e Accounting and Taxation

with GST
e Accounting
• E-accounting," short for electronic
accounting, refers to the process of
using electronic technology to
perform accounting tasks.

• This includes storing financial data,

processing transactions,
performing calculations, and
generating financial reports, all
using computer software and
internet-based systems.
Key Features of e-accounting

Automation Accuracy Accessibility Integration Security

• Reduces • Minimizes • Enables access • Integrates with • Ensures data

manual data human errors to financial other business security
entry and in calculations data from systems like through
automate and data anywhere with ERP encryption
calculations recording internet (Enterprise and secure
connectivity Resource access
Planning) and protocols
CRM
(Customer
Relationship
Management)
systems.
Challenges involved in e Accounting

• Initial Setup Cost • Internet Dependency

• Security Concerns • Compliance and Regulations

• Integration Issues • Data Quality and Integrity

• Technical Support Needs • Vendor Reliability

• Cultural and Organizational

• Training and Adoption
Change
Users of e Accounting
• Corporates • Educational Institutions
• Small & Medium Enterprises • Theater and Cinemas
(SME) • Media and Broadcasting
• Financial Institutions and Bank agencies
• Telecom Companies • Social Media Service Providers
• Healthcare organizations • Government Agencies
Business
• A business is an organization or entity engaged in commercial,
industrial, or professional activities with the goal of generating profit.
• It typically involves the production and sale of goods or services to
customers, and it may operate in various sectors, such as retail,
manufacturing, or services.
• Businesses can vary in size, structure, and ownership, ranging from
sole proprietorships to large corporations.
• Key components of a business include resources, processes, and the
ability to meet customer needs while navigating market dynamics.
Profession
• A profession is a specialized field of work that requires extensive
education, training, and expertise.
• It typically involves a commitment to ethical standards and ongoing
professional development.
• Professions often have regulatory bodies or associations that oversee
qualifications and practices.
• Examples include medicine, law, engineering, and teaching, where
practitioners apply their knowledge and skills to serve clients or
society at large.
According to Section 2(13) of the Income Tax Act, 1961,
• The term “Business" includes any trade, commerce, or manufacture or
concern like trade, commerce, or manufacture.

According to Section 2(36) of the Income Tax Act, 1961,

• Profession means any vocation that requires intellectual or specialized
skills and knowledge.
What is Account
• An account is a record of all the transactions related to a particular
item or category.
• For example, if you buy a laptop for your business, you will record this
transaction in an account called “Laptop.”
• An account shows the balance or the net amount of the item or
category at any point in time.
• An account can also show the changes or movements in the balance
over a period.
Types of Accounts
• You can classify accounts into three main categories:
• Personal Accounts
• Real Accounts
• Nominal Accounts
• These categories depend on the nature and characteristics of the
items or categories they represent.
Personal Account
• A personal account is a type of
account that relates to a person or an
entity that has a legal personality.

• A person or entity with a legal

personality can engage in contracts,
possess property, initiate lawsuits,
face legal actions, and so on.
 Example

Customers Suppliers Employees Banks Shareholders Partners Government

Personal Account
• Natural persons are humans with the legal capacity to enter into
contracts and transactions. For example, Ram, Shyam, Geeta, etc.
• Artificial persons are entities created by law and have a legal
personality separate from their owners or members. The most
common examples are ABC Ltd., the State Bank of India, and the
Government of India.
• Representative persons are accounts that represent a group of
natural or artificial persons or a specific aspect of their transactions.
Some typical examples include- agents, attorneys, and executors
Real Accounts

• This type of account relates to

an asset or a property with a
physical existence or something
you can measure in terms of
money. Examples of this type of
account in accounting are:
 Example

Cash Bank Inventory Machinery Land Building Investments

• Tangible Real Account: This type of account relates to assets or properties
that have a physical existence, and you see or touch them. For example,
Cash A/c, Furniture A/c, Building A/c, Stock A/c, etc.

