is Classified As A Person Who Obtains Goods Or The Right To Receive Goods In Any
Sale, Auction, Tender Or Any Other Mode. The Following Are Not Included:

 Public Sector Companies

 Central Government
 State Government
 Embassy Of High Commission, Consulate And Other Trade Representation Of A Foreign
State
 Any Club, Such As Social Clubs, Sports Clubs

Goods And Transactions Classified Under TCS Are Listed Below:

 Alcoholic Liquor For Human Consumption Including Indian Made Foreign Liquor (IMFL)
 Tendu Leaves
 Timber Obtained Under A Forest Lease
 Timber Obtained By Any Mode Other Than Under A Forest Lease
 Any Other Forest Produce Not Being Timber Or Tendu
 Scrap (Scrap Means Waste And Scrap From The Manufacture Or Mechanical Working Of
Materials Which Is Usable As Such Because Of Breakage, Cutting Up, Wear And Tear And
Other Reasons)
 Licensing Or Leasing Of Parking Lot, Toll Plaza
 Mining And Quarrying

The End