3. Real life accounting is quite different from textbook
problems
Textbook
transaction 30.1.2011 Purchased goods from Dell for Rs 1 lakh on 3 months
credit
Real Time
transaction 1.12.2010 - Finance Department approves the budget for purchase
of 5 computers at Rs 20,000 each for a total of 1 lakh
5.12.2010 - On receiving the approval, Purchase Department
seeks Quatations from different vendors
28.12.2010 - Based on the price/ features, purchase department
finalizes a vendor, which is Dell Computers
1.1.2011 - A Purchase Order (PO No: BSC12897Y) is placed with
Dell Computers for 5 Intel Duo Core machines, 17 inch monitors at
Rs 20,000 each (Rs 1 lakh)
30.1.2011 20 Dell computers are delivered along with a Delivery
Challan (DC No: BLR13556)
5.2.2011- A sales invoice number BL12567 dated 3.2.2011 is
received from Dell Computers , which contains payment terms
(3 months credit)
5.5.2011 - A cheque for Rs 1 lakh is issued to Dell Computers
Record
purchases
Record payment
4. DOCUMENTATION - PURCHASES
Quotation
• Issued by: Seller -Vendor
• Purpose: Give a final price at which goods will be sold.
Purchase Order
• Issued by: Buyer
• Purpose: Formal confirmation of intent to purchase from vendor
Delivery challan
• Issued by: Seller
• Purpose: Proof of delivery of goods
Purchase Invoice
• Issued by: Seller (For seller, it is called a sales invoice)
• Purpose: Important final Document evidencing sale and contains price,
quantity and description of goods, taxes levied (Cenvat, VAT, Service Tax
etc)
Receipt
• Issued by: Seller
• Purpose: Confirmation of receipt of cash/ bank payment
Debit Note
• Issued by: Buyer
• Purpose: Rejected/ returned goods for whose value seller is a debtor to the
buyer
5. DOCUMENTATION – PURCHASES (SUMMARY)
Quotation
Purchas
e Order
Delivery
Challan
Purchas
e
Invoice
Receipt
Debit
Note
7. DOCUMENTATION – OTHER TRANSACTIONS
Salar
y Slip
Receipt
Voucher
s
Deposit /
Withdrawal
Slips
Tax
challans
and
forms
Discoun
t
Coupon
s
Bills of
Exchan
ge
8. Real life accounting is quite different from textbook
problems
Textbook
transaction 30.1.2011 Paid Salaries to Ram Rs 10,000
Real Time
transaction 1.12.2010 – Interviewed Ram, Raj, Rita for sales executive position
5.12.2010 – Made an offer to Ram for sales executive role
28.12.2010 – Ram communicated his acceptance over email
30.12.2011 – Sent employment letter to Ram who signed it
immediately
1.1.2011 – Ram reported to work
30.1.2011- Issued cheque and salary slip for Rs 10,000/- to Ram
Record salaries
14. Tally is the market
leader in accounting
software for small to
medium sized
businesses!!
Editor's Notes
Small business – shop selling ready made shirts at Commercial Street
Medium Business – Could be a garment factory which manufactures these shirts and sells to small dealers at commercial Street
Large Business – Life style / West side / Shoppers stop where u get not only shirts but also ur trousers / suits / shoes / accessories and what not…