TALLY INTRODUCTION

In the accounting world, it is software that manages business finances. It offers a fast and
effective way to manage complex accounting processes. Using the customized software, you
can increase efficiency in your business operations. The management of finance and
accounting is one of the most common challenges companies are facing today.

Business accounting is an integral part of business strategy, so it often requires customization

to match that strategy. With this software, you will find solutions to all your accounting
needs. There are a number of accounting issues that this software addresses.

As an accountant, you will likely face challenges like cash flow management, taxes
management, managing payroll, bookkeeping, managing finances, and performance
evaluation. The Tally program package enables users to calculate monetary quantities,
accountancy, tax, and GST (Goods and Services Tax) amounts, as well as manage
commercial transactions effectively and efficiently.

The data you store in Tally can be accessed as needed and managed in an efficient way at any
time. It provides you with convenient access to all of your data. With the help of technology,
Tally is able to make data safe and reliable. It is able to send and receive files in all the major
protocols.

This means that files can easily be shared between the offices. This accounting software is
capable of handling financial management and analysis. As a result, we can get information
about receivables turnovers, cash flow statements, activity consolidations, and even branch
accounting.

Tally is a complete system for business accounting and inventory management. It provides
various facilities like Govt. supported formats, multilingual operations, online functions and
processing for small, medium and big businesses. The present version of Tally has many
advanced features like better data migrating, payroll management, TDS, TCS, job costing and
point- of sale invoicing etc.

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HISTORY AND VRSIONS OF TALLY

History of tally

Shyam Sunder Goenka was an Indian entrepreneur. He founded and served as Executive
Chairman of Tally Solutions, one of India’s first software companies. Before that, he owned a
company that supplied raw materials and machine parts to plants and textile mills in India.

He was unable to locate software that could manage his financial records, so he asked his
math-educated son, Bharat Goenka, to design a software application that would handle his
business’ financial records. Being a graduate of mathematics, Bharat Goenka had an intuitive
understanding of developing accounting software.

In 1984, he received an IBM PC from his father, which changed the entire course of his life.
Mr. Bharat Goenka has developed a software program with no codes. Initially, the accounting
software was offered as an MS-DOS application. The application had only basic accounting
functions and was called ‘Peutronics Financial Accountant’.

Together with his father, he went on to founding Peutronics in 1986, which was later
renamed Tally in 1988. Today, Bharat Goenka is the Managing Director of Tally Solutions, a
company that specializes in technology and innovation that is providing a business tool to
small and medium-sized businesses across the globe. According to the company, its business
accounting software is used by more than 1.8 million clients.

Versions of tally

Tally Software has gone through many transformations over the years, resulting in different
versions. This is a brief overview of how Tally has evolved over the years from early
versions to the present day.

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Tally 3.0: Initially released in 1990, this software program was a basic accounting tool that
could satisfy the needs of small companies. This version of the software required a few basic
predefined operating commands in order to function. Only the Microsoft Disk Operating
System (MS-DOS) was used for this application.

Tally 3.12: The 1991 version developed some accounting features but remained pretty much
similar to its predecessor. Only a few features were updated.

Tally 4: The Tally4 version was released in 1992. It also supported DOS-based accounting.
There are minor differences between this version and those of the other two versions.

Tally 4.5: Released in 1994 this version has its focuses on accounting functions such as
Ledger Classification and Voucher Entry. It provided simple financial statements and a
thorough examination of debtors and creditors of the business.

Tally 5: It is an upgraded version of the Tally application released in 1996 and the first one to
run on the Windows operating system. With this upgrade, you were able to manage detailed
inventory, structure invoices, and integrate accounting and inventory records.

Tally 5.4: It was released in the same year as an upgraded version of the 5.0 application. This
Tally program had the capability of importing data, so that older data formats could be
converted into the current format. In addition, the system was a graphic interface version.

Tally 6.3: This Tally version was released in 2001, and it was developed as an extension of
enterprise systems. The Open Database Connection (ODBC) in this version makes it possible
to communicate with other systems.

Tally 7.2: Released in 2005 with new features, this type was much faster than the previous
ones, with operations completed more quickly. Additional characteristics like statutory
compliance features and different VAT values made it stand out from the other versions. In
addition, there are several types of taxes included like Value Added Tax (VAT), Central
Sales Tax (CST), Tax Deduction at Source (TDS), Tax Collection at Source (TCS), and
Service Tax.

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Tally 8.1: In version 8.1 which was developed in 2006, Tally has a new data structure. It
includes a module for Point of Sale (POS) and Payroll. This model has multi-language
capabilities and supports10 languages.

Tally 9: An upgrade to the Tally 8.1 version launched the same year, this type includes
features that are related to accounting and inventory management. There are 13 languages
supported by this version.

Tally ERP 9: Tally ERP9 (Enterprise Resource Planning) was released in 2009. This
software offers advanced features such as GST (Goods and Services Tax) calculations,
payroll and invoice processing, remote access, multi-user logins, as well as transaction
processing. ERP 9 provides better security for the business and makes it more efficient. It
allows easy access to data through web browsers and mobile devices. In addition, it simplifies
GST returns filing.