• Intangible Real Account: It relates to assets or properties that do not have

a physical existence but have a value based on their rights or benefits—for
example, Goodwill A/c, Patent A/c, Trademark A/c, etc.
Nominal Account

• A nominal account is a type of

account that relates to an
income, an expense, a loss, or a
gain that does not have a
physical existence but affects the
profit or loss of the business.
 Example

Wages Salary Commission Discount

Rules of Accounting
• Debit the Receiver, Credit the Giver: This rule applies to personal
accounts. When an entity receives value, it is debited; when it gives
value, it is credited.
• Debit What Comes In, Credit What Goes Out: This rule is for real
accounts (assets). When an asset is acquired, it is debited; when an
asset is disposed of, it is credited.
• Debit Expenses and Losses, Credit Income and Gains: This rule
applies to nominal accounts. Expenses and losses are debited, while
incomes and gains are credited.
 Account Type Golden Rule
Real Account •Debit what comes into the business.
•Credit what goes out from the business

Personal Account

•Debit the receiver

•Credit the giver

Nominal Account •​Debit all expenses/losses of the business.

•Credit all income and profits of the
business.
1. Business Started With Cash Rs. 50,00,000
2. Purchase of Goods worth Rs. 25000
3. Sales of Goods Rs. 30000
4. Electricity Expenses paid in cash Rs. 5000
5. Telephone Expenses paid in cash Rs. 2000
6. Commission received Rs. 200.
7. Cash received from Ravi 1200.
8. Cash paid to Amit Rs. 4200.
1. Purchase of Motor Car Rs. 750000
2. Rent received Rs. 20000
3. Insurance premium paid Rs. 20000
4. Purchase of Machinery Rs. 200000
5. Interest received in Cash Rs. 200
6. Sale incentive received in cash Rs. 500
1. Cash deposited in ICICI Bank Rs. 240000
2. Cash deposited in State Bank of India 15000.
3. Cash withdraw from ICICI Bank by ATM 5000.
4. Cash deposited in ICICI Bank by ATM 30000.
5. Cash withdraw from SBI for Office expenses Rs. 5000.
6. Cash withdraw from ICICI Bank Rs. 20000 and deposited in SBI.
7. Cash transfer from SBI to ICICI Bank Rs. 10000
8. Transfer by NEFT from ICICI Bank to HDFC Bank Rs. 4000.
1. Cash deposited in Bank Rs. 10000 and Bank Charges deducted Rs.
200
2. ATM Charges Deducted by Bank Rs. 200
3. Cheque book charges deducted by bank Rs. 20
4. Saving bank interest credited in bank Rs. 340
5. Annual charges deducted by bank Rs. 500.
1. Purchase Goods from R K Agency Rs. 20000.
2. Cash Purchase of Rs. 300000
3. Purchase goods from Vijay Sales Agency Rs. 15000.
4. Goods purchase from Abhijeet Rs. 10000
5. Paid to R K Agency by cheque Rs. 20000.
6. Payment made by NEFT to vijay sales agency Rs. 15000.
7. UPI payment made to Abhijeet Rs. 10000.
1. Cash sales of Rs. 10000.
2. Sold goods to M S Enterprises Rs. 4000.
3. Sales of goods to SP Agency Rs. 30000.
4. Cheque received from MS Enterprises 4000.
5. Amount received in ICICI Bank Rs. 30000 from SP Agency
6. Ajay Enterprises bought goods of Rs. 32000.
7. NEFT Transfer received in SBI from Ajay Enterprises Rs. 32000.
1. AC Purchase from ABC & Company
2. Purchase of Mobile phone Rs. 12000
3. Laptop purchase from Gada Electronics Rs. 45000.
4. Paid to gada electronics by NEFT Rs. 45000.
5. AC installation charges paid Rs. 1000
6. Purchase of Car Rs. 850000 from Sanghi Motors.
7. Paid to Sanghi Motors by RTGS Rs. 850000
1. Goods sold Rs. 25000 and discount allowed Rs. 1000
2. Purchase of Goods Rs. 30000 and discount received Rs. 2000
3. Sold goods to Rajeev Rs. 23000
4. Cheque received from Rajeev Rs. 22500 in full settlement.
5. Cash received from Avijeet Rs. 14000 and discount allowed Rs. 100.
1. Purchase Goods from Ravi Rs. 23000.
2. Defected goods worth rs. 10000 returned to Ravi.
3. Sold goods to Akash Rs. 20000
4. Goods return by Akash rs. 5000
5. Purchase of Goods Rs. 3000 in cash
6. Purchase return of goods Rs. 1000 in cash
1. Cash paid to Manjeet Rs. 1000 and Discount received 100.

