There are 15 Primary Groups, 13 Secondry Groups and Two Ledgers by default in Tally.

The Reports
like, Trading and Profit and Loss account and Balance Sheet are designed using Primary Groups,
Secondry Groups are for the help of Primary Groups.

List of Groups
Branch / Divisions
Capital Account
Reserves & Surplus
Current Assets
Bank Accounts
Cash-in-Hand
Deposits (Asset)
Loans & Advances (Asset)
Stock-in-Hand
Sundry Debtors
Current Liabilities
Duties & Taxes
Provisions
Sundry Creditors
Direct Expenses
Direct Incomes
Fixed Assets
Indirect Expenses
Indirect Incomes
Investments
Loans (Liability)
Bank OD A/c
Secured Loans
Unsecured Loans
Misc. Expenses (ASSET)
Purchase Accounts
Sales Accounts
Suspense

List of Ledgers
Profit & Loss A/c
Cash A/c
Groups in Tally

Groups

In the modern way of accounting, all financial entries are performed using Leders or account
heads.

Tally follows the ‘Single Ledger’ concept of accounting. It is advisable to Group / Classify
ledger

information based on their functions. Groups are helpful in classifying and identifying account
heads
based on their nature. Grouping helps in presenting summarized information. Regrouping of
accounts

is also permitted by Tally. The single ledger concept eliminates the need for sub ledgers and

corresponding control accounts in General Ledger. Traditionally, grouping of accounts is a

postaccounting

activity, but it leads to delayed reports that are not available at hand when required. At the

highest level of grouping, accounts are classified into Assets, Liabilities, Income and Expenses.

Groups by Default (Pre-defined Groups) : Tally provides you with a number of pre-defined

Groups to save you from unnecessary burden of creating frequently used Groups. In these
Groups,

some are Primary and some are Subgroups. Subgroup is a part of the main group.
 Predefined Groups

Alias names for the Groups are shown inside a square bracket.

Detailed Description of Pre-Defined Groups

                 Capital in Nature                    

                  Revenue in Nature
        
1. Capital Account                                    1 Sales Account
             
i. Reserves and Surplus

[Retained Earnings]      2 Purchase Account

                                                       

a. Bank Accounts

b. Cash-in hand

c. Deposits (Asset)

d. Loans & Advances (Assets)

e. Stock-in-hand

f. Sundry Debtors
    3 Income Direct
3 Current Liabilities                                              

a. Duties and Taxes

b. Provisions

c. Sundry Creditors
    4 Indirect Income[ Income Indirect]
4 Fixed Assets                                                 
    5 Direct Expenses[ Expenses Direct]
5 Investments                                                
   6 Indirect Expenses [Expenses Indirect]
6 Loans (Liability)                                                
a. Bank OD Accounts

[Bank OCC Accounts]

b. Secured Loans

c. Unsecured Loans

7 Suspense Account

8 Miscellaneous Expenses (Asset)

9 Branch / Divisions

Alias names for the Groups are shown inside a square bracket.

Detailed Description of Pre-Defined Groups

1) Capital Assets :It holds Capital and Reserves of the company. For example, Proprietor’s or
Owner’s Capital Account, Partners Capital Account, Share Capital.

a) Reserves and Surplus [Retained Earnings] : Related to Reserves. Retained Earnings is the
alias name for Reserves and Surplus, e.g. Capital Reserve, General Reserve, Reserve for
Depreciation.

2) Current Assets : It consists of 6 subgroups. If all the assets of the company could not be
allocated in any of these subgroups then the primary group ‘Current Assets’ can accommodate it.

a) Bank Accounts : It holds Current Savings, Short-Term Deposits, etc.

b) Cash-in-Hand : This holds Ledger Account for Cash. More than one Cash Account can be
opened if needed, e.g. Petty Cash A/c.
c) Deposits (Asset) : It holds deposits like Fixed Deposits, Rental Deposits, Security Deposits,
etc. that is the deposits made by the Company (not received).

d) Loans & Advances (Assets) : It is for holding loans given by the company which are
nontrading in nature, e.g. Salary Advance, Advance for Purchase of Fixed Assets, etc.

e) Stock-in-Hand : It holds Opening and Closing Stock. It is a special Group. The balances
depend on the type of Inventory Management option selected while creating a company, e.g.
Raw Materials A/c, Work-in-Progress, Finished Goods, etc.

i) Integrated Accounts-cum-Inventory : Transactions in Inventory records are permitted

and the corresponding changes are reflected in the Balance Sheet as Closing Stock. You
just can not alter the Closing Stock balance directly.

ii) Non-integrated Accounts-cum-Inventory : No transaction permitted. It holds only the

Opening and Closing balances. The authorized users can directly alter closing balances as
no Vouchers can be passed for these accounts.

f) Sundry Debtors : It holds the accounts of the debtors, who owe money to the business.