Tally Prime: Tally Prime replaced Tally ERP 9 in 2020. Compared to its predecessor, Tally
Prime is faster and much more advanced. There are more advanced features included in it that
make it easier for you to improve different accounting operations, leading to a greater level of
productivity. By using Tally Prime you can access data maintained by your own accountant
or an outsourced accountant. The financial statements and reports are generated securely
without requiring the assistance of a third party. Using the web browser, you can view
multiple reports, including Profit & Loss, Cash/Bank Book, Sales/Purchase Register, and
Stock Summary.

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CORE FEATURES OF TALLY

These are some of the key ERP Software features you as a business owner should look for in
any ERP software.

1. Accounting management in Tally.ERP 9 software

 With Tally.ERP 9, a business owner can easily create and track sales vouchers; and
get detailed reports on a daily, weekly, monthly or yearly sales basis
 Business owners can easily create purchase vouchers and view supplier-wise purchase
details
 Order processing and tracking can be easily done using Tally’s ERP software
 Businesses get full support and functionality to create journal, payment, receipt and
contra vouchers

2. Banking transactions support in Tally.ERP 9 software

 Business owners can manage cheques easily with Tally.ERP9. You can generate
cash/cheque deposit slips and track them.
 You will find it very handy to use Tally.ERP 9 for reconciling business transactions
directly with bank statements. Just upload the soft copy of the statement into the
software. Within a few seconds, you will get the list of reconciled transactions based
on reference numbers.
 Tally.ERP 9 supports transactions made in the form of e-Payments with multiple
banks.

3. 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.
 Based on the business need, you can create multiple godowns and track stock
godown-wise. Create multiple price lists for your business to manage different types

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 of customers. Manage stocks with batches and access stock summary reports to view
the stock position.

4. GST compliance in Tally.ERP 9 software

 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.
 With regard to GSTR-2, business owners and GSTPs can generate the form in JSON
directly and file the return. Buying dealers can add missing purchase invoices, and
purchases made as imports and reverse chargeable services to claim their Input Tax
Credit.
 Business owners and GSTPs can send reports of mismatching or missing invoices to
suppliers so that they take quick action to reconcile the lapses
 A salient feature of the latest Tally Release is that it marks vouchers in which changes
are made during the invoice matching process. The list of changed vouchers can be
used update the books without worrying about overwriting of data or appended
transactions getting erased.

5. 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.

6. Budgets and controls

 Budgets and Controls is one of the differentiating features in ERP software.

Businesses typically allocate budget to different departments or cost centres and
prefer to track the various expenses occurring in each unit. With Tally.ERP 9,
businesses can define the budget for cost centres and track expenses against the
budgets.

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  Businesses can set the credit limit for parties, and before passing transactions
Tally.ERP 9 warns the user if the particular transaction is crossing the defined limits.

7. Manage unlimited companies and group companies

 Tally.ERP 9 provides flexibility to manage data of multiple businesses operated

within the same license. Users can see consolidated reports by creating Group
Company in the ERP software.
 One of the key Tally’s ERP Software feature is that user can see financial status of his
Group Company and even compare financial reports between two quarters.

8. 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.

9. ERP Software functionality – 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

10. Synchronization of data from two or more places

Tally’s ERP software feature of synchronization helps in managing centrally located data
from two or more places of business. You can define and set the rules. Data gets
synchronized even when new voucher data is entered.

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BENEFITS OF TALLY

The following are some of the benefits of Tally ERP 9.

1. Multi-Lingual Support
The availability of multi-lingual support is one of Tally ERP 9’s significant advantages. This
feature is particularly useful for businesses that operate across several countries or regions
and have multi-lingual employees. It helps eliminate language barriers and improves
communication and collaboration by utilizing multi-lingual help.

2. Remote Access and Collaboration

Tally ERP 9 offers internet collaboration and access features that let businesses use the
program whenever and wherever they choose. Companies with multiple sites or distant
workers find this feature particularly useful. Employers can save time and increase
productivity by allowing employees to work remotely through internet access. It is also easier
to collaborate and share information, which allows numerous users to work on the same
project at once.

3. Scalability and Flexibility

Tally ERP 9 is adaptable and versatile, making it suitable for companies of all kinds. The
software can manage large quantities of data and can be modified to suit the particular
requirements of each company. Additionally, it can be linked with other software and
applications, making it simpler to manage various aspects of the company. With its scope and
versatility, Tally ERP 9 can expand and change with the company, guaranteeing that it can
satisfy the altering requirements of the business.

4. Security and Data Backup

The advanced security features and data storing powers included in Tally ERP 9 ensure that
businesses can protect their sensitive data and prevent data loss. The program can assist
businesses in protecting their data from unauthorized entry or loss. It offers individual access
controls, data protection, and other security features. Additionally, it has a data backup
feature that enables businesses to regularly store their data, guaranteeing that they can recover
it in the event of data loss.

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LIMITATIONS OF TALLY

Given below are some of the disadvantages of Tally.