2. Cheque issued to Rupesh Rs. 3500, discount received 200.

3. Goods distributed for sample Rs. 2000.

4. Goods expired worth Rs. 5000 at 25 July 2024.

5. Sale of scrape Rs. 4000.

Tally.ERP9
• Tally.ERP 9 is one of the most
popular business management
software used in India. It is a
complete enterprise software for
small & medium enterprises.

• Tally.ERP 9 is a perfect business

management solution and GST
software with an ideal
combination of function, control,
and in-built customisability.
• Tally is an ERP accounting software suite used for capturing a
company’s day-to-day business data.
• Tally ERP 9 software is a popular financial accounting and inventory
management system.
• It is one of the greatest accounting software programs that can be
combined with other company applications such as sales, finance,
purchasing, payroll, inventory, and so on.
• Tally software keeps detailed records of all company transactions for
each account.
• It uses a double-entry accounting method, which eliminates and
corrects potential mistakes.

• The software is one of the most widely used accounting programs in

India. It is full enterprise software for small and medium-sized
businesses.
Features of Tally ERP 9

Inventory Management –

Tally.ERP 9 can be used to manage stocks in a very flexible manner. You

can define unlimited stock groups, stock categories and arrange stock
accordingly. Get reports based on stock groups and categories to get an
overview of stock status across locations.
Features of Tally ERP 9

Easy access to business reports –

• Business owners can access Balance Sheet, and Profit and Loss
statement at any point in time in just one click before taking
important business decisions.
• Tally.ERP 9 provides reports on payment performance of parties, item
wise profitability, cash flow, fund flow and many more insightful
reports for informed decision making.
Features of Tally ERP 9

Security features in ERP Software –

• The Tally Vault password encrypts and safeguards data from
unauthorized access.
• User-level access and controls can be defined and granted by
configuring the User Management settings.
Features of Tally ERP 9

Remote Access –
• You need to access business reports or add new business transactions
remotely? Security is a typical concern when one has to access
business data from other locations.
• With Tally.ERP 9, you can take important business decisions when
necessary by accessing business data securely and making updates as
required
Features of Tally ERP 9

GST Compliance –
• Easily file GST Returns using Tally.ERP 9, complete support for GSTR-1
, GSTR-2 and GSTR-3B.
• Tally.ERP 9 is GST compliant. It is designed to handle GST transactions,
reverse charge scenarios, advances and so on.
Accounting Masters
• Accounting masters are the pre-defined masters for your accounting
information system.
• For instance, a ledger is a pre-defined master in the report, and the
groups are the pre-defined masters under which ledgers are
classified.
• Tally has several accounting masters for recording transactions.
Groups in Tally

• Groups are a collection of ledgers of the same kind that are

maintained to determine the hierarchy of ledger accounts.

• This helps in presenting reports that are meaningful and compliant

with the government and department laws. Chart of Accounts
displays all the ledgers.
Ledgers
• Ledgers are used to store bookkeeping entries and affect assets, liabilities,
income, or expenses in the Balance Sheet.

• Cash, accounts receivable, investments, and expenses are some examples of

ledgers.

• Ledgers help in maintaining all the transactions.

• Once you record a transaction with appropriate ledgers, you can view the impact
on Balance Sheet and Profit & Loss A/c. The report displays all the ledgers.
Accounts info → Ledger → Create
Inventory Masters

• The inventory masters are similar to Accounting Masters.

Inventory masters are needed to maintain the stock details
of an organization to realize the availability of stock in hand
which is part of the Balance sheet.
•
Stock Groups
• Stock Group in inventory are similar to Groups in Accounting masters.
• Stock Groups are useful to classify the Stock Items.
• The stock group classification can be made based on some common
features such as brand name, product type, quality, etc.
• Grouping helps to locate Stock Items easily and report their details in
statements.
• The stock group can have collection of stock groups (sub stock
groups) as well.
Inventory Info→ Stock Group→ Create
Unit of Measures

• Stock Items are purchased or sold on the basis of quantity. The

quantity is measured by Units.

• There are two type of UOMs, Simple and Compound.