3) Current Liabilities : It holds the Outstanding Liabilities, Statutory Liabilities and some other
minor liabilities. Liabilities such as PF, TDS, ESI also fall under this Group.

a) Duties and Taxes : it holds the accounts of trade duties, Excise, Local Sales Tax, Central
Sales Tax.

b) Provisions : This acts as a reserve like Provision for Depreciation, Provision for Taxation,etc.

c) Sundry Creditors : It holds the account of the trade Creditors of the Company.

[One should not open the Supplier Account under Purchase Account Group, as Purchase A/c is a
Revenue A/c.]

4) Fixed Assets : It is a convenient place for holding the Fixed Assets of the company.

5) Investments : It holds the accounts of overall investments, like Bonds, Shares, Govt.,
Securities, Long-Term Bank Deposits, etc.

6) Loans (Liability) : It keeps an account of the Loans taken by the Company.

a) Bank OD Accounts [Bank OCC Accounts] : Bank OCC is the alias name for Bank OD
Accounts. It holds Over Draft Account like Hypothecation Accounts, Bill Discounting
Account, etc. of the Bank.

b) Secured Loans : It holds the accounts of the loans taken by the company from Banks and
other Financial Bodies by mortgaging its Fixed Assets. It is a secured loan so it has to be
returned from the fixed asset of the company even if the company fails.

c) Unsecured Loans : This is an unconditional loan obtained from Partners / Directors or

outside parties.

7) Suspense Account :As the name implies, it is created when there is some discrepancy in the
Balance Sheet. It is a Balance Sheet item, e.g. Travelling Advance whose details will be known
only after the submission of TA bill.

8) Miscellaneous Expenses (Asset) : This is mainly for legal disclosure requirements, like
Schedule VI of Indian Companies Act. It is rarely used.

9) Branch / Divisions : It holds the accounts of all the Sister Concerns, Branches, Divisions,
Affiliation, etc. of the existing company.

10) Sales Account : It holds the different Sales Accounts. The Sales Account can be categorized
as
Types of Sale (Domestic Sales, Export Sales) and the Tax slabs. To have an idea of net sales
after return, one can even open an account Sales Return under the Group Domestic Sales. [don’t
open Customers account under the Group Sales Account.]

11) Purchase Account : It holds the accounts related to purchase.

12) Direct Income [Income Direct] : It holds the account of the direct income like income due
to sales of goods. A Professional Service Company may like to open an account as Professional
Fees

instead of Sales Account, under this Group.

13) Indirect Income [Income Indirect] : It holds the accounts of non-sale indirect income, like
income from Rent Received, Commissions Received, Interest Received, etc.

14) Direct Expenses [Expenses Direct] : It holds the direct trading expenses of the factory, like
Wages paid to Labours, Transportation, Electricity Bill.

15) Indirect Expenses [Expenses Indirect] : Expenses incurred in the administrative building,
like Salary paid to Staff, Maintenance of Vehicle, etc.

Tally automatically opens the Profit & Loss Account which is a reserved primary account. You
may

use this account to pass adjustment entries through journal vouchers, e.g. transfer of profit or loss
to

Capital or Reserve account.

Tally Accounting Ledgers

Ledgers are the actual account heads to which a transaction is identified. Ledgers are very
important for Voucher entries. In Tally, Ledgers are allocated to within Groups for better control
of the Accounts.

As you create a Company, two Ledger Accounts Cash and Profit and Loss A/c are created by
default. You cannot create another Profit and Loss A/c but any number of Cash accounts may be
created.

Note :--

• Only the authorized users can alter Ledgers.

• One can not alter :

o Parent of Ledger under the Group Cash-in-hand or Bank Account if there are entries in
that account.

o Parent of a Ledger under Purchase or Sales Account or Sundry Debtors or Creditors if

there are entries in these accounts.

o Closing Balance of a Ledger Account. But this can be altered for account under the Group
‘Stock-in-hand’.

Cost Categories and Cost Centres

Centres

It is a unit of an organization to which transactions (usually revenue) are allocated. We can have
the details of all the transactions from a Centre. The ledger account shows only the nature of a
transaction, it does not give any idea of the unit or organization involved though one may have
some idea about it from Narration. The centers are of the following two types:

Cost Centre: When only costs or expenses are allocated to these centers then they are termed as
Cost Centres.

Profit Centre: When income is also allocated to these centres, then they are termed as Profit
Centres.

Cost Categories : It allows allocation of a transaction to several sets of Cost Centres (parallel
allocation).

Note : -- The concept of Cost Centres and Cost Categories is similar to Ledgers and Groups
respectively. By default Tally maintains a Cost Category as ‘Primary’.

Vouchers In Tally

A voucher is the basic recording document. Vouchers are used for recording day-to-day
transactions.

Tally has several Pre-Defined Vouchers with different formats, for different types of
transactions.