1. Limited Involvement
Tally’s limited interaction with other software programs is one of its primary drawbacks.
Although it does provide a few link options, companies might find it challenging to connect it
to other essential software programs like customer relationship management (CRM)
or enterprise resource planning (ERP) programs.

2. Lack of Advanced Features

Since Tally is predominantly designed for bookkeeping and financial administration, it might
not provide the advanced features that businesses need in other areas like marketing, sales, or
human resources. Companies may be constrained to use additional software to comply with
this restriction.

3. Strong Learning Curve

Tally does have a sharp learning curve, but once users get familiar with the UI, it is easy to
use. This implies that businesses may need to invest time and resources in training staff
members to use the software effectively.

4. Compatibility Issue
Tally has compatibility issues with some running systems, which may limit the software’s
applicability for some businesses. For instance, businesses that use Apple products might
need to use simulation software to run Tally, which can be difficult and time-consuming.

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IMPORTANCE OF TALLY

Tally is very easy to work on it, it has been designed in very elaborative manner. Tally is
very easy yet effective software to meet daily financial activities and it’s working made
easy and compressive to work on it.

• You can get whatever you want: Tally is used in POS Software especially designed to
meet daily financial transactions and it’s calculations. With the help of tally you can drill
out each and every solution of your problem to it’s depth and up to the satisfaction.

• Multipurpose uses: Tally can be used in many tasks it is applicable in all fields regarding
inventory and monetary. It can be used as payroll, can be used for taking attendance, record
of the employees , work group, workers categories, pay heads and of course employees
records.

• Powerful tool for Accounting and Finance: Tally can be used for various purpose and it
can be used in any field regarding Accounting and software. Tally is powerful tool and can
be used in financial analysis and Accounting management.

• Banking: Tally is equally being considered important in banking solutions also. With the
help of tally one can easily create deposit slip, print cheques, maintain cheque register and
many more things. Overall Tally has made work quite easier and comfortable and it is very
easy to use. However the most tedious task in any organisation is to create bank
reconcilement. Tally can help you out of these , with the help of tally you can create bank
reconciliation statement easily and with ease and it is quite comfortable to use.

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ACCOUNTING

Accounting is the process of recording financial transactions pertaining to a business. The

accounting process includes summarizing, analyzing, and reporting these transactions to
oversight agencies, regulators, and tax collection entities. The financial statements used in
accounting are a concise summary of financial transactions over an accounting period,
summarizing a company's operations, financial position, and cash flows.

Here are some types of accounting:

• Financial accounting refers to the processes used to generate interim and annual financial
statements. The results of all financial transactions that occur during an accounting period
are summarized in the balance sheet, income statement, and cash flow statement. The
financial statements of most companies are audited annually by an external CPA firm.For
some, such as publicly-traded companies, audits are a legal requirement.6 However, lenders
also typically require the results of an external audit annually as part of their debt covenants.
Therefore, most companies will have annual audits for one reason or another.

• Managerial accounting uses much of the same data as financial accounting, but it
organizes and utilizes information in different ways. Namely, in managerial accounting, an
accountant generates monthly or quarterly reports that a business's management team can
use to make decisions about how the business operates. Managerial accounting also
encompasses many other facets of accounting, including budgeting, forecasting, and various
financial analysis tools. Essentially, any information that may be useful to management falls
underneath this umbrella.

• Cost Accounting just as managerial accounting helps businesses make decisions about
management, cost accounting helps businesses make decisions about costing. Essentially,
cost accounting considers all of the costs related to producing a product. Analysts, managers,
business owners, and accountants use this information to determine what their products
should cost. In cost accounting, money is cast as an economic factor in production, whereas
in financial accounting, money is considered to be a measure of a company's economic
performance.

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 • Tax Accounting while financial accountants often use one set of rules to report the
financial position of a company, tax accountants often use a different set of rules. These
rules are set at the federal, state, or local level based on what return is being filed. Tax
accounts balance compliance with reporting rules while also attempting to minimize a
company's tax liability through thoughtful strategic decision-making. A tax accountant often
oversees the entire tax process of a company: the strategic creation of the organization chart,
the operations, the compliance, the reporting, and the remittance of tax liability.

TYPES OF ACCOUNTS

1) Personal Account
 Personal Representative Account
 Personal Artificial Account
 Personal Natural Account
2) Real Account
 Real Intangible Account
 Real Tangible Account
3) Nominal Account
I. Personal Account

As previously said, personal accounts are accounts that are associated with an individual, a
company, a firm, or a collection of associations, among other things. These people could be
natural people, artificial people, or representatives, depending on the situation. Eg. Charitable
trusts, ABC Bank Ltd, X company Ltd., etc. Company Ltd., etc.

Rules for This Account

 The Receiver is debited

 The Giver is credited.

II. Real Account

Accounts that deal with assets, properties, or possessions are known as real accounts. These
properties could be physical or non-physical in nature. This necessitates the development of
two different sorts of genuine accounts: Intangible Real Accounts and Tangible Real Account

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 Rules for this Account
 What comes in is to be debited
 What goes out is to be credited.

III. Nominal Account

Nominal accounts are those that are associated with any type of revenue or spending, gain or
loss. For instance, rent a/c, salary a/c, wage a/c, and so on.