• Simple unit is for basic requirement such as numbers, meters, kilograms, and
pieces.
• Compound units can be used with the combination of two UOMs, like 1 box
of 10 pieces [1 box = 10 pieces], to measure the stock items in two aspects
Inventory Info→ Unit of Measures → Create
Stock Items
• Stock Item refers to the goods that an organization manufacture, trade or
maintains.

• A stock item can be created by providing a Name in Tally.

• However, the inventory master UOM (Unit of Measure) is mandatory to

define the quantity.

• It is good to create the dependent masters of the stock items before

creating a stock item.
Inventory Info→ Stock Items → Create
Accounting Vouchers

• A voucher is a document that contains details of a financial

transaction and is required for recording the same into the books of
accounts.

• For every transaction, you can use the appropriate Tally voucher to
enter the details into the ledgers and update the financial position of
the company.
Payment Voucher (F5)
• Payment voucher is used to account all the payments made by the
company by way of Cash/Bank.
• The Payment Voucher in Tally.ERP 9, lets you provide all types of
details when creating it.
• While making payment to a party, you can provide details such as the
instrument number, and even print the cheque.
Receipt Voucher (F6)
• When you create a Receipt Voucher, Tally prompts you to take a look at all the
pending invoices for which payments are yet to be received.

• As and when your customer makes a payment, you can record details such as
against which invoice the payment is made; whether you received the payment
by cash, cheque or via NEFT/RTGS; and what the instrument numbers are.

• You can even email this information to your customer. This way, you will never
lose track of the payments.
Contra Voucher (F4)

• Contra Vouchers are generally used by businesses to withdraw cash

from banks or to deposit cash in banks.

• With Tally, you can also generate a cash deposit slip. Tally also
provides the denomination of notes to let you track and take a print
of the same at the time of depositing money.
Journal Voucher (F7)

• The Journal Voucher is used by businesses for multiple purposes,

based on their business types.

• Some accountants use them for purchases and sales as well. Both
accounting and inventory Journal Vouchers are available.
Purchase Voucher (F9)
• When a company buys goods on credit or cash, Purchase voucher is
used to record all the Purchase transactions of the company.
• The Purchase Voucher too can be recorded either in the Voucher or
Invoice mode based on the nature of business operations.
• Suppose you change your mind and decide to change the mode when
entering details of a purchase transaction?
• What if you have entered all the details and decide to change the
mode at the last second? TallyPrime helps you to convert a voucher
into an invoice, or vice versa, without expecting you to re-enter the
details. It auto-adjusts to your preference. Just use the Toggle button.
Sales Voucher (F8)
• Every business involves sales of goods or services. The sales
transactions in your business may be a simple cash sales, or even
sales on credit.
• For each sales transaction, you will need to keep a record of the items
that you sold, the payment that you received, goods returned, and so
on. The
• invoice also serves as a proof of the purchase made by the buyer.
Using Tally.ERP 9, you can do all of these and more.
• Moreover, you can view reports any time you need to understand the
sales performance of your business.
Enter the transactions in Receipt Voucher
1. Business Started by Sumit with Rs. 10,00,000.
2. Capital Invested by Amit Rs. 5,00,000
3. Commission received in Cash Rs. 870.
4. Interest Received in Cash Rs. 400.
5. Deposit received from Arjun Rs. 10000
6. Prize money received in Cash 1100/-
7. Office Rent Received Rs. 15000/-
8. Sales incentives received Rs. 23000/-
9. Commission received Rs. 5000/-
10. Prize money received Rs. 1200/-
Enter the transactions in Payment Voucher
1. Telephone Expenses paid Rs. 750/-
2. Electricity Charges paid Rs. 2000/-
3. Courier and Postage Charges paid Rs. 300/-
4. Insurance premium paid Rs. 5500/-
5. Broker commission paid Rs. 2800/-
6. Computer repairing charges paid Rs. 800/-
7. Office Inauguration Expenses paid Rs. 24000/-
Enter the transactions in Payment Voucher
1. Electrical Fixtures purchase Rs. 10000/-
2. Salary paid Rs. 8700/- 10. Mobile bill paid Rs. 500/-
3. Petrol expenses paid Rs. 1200/-
4. Furniture repairing charges paid Rs. 800/-
5. Freight outward paid Rs. 200/-
6. Air Conditioner servicing charges paid Rs. 2000/-
7. Garden maintenance charges paid Rs. 5000/