You have the facility to even modify the existing formats as per your need. Vouchers can be
created

only in Single mode.

Pre-Defined Vouchers

Contra Voucher : This Voucher is used for fund transfer between Cash and Bank accounts only.
Like Fund transfer from one Bank / Cash account, to another Bank / Cash account cash deposits /
withdrawals into / from Bank. Follow the steps to get this voucher displayed on your desktop:
Gateway of Tally Voucher Entry Click on the F4 : Contra button on the Button Panel to have
the Contra Voucher creation screen.

Purchases

We have following three types of Vouchers for purchase.

1. Purchase Voucher : This Voucher records all entries relates to purchases. If inventory values
are affected for purchase accounts in case of Acct-with-Inventory companies, item details must
be given. Perform the following steps to have this Voucher on your desktop:

Gateway of Tally Voucher Entry Click on the F9: Purchase button on the Button. Panel to
get the Purchase Voucher creation screen. This voucher is used to place purchase orders of the

goods to the suppliers. This voucher is for outward return of rejected goods. The rejected goods
are sent back to the supplier.

Sales

For sales, we have following types of Vouchers.

1. Sales Voucher : This voucher records all entries related to sales. You need to enter the item
details if inventory value gets affected due to sales. It is very useful when sale entry is not made
through Invoice. Perform the following steps to have this Voucher on your desktop:

Gateway of TallyVoucher EntryClick on the F8 : Sales button on the Bottom panel to get
the Sales Voucher creation screen. This voucher is used for recording orders for supply of goods
or services. It is used for making customer’s Invoices. This is return inward of the sold goods by
the customers.

Payment Voucher

This voucher records all the payments made through Bank and Cash. Perform the following steps
to have Payment Voucher creation screen:

Gateway of TallyVoucher EntryClick on the F5: Payment button present on the Button Panel
to have the Payment Voucher Creation screen.

Receipt Voucher

The purpose of this voucher is to record all receipts into bank or cash accounts. Perform the
following

steps to have Receipt Voucher creation screen:

Gateway of TallyVoucher EntryClick on the F6:Receipt button on the Button Panel to have
the Receipt Voucher Creation screen.

Journal Voucher

These are for rectification / adjustment entries.

Invoke the Voucher Features screen by clicking on the F11:Features button on the Button Panel.
In the Voucher Features screen, activate the field Use Debit / Credit Notes? By typing Yes for it.

Journal Vouchers are of three types:

i. Journal

ii. Credit Note Voucher

iii. Debit Note Voucher

i. Journal : It is for adjustments between any two ledgers. No outside parties, like Debtor,
Creditor, Branches / Division are involved. Perform the following steps to have this Voucher on
your desktop:

Gateway of TallyVoucher EntryClick on F7:Journal button on Button Panel. A menu

with three options Journal, Credit Note and Debit Note, pops-up. Select Jounal option by
highlighting it and pressing the Enter key.

ii. Credit Note Voucher : This note is useful in case of return of a part of goods by the
customer due to incorrect supply or due to overcharging. Perform the following steps to have this

Voucher creation screen:

Gateway of Tally Voucher Entry Click on the F7:Journal button on the Button Panel. A
menu with three options Journal, Credit Note and Debit Note pops up. Select Credit note option
by highlighting it and pressing thee Enter key.

iii. Debit Note Voucher : This note is raised in case of Return Outward (Purchase Return) of
damaged goods to the supplier or in case of under-charging a customer.

Memo Voucher

As the name implies, it is a Non-Accounting voucher whose entries do not affect your accounts
at all.

The entries in this voucher are not posted into ledgers, instead they are stored in a separate
Memo Register. A Memo Voucher can be converted into a regular voucher, for inclusion in your
books of accounts. Perform the following steps to have this Voucher creation screen on your
desktop:

Gateway of TallyVoucher EntryClick on the F10:Memos button on the Button Panel.

The Memo Vouchers are of two types:

i. Memorandum Voucher: This type of memo Voucher can be used in many situations such
as:

a. Suspense Payments: Suppose an employee takes an advance for his traveling

expenses. Until and unless the expenses are incurred, the actual expenditure details
cannot be worked out. A Memo Voucher can be entered for advance and can be
entered for advance and can be turned to Payment Voucher after receiving the details
of the expenditure incurred.

b. Vouchers are not verified at the time of entry : At times, you may not understand the
details in a Voucher. You can enter a Memo Voucher under such conditions, which
can be amended after receiving the details.
c. Items given on approval : Memo Vouchers can be entered for items, which are
approved. This Voucher may be amended into a proper Sales Voucher depending upon
the outcome.

d. Reminder service: Memo Vouchers may be entered for future transactions, such as
Dates of Insurance Premiums, Tax due, Installment Payments, Post-Dated cheques.
Tally may be set to remind you a date before the due date of these transactions.