Rules for this Account

 Expenses and losses related to the business must be debited in full.
 All forms of business income and gains, if any, must be credited.

Example

When a salary is paid to employees of a company organization, the salary A/c is debited, as
well as when any other expenses are incurred. On the other hand, any discounts, interest, or
other benefits obtained by the business entity are recognized as soon as they are received.

There are some more types of Accounts which are as follows:

IV. Cash Account

This type of account keeps a record of all cash, deposit, and withdrawal transactions.

V. Income Account

This type of account is used to keep track of all types of business income sources.

VI. Expense Account

This type of account keeps track of all of the company’s expenses.

ACCOUNTING CONCEPTS AND CONVENTIONS

Accounting concepts

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Following are the different accounting concepts that are widely used all around the world and
hence are termed as universally accepted accounting rules. The different accounting concepts
are:

1. Business Entity Concept

This concept assumes that the organization and business owners are two independent entities.
Hence, the business translation and personal transaction of its owner are different. For
example, when the business owner invests his money in the business, it is recorded as a
liability of the business to the owner. Similarly, when the owner takes away from the
business cash/goods for his/her personal use, it is not treated as a business expense. Thus, the
accounting transactions are recorded in the books of accounts from the organization's point of
view and not the person owning the business.
Example:

Suppose Mr. Birla started a business. He invested Rs 1, 00, 000. He purchased goods for Rs
50,000, furniture for Rs. 40,000, and plant and machinery for Rs. 10,000 and Rs 2000
remained in hand. These are the assets of the business and not of the business owner.
According to the business entity concept, Rs.1,00,000 will be assumed by a business as
capital i.e. a liability of the business towards the owner of the business.

Now suppose, he takes away Rs. 5000 cash or goods for the same worth for his domestic
purposes. This withdrawal of cash/goods by the owner from the business is his private
expense and not the business expense. It is termed as Drawings.

Therefore, the business entity concept states that the business and the business owner are two
separate/distinct persons. Accordingly, any expenses incurred by the owner for himself or his
family from business will be considered as expenses and it will be represented as drawings.

2. Accrual Concept

The term accrual means something is due, especially an amount of money that is yet to be
paid or received at the end of the accounting period. It implies that revenue is realized at the
time of sale through cash or not whereas expenses are recognized when they become payable

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whether cash is paid or not. Therefore, both the transactions are recorded in the accounting
period in which they relate.
In the accounting system, the accrual concept tells that the business revenue is realized at the
time goods and services are sold irrespective of the fact when cash is received for the same.
For example, On March 5, 2021, the firm sold goods for Rs 55000, and the payment was not
received until April 5, 2021, the amount was due and payable to the firm on the date goods
and services were sold i.e. March 5, 2021. It must be included in the revenue for the year
ending March 31, 2021.
Similarly, expenses are recognized at the time services are provided, irrespective of the fact
that cash paid for these services are made. For example, if the firm received goods costing
Rs.20000 on March 9, 2021, but the payment is made on April 7, 2021, the accrual concept
requires that expenses must be recorded for the year ending March 31, 2021, although no
payment has been made until this date though the service has been received and the person to
whom the payment should have been made is represented as a creditor of business firm.
In brief, the accrual concept states that revenue is recognized when realized and expenses are
recognized when they become due and payable irrespective of the cash receipt or cash
payment.

3. Accounting Cost Concept

The accounting cost concept states all the business assets should be written down in the book
of accounts at the price assets are purchased, including the cost of acquisition, and
installation. The assets are not recorded at their market price. It implies that the fixed assets
like plant and machinery, building, furniture, etc are recorded at their purchase price. For
example, a machine was purchased by ABC Limited for Rs.10,00,000, for manufacturing
bottles. An amount of Rs.2,000 was spent on transporting the machine to the factory site.
Also, Rs.2000 was additionally spent on its installation. Hence, the total amount at which the
machine will be recorded in the books of accounts would be the total of all these items i.e.
Rs.10, 040, 00. This cost is also termed as historical cost.
4. Dual Aspect
The dual aspect is the basic principle of accounting. It provides the basis for recording
business transactions in the books of accounts. This concept assumes that every transaction
recorded in the books of accountants is based on dual concepts. This implies that the
transaction that is recorded affects two accounts on their respective opposite sides. Hence, the

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transaction should be recorded at dual places. It implies that both aspects of the transaction
should be recorded in the books of account. For example, goods purchased in exchange for
cash have two aspects such as paying cash and receiving goods. Therefore, both the aspects
should be registered in the books of accounts. The duality of the transaction is commonly
expressed in the terms of the following equation given below:

Assets = Liabilities + Capital

The dual concept implies that every transaction has a similar effect on assets and liabilities in
such a way that the value of total assets is always equal to the value of total liabilities.

5. Going Concepts

The Going concept in accounting states that a business activities will be carried by any firm
for an unlimited duration This simply means that every business has continuity of life. Hence,
it will not be dissolved shortly. This is an important assumption of accounting as it provides a
base for representing the asset value in the balance sheet.

For example, the plant and machinery was purchased by a company of Rs. 10 lakhs and its
life span is 10 years. According to the Going concept, every year some amount of assets
purchased by the business will be represented as an expense and the balance amount will be
shown as an asset in the books of accounts. Thus, if an amount is incurred on an item that
will be used in business for several years ahead, it will not be proper to charge the amount
from the revenues of that particular year in which the item was purchased Only a part of the
purchase value is shown as an expense in the year of purchase and the remaining balance is
shown as an asset in the balance sheet.

6. Money Measurement Concept

The money measurement concept assumes that the business transactions are made in terms of
money i.e. in the currency of a country. In India, such transactions are made in terms of the
rupee. Hence, as per the money measurement concept, transactions that can be expressed in

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terms of money should be recorded in books of accounts. For example, the sale of goods
worth Rs. 10000, purchase of raw material Rs. 5000, rent paid Rs.2000 are expressed in terms
of money, hence these transactions can be recorded in the books of accounts.

7. Accounting Period Concepts

Accounting period concepts state that all the transactions recorded in the books of account
should be based on the assumption that profit on these transactions is to be ascertained for a
specific period. Hence this concept says that the balance sheet and profit and loss account of
a business should be prepared at regular intervals. This is important for different purposes
like calculation of profit and loss, tax calculation, ascertaining financial position, etc. Also,
this concept assumes that business indefinite life is divided into two parts. These parts are
termed accounting periods. It can be one month, three months, six months, etc. Usually, one
year is considered as one accounting period which may be a calendar year or financial year.

The year that begins on January 1 and ends on January 31 is termed as calendar year whereas
the year that begins on April 1 and ends on March 31 is termed as financial year.

8. Realization Concept

The term realization concept states that revenue earned from any business transaction should
be included in the accounting records only when it is realized. The term realization implies
the creation of a legal right to receive money. Hence, it should be noted that selling goods is
considered as realization whereas receiving order is not considered as realization.

In other words, the revenue concept states that revenue is realized when cash is received or
the right to receive cash on the sale of goods or services or both have been created.

9. Matching Concepts

The Matching concept states that revenue and expenses incurred to earn the revenue must
belong to the same accounting period. Hence, once revenue is realized, the next step is to

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assign the relevant accounting period. For example, if you pay a commission to a salesperson
for the sale that you record in March. The commission should also be recorded in the same
month.

The matching concept implies that all the revenue earned during an accounting year whether
received or not during that year or all the expenses incurred whether paid or not during that
year should be considered while determining the profit and loss of the business for that year.
This enables the investors or shareholders to know the exact profit and loss of the business.

Accounting conventions

Four important types of accounting conventions are:

 Conservatism: It tells the accountants to err on the side of caution when providing
the estimates for the assets and liabilities, which means that when there are two values
of a transaction available, then the always lower one should be referred to.
 Consistency: A company is forced to apply the similar accounting principles across
the different accounting cycles. Once this chooses a method it is urged to stick with it
in the future also, unless it finds a good reason to perform it in another way. In the
absence of these accounting conventions, the ability of investors to compare and
assess how the company performs becomes more challenging.
 Full Disclosure: Information that is considered potentially significant and relevant is
to be completely disclosed, regardless of whether it is detrimental to the company.
 Materiality: Similar to full disclosure, this convention also bound organizations to
put down their cards on the table, meaning they need to totally disclose all the
material facts about the company. The aim behind this materiality convention is that
any information that could influence the person’s decision by considering the
financial statement must be included.

Accounting Principles

Accounting principles are a set of guidelines and rules issued by accounting standards like
GAAP and IFRS for the companies to follow while presenting or recording financial
transactions in the books of account. This enables companies to present a true and fair view
of the financial statements.

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Here is the list of the top 6 accounting principles that companies follow quite often:
1. Accrual Principle
2. Consistency Principle
3. Conservatism Principle
4. Going Concern Principle
5. Matching Principle
6. Full Disclosure Principle

QUESTION

Following transactions of Rosemerry Pvt. Ltd. Are given below:

DATE PARTICULARS AMOUNT

(APRIL)

01 Rosemerry commenced business with cash 5000000

02 Cash deposited into HDFC bank 200000

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 03 Purchased a refrigerator 300000

04 Rent paid 18000

12 Goods purchased : 51500

s.no. Items purchased Price(per unit) Qty.

01 Pines olive oil 500 ml 450 50

02 Nivea body wash 350 ml 300 35

03 Lotus body wash 400 ml 250 30

04 Starky nail laquer 10 ml 80 100

05 Santoor hand soap 200 15

14 goods sold to Mr. Farhaan on credit 63000

s.no. Items sold Price(per unit) Qty.

01 Vatika olive oil 500 ml 500 20

02 Doli nail laquer 10 ml 120 150

03 Wow body wash 800 ml 700 50

20 Withdrew cash from bank 35000

25 Payment made by Mr. Farhaan

28 Drawings made 45000

28 Fan purchased 56000

29 Sales of old newspaper 1000

SOLUTION

Here are the journal entries of the question:

DATE PARTICULARS DEBIT CREDIT

(APRIL)

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01 Cash a/c 5000000 5000000
To capital a/c
(being cash introduced to commence business)
02 HDFC a/c 200000 200000
To cash a/c
(being cash deposited into bank)
03 Refrigerator a/c 300000 300000
To cash a/c
(being purchased a refrigerator)
04 Rent a/c 18000 18000
To cash a/c
(being rent paid)
12 Purchases a/c 51500 51500
To cash a/c
(being goods purchased)
14 Mr. Farhaan a/c 63000 63000
To sales a/c
(being goods sold on credit)
20 Cash a/c 35000 35000
To HDFC a/c
(being cash withdrawn from bank)
25 Cash a/c 63000 63000
To Mr. Farhaan a/c
(being payment made for goods sold)
28 Drawings a/c 45000 45000
To cash a/c
(being drawings made)
28 Fan a/c 56000 56000
To cash a/c
(being fan purchased)
29 sale of old newspaper a/c 1000 1000
to cash a/c
(being received indirect income)

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FIRST SCREEN

Tally ERP Icon

Please double click on Tally ERP9 Icon or select and press enter on Tally ERP9 Icon to start
the Tally ERP9 programme.

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GATEWAY OF TALLY

At this screen it can be seen as to which company is open, period of operation, current date
and the date of last entry.

COMPANY INFORMATION

CREATE COMPANY

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SELECT COMPANY

CHOOSE COMPANY

ALTER/CREATE NEW COMPANY

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SHUT COMPANY

CHANGE IN ACCOUNTING PERIOD

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ACCOUNTING INFORMATION

CRREATION OF LEDGER

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For creating a ledger follow these steps:

 Go to Accounting info
 Click on ledgers
 Under single ledger click on create.

Capital account

Capital ledger will come under the group Capital Account

Cash account

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This ledger is already present in tally by default

Drawings account

This ledger comes under the group capital account

Fan account

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This ledger comes under the group fixed assets

HDFC Bank account

This ledger comes under the group bank account

Mr. Farhaan acoount

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This ledger comes under sundry debtors

Old newspaper account

This ledger comes under the group indirect income

Purchase account

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This ledger comes under the group purchases account

Refrigerator account

This ledger comes under the group fixed assets

Rent account

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This ledger comes under the group indirect expenses

Sales account

This ledger comes under the group sales account

DISPLAY OF LEDGERS

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MAKING ACCOUNTING ENTRIES

To make entries these are the following steps:

 Go to accounting vouchers
 Then click on the desired voucher – payment,receipt,contra,journal,purchases,sales
 Then do the entry and click yes

CONTRA ENTRY

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In Tally ERP 9, a contra voucher is a type of accounting voucher used to record transactions
that involve both cash and bank accounts. The term "contra" means "opposite," and this type
of voucher is used to record transactions that involve the transfer of funds from one bank
account to another or from a bank account to cash or vice versa.

To view the Contra Voucher Entry Screen,

● Go to Gateway of Tally > Accounting Vouchers

● Select F4: Contra from the Button Bar or press F4 .

PAYMENT VOUCHER

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Payment voucher is used to account all the payments made by the company by way of
Cash/Bank.

Payment voucher can be passed using Single Entry or Double Entry mode by configuring
the setting Use Single Entry mode for Pymt/Rcpt/Contra in F12 configuration .

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RECEIPT VOUCHER

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In Tally ERP 9, a receipt voucher is a type of accounting voucher used to record money
received from customers. Receipt vouchers are used to keep track of all income received by a
business, such as payments received for goods or services sold.

 Go to Gateway of Tally and click on the "Accounting Vouchers" option.

 Select the "Receipt Voucher" option.

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PURCHASE VOUCHER

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 While recording a purchase transaction, if you want to allocate cost centers, then record
the transaction in voucher mode else enter the transaction in item invoice mode.

1. Go to Gateway of Tally > Accounting Vouchers .

2. In the Voucher Creation screen select F9: Purchase .

3. Select As Invoice .

4. Enter the current date and reference.

5. Select the Party to be credited from the List of Ledger Accounts in Party’s A/c name .

6. Select the required Purchase Ledger from the List of Ledger Accounts .

7. Select an item from the Stock Items List of Items. On selecting the Item, an Item
Allocations sub screen for the selected Item is displayed

8. Select the Godown and specify the quantity to be allocated under the Quantity field.

9. Enter the Quantity and Rate , and the amount is automatically displayed in
the Amount field.

10. Select another Godown and follow the similar procedure for Item allocation.

11. Enter Narration if required and accept to save

SALES VOUCHER

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 1. Go to Gateway of Tally > Accounts Info. or Inventory Info. > Voucher
Type > Create .

2. Enter the Name of the voucher.

3. Select the type of voucher as Sales .

ACCOUNTS WITH INVENTORY

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STOCK GROUP CREATION

Stock Groups in Inventory are similar to Groups in Accounting Masters. They are helpful in
the classification of Stock Items. You can group Stock Items under different Stock Groups to
reflect their classification based on some common features such as brand name, product type,
quality, and so on. Grouping enables you to locate Stock Items easily and report their details
in statements.

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STOCK ITEM

Stock Item refers to goods that you manufacture or trade. It is the primary inventory entity
and is the lowest level of information on your inventory. You have to create a Stock Item in
Tally.ERP 9 for each inventory item that you want to account for.

UNIT OF MEASURE

Stock Items are mainly purchased and sold on the basis of quantity. The quantity in turn is
measured by units. In such cases, it is necessary to create the Unit of Measure. The Units of
Measure can either be simple or compound. Examples of simple units are: nos., metres,
kilograms, pieces etc.

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TRIAL BALANCE

A trial balance is a report that lists the balances of all general ledger accounts of a company at
a certain point in time. The accounts reflected on a trial balance are related to all
major accounting items, including assets, liabilities, equity, revenues, expenses, gains, and
losses. It is primarily used to identify the balance of debits and credits entries from the
transactions recorded in the general ledger at a certain point in time

PROFIT AND LOSS A/C

Profit and loss (P&L) statement refers to a financial statement that summarizes the revenues,
costs, and expenses incurred during a specified period, usually a quarter or fiscal year. These
records provide information about a company’s ability or inability to generate profit by
increasing revenue, reducing costs, or both. P&L statements are often presented on a cash or
accrual basis. Company managers and investors use P&L statements to analyze the financial
health of a company.

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BALANCE SHEET

The term balance sheet refers to a financial statement that reports a company's assets,
liabilities, and shareholder equity at a specific point in time. Balance sheets provide the basis
for computing rates of return for investors and evaluating a company's capital structure.

In short, the balance sheet is a financial statement that provides a snapshot of what a
company owns and owes, as well as the amount invested by shareholders. Balance sheets
can be used with other important financial statements to conduct fundamental analysis or
calculate financial ratios.

RATIO ANALYSIS

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 SHUT CUT KEYS OF TALLY

 F1 – To select a company (At all master’s menu screen)

 F1 – To select the Accounts Button (At the Accounting Voucher creation and Alteration
screen)

 ALT+F1 – To select the Inventory (At the Inventory/Payroll Voucher creation and alteration
screen)

 CTRL + F1 – To open Payroll Vouchers to alter (At the Accounting/Inventory voucher

creation or alteration screen)

 F2 – To change the current date (At almost all screens in Tally. ERP 9)

 F3 – To select the company (At almost all screens in Tally. ERP 9)

 F4 – To open Contra voucher (At Accounting / Inventory Voucher creation and alteration
screen)

 F5 – To open Payment voucher (At Accounting / Inventory Voucher creation and alteration
screen)

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 F6 – To open Receipt voucher (At Accounting / Inventory Voucher creation and alteration
screen)

 F7 – To open Journal voucher (At Accounting / Inventory Voucher creation and alteration
screen)

 F8 – To open Sales voucher (At Accounting / Inventory Voucher creation and alteration
screen)

 CTRL+F8 – To open Credit Note voucher (At Accounting / Inventory Voucher creation and
alteration screen)

 F9 – To open Purchase voucher (At Accounting / Inventory Voucher creation and alteration
screen)

 CTRL+F9 – To open a Debit Note voucher (At Accounting / Inventory Voucher creation and
alteration screen)

 F10 – To open Reversing Journal voucher (At Accounting / Inventory Voucher creation and
alteration screen)

 Ctrl + F10 – To open Memorandum voucher (At Accounting / Inventory / Payroll Voucher
creation and alteration screen)

 F11 – To select the Functions and Features screen (At almost all screens in Tally. ERP 9)

 F12 – To open the configuration screen (At almost all screens in Tally. ERP 9).

 ALT + 2 – To Duplicate a voucher (Creates a voucher similar to the one where you
positioned the cursor and used this key combination)

 ALT + A – To Add a voucher (At the List of Vouchers, this shortcut key adds a voucher after
the one where you positioned the cursor and used this key combination)

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 ALT + C – To create a master at a voucher screen (At voucher entry and alteration screens, at
a field where you have to select a master from a list. If the necessary account has not been
created already, use this key combination to create the master without quitting from the
voucher screen.)

 ALT + C – To access Auto Value Calculator in the amount field during voucher entry (At all
voucher entry screens in the Amount field)

 ALT + D – To delete a voucher (At Voucher and Master (Single) alteration screens. Masters
can be deleted subject to conditions, as explained in the manual)

 ALT + D – To delete a master (All the reports screen which can be viewed in columnar
format)

 ALT + D – To delete a column in any columnar report

 ALT + E – To export the report in ASCII, Excel, HTML OR XML format (At all reports
screens in Tally. ERP 9)

 ALT + I – To insert a voucher (At List of Vouchers – inserts a voucher before the one where
you positioned the cursor and used this key combination)

 ALT + I – To insert a voucher (During the creation of sales and purchase invoice)

 ALT + I – To toggle between Item and Accounting invoice

 ALT + G – To select the Language Configuration (At almost all screens in Tally. ERP 9)

 ALT + K – To select the Keyboard Configuration (At almost all screens in Tally. ERP 9)

 ALT + O – To upload the report at your website (At all reports screens in Tally. ERP 9)

 ALT + G – To select a language for Tally. ERP 9 Interface (At almost all screens of Tally.
ERP 9)

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 ALT + M – To Email the report (At all reports screens in Tally. ERP 9)

 ALT + N – To view the report in automatic columns (At all the reports where columns can be
added)

 ALT + P – To print the report (At all reports screens in Tally. ERP 9)

 ALT + R – To repeat the narration in different voucher type (At all Vouchers in Tally. ERP
9)

 ALT + S – To bring back a line you removed using ALT + R (At all reports screens in Tally.
ERP 9)

 ALT + U – To retrieve the last line which is deleted using Alt + R (At all reports screens in
Tally. ERP 9)

 ALT+ V – From Invoice screen to bring Stock Journal screen (At Invoice screen > Quantity
Field > Press Alt + V to select the Stock Journal)

 ALT + X – To cancel a voucher in Day Book/List of Vouchers (At all voucher screens in
Tally. ERP 9)

 ALT + R – To repeat the narration in different voucher type (At almost all screens in Tally.
ERP 9)

 CTRL + A – To accept a form (At almost all screens in Tally. ERP 9, except where a specific
detail has to be given before accepting)

 CTRL + B – To select the Budget (At Groups/Ledgers/Cost Centres/

Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + ALT + B – To check the Company Statutory details (At all the menu screens)

48
 CTRL + C – To select the Cost Centre (At Groups/Ledgers/Cost Centres/
Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + C – To select the Cost Centre (At Stock Groups/ Stock Categories/ Stock Items/
Reorder Levels/ Godowns/ Voucher Types / Units of Measure (Inventory
Info) creation/alteration screen)

 CTRL+ E – To select the Currencies (At Groups/Ledgers/Cost Centres/

Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + G – To select the Group (At Groups/Ledgers/Cost Centres/

Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + H – To view the Support Centre (At Almost all screens in Tally. ERP 9)

 CTRL + I – To select the Stock Items (At Stock Group/ Stock Categories/ Stock Items/
Reorder Levels/ Godowns/ Voucher Types / Units of Measure (Inventory
Info) creation/alteration screen)

 Ctrl + Alt + I – To import statutory masters (At all menu screens)

 CTRL + K – To log in as Remote Tally.NET User (At Almost all screens in Tally. ERP 9)

 CTRL + L– To select the Ledger (At Groups/Ledgers/Cost Centres/

Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + L – To select the Ledger (At the creation and alteration of Vouchers)

 CTRL + O – To select the Godowns (At Stock Group/ Stock Categories/ Stock Items/
Reorder Levels/ Godowns/ Voucher Types / Units of Measure (Inventory Info)
creation/alteration screen)

49
 CTRL + Q – To abandon a form wherever you use this key combination, it quits that screen
without making any changes to it (At almost all screens in Tally. ERP 9)

 CTRL + R – To repeat narration in the same voucher type (At creation/alteration of voucher
screen)

 CTRL + Alt + R – Rewrite data for a Company (From Gateway of Tally screen)

 CTRL + S – Allows you to alter Stock Item master (At Stock Voucher Report and Godown
Voucher Report)

 CTRL + U – To select the Units (At Stock Groups/ Stock Categories/ Stock Items/ Reorder
Levels/ Godowns/ Voucher Types / Units of Measure (Inventory Info) creation/alteration
screen)

 CTRL + V – To select the Voucher Types (At Groups/Ledgers/Cost Centres/

Budgets/Scenarios/Voucher Types/ Currencies (Accounts Info) creation and alteration
screen)

 CTRL + V – To select the Voucher Types (At the creation of Sales/Purchase Voucher screen)

 CTRL + K – To login to Control Centre (At almost all screens of Tally. ERP 9)

 CTRL + H – To access Support Centre, wherein you can directly post your queries on the
functional and technical aspects of Tally.ERP9, Shopper and Tally. Developer (At almost all
screens of Tally. ERP 9)

 Alt + Enter – To view the Voucher display (At Day Book and almost all Voucher Reports)

 Alt + S – To view Stock Query report (At all Voucher Creation and Alteration screens where
inventory is applicable except Contra, Reversing Journal, Memorandum and Physical
Stock Voucher)

 Alt + Z – To zoom in to the print preview to 100% screen (At all print preview screens that
appear on pressing Alt + P with the option I: With Preview enabled)

50
 (+) – To zoom in to the print preview (At all print preview screens that appear after
pressing Alt + Z)

 (–) – To zoom out of the print preview (At all print preview screens that appear after
pressing Alt + Z)

 CTRL + Scroll wheel (Mouse Wheel) – To zoom in to the print preview (At all print preview
screens that appear after pressing Alt + Z)

 SHIFT + Scroll wheel (Mouse Wheel) – To scroll horizontally – left to right or right to left
(At all print preview screens that appear after pressing Alt + Z)

 ALT + H – To access context-sensitive help (At all screens of Tally. ERP 9)

 CTRL + ALT + H – To access Add-on help, if available (At all screens of Tally. ERP 9)

51