Fundamentals of Tally

Computerized Accounting System
Computerized accounting can be defined as
accounting done with the aid of computers.
It involve dedicated accounting softwares
and spread sheets to keep track of business
transactions.
Transaction Processing system (TPS)was the
first stage of computerized accounting.
Computerized Accounting System is one of
the TPS which deals with financial
transactions only. 1

Why CAS??
Every Organization has to maintain accurate
and up to date accounting, inventory and
statutory records.
In manual method, maintaining records
became un manageable.
Modern CAS is based on the concept of
database.
DBMS means Database+software.
2

Components of CAS
1. Transactions : It records all transactions
happening in an organization. Every time an
entry is made into the system when a
transaction occurs.
2. Storage : All entering information are stored
in the system. Most companies perform
backups inorder to avoid data loss.
3. Reports : Record all information and
summarize it in the form of financal
statements periodically. 3

Features of CAS
•Quick preparation of accounts and make
available the accounting statements on time.
•It ensures control over accounting work and
records.
•Minimum errors and mistakes.
•Maintenance uniform accounting statements
and records.
•Easy access and reference of accounting
information
4

•Flexibility in maintaining accounts.
•Less clerical work, neat and accurate.
•Adapts current and future needs of the
business.
•Generates real time repots.
5

Difference between manual and
computerized accounting
6
Manual Accounting
Definition:
We keep physical register of
journal and ledger for keeping
the record of all the
transactions
Computerized Accounting
Here we use computer and
different accounting softwares
Calculations :
All calculations are done
manually
Calculations are done
automaically

7
Recording
Financial transactions are
entered in the book of original
entry
These transactions are stored
in a well defined database
Adjusting Entries
In manual accounting
adjusting entries are made to
adhere the principle of
matching
No adjusting entries
Trial Balance
Trial balance should be made
manually Produce trial balance
automatically

8
Financial Statements :
We have to make the financial
statements manually by carefully
transferring trial balance’s figure to
income statements and balance
sheet
Financial statements will be
automatically generated
Speed:
Very time consuming, Calculations
are done manually which will leads
to low speed
Much fast compared to manual
system
Backup :
More chance of data loss All transactions are saved and
backuped.

Merits
1. Large number : CAS is capable of handling
large number of transactions with speed
and accuracy.
2. Instant reporting : Offers quick and quality
reporting because of its speed and
accuracy.
3. Reduced paperwork : Manual accounting
system requires large physical storage
space, but it is reduced by computerized
accounting system. 9

4. Flexible reporting : CAS is capable of generating
reports of any balance as and when required and for
any duration which is within the accounting period.
5 . Accounting queries : There are accounting queries
which are based on some external parameters.
supports SQL in database.
6. On-line facility : CAS offers online facility to store
and process data so as to retreive information to
generate and view financial transactions.
10

7. Speed and Accuracy : reports generated by
CAS is accurate and therefore quite reliable
for decision making. In manual system, the
reports can be inaccurate, distorted and
therefore not reliable.
8. Security : Only authorized users are
permitted to have access to accounting data.
9 Automated document production : Invoice,
credit notes, payroll etc are generated
automatically. 11

10. Up-to-date information : The accountng
records are automatically updated and so
account balances(eg :- customer account) will
always be up-to-date.
11. Availability f information : Financial and
accounting data are instantly available to
users at different locations.
12. Cost Savings : It reduces staff time, reduce
audit expenses.
12

13. Use Multiple Currencies : CAS can deal with
multiple currencies. Problem associated with
exchange rate changes can be handled.
13

Demerits
1. High Cost :
High installation and maintenance cost. Will not be affordable
for small industries.
2. Required special skill :
Required persons will special skill, ie proper training must be
given to the people who are using these accounting software.
3. Technical Problem : frequent power failure and repair may
affect the accounting work very much. More chance of virus
attacks.
14

4. System Failure : when there is a system
crash, there is a high risk of losing data. It will
be very difficult if it happens at the end of a
financial year.
5. Security : Passwords, locks etc must be given
additionally in order to protect the data from
any unauthorized users.
15

Introduction to Tally 9
•Tally is an accounting software released by Tally
Solutions Pvt Ltd.
Different Versions are :
1. Tally 5.4
2. Tally 6.3
3. Tally 7.2
4. Tally 8.1
5. Tally 9.0
6. Tally ERP
16

Fundamentals of Tally
▪ Introduction
▪ Tally is the world's fastest and most powerful
concurrent Multi-lingual business Accounting and
Inventory Management software.
▪ Tally, designed exclusively to meet the needs of small
and medium businesses, is a fully integrated, affordable
and highly reliable software.
▪ Tally is easy to buy, quick to install, and easy to learn
and use.
▪ Tally is designed to automate and integrate all your
business operations, such as sales, finance, purchasing,
inventory, and manufacturing.
17

Features of Tally
1. A leading accounting package: The first version of
Tally was released in 1988 and, through continuous
development, is now recognized as one of the leading
accounting packages across the world, with over a
quarter million customers.
Tally’s market share is more than 90%.
2. No accounting codes: Unlike other computerized
accounting packages which require numeric codes,
Tally pioneered the ‘no accounting codes’ concept.
• Tally users have the freedom to allocate meaningful
names in plain English to their data items in the
system.
18

Features of Tally
3. Complete business solution: Tally provides a
comprehensive solution to the accounting and
inventory needs of a business.
▪ The package comprises financial accounting, book-
keeping and inventory accounting.
▪ It also has various tools to extract, interpret and
present data.
4. Integrated/ Non-integrated accounting and inventory:
With Tally, the user is able to choose between
accounting and accounting with inventory. If
accounting with inventory is opted for, the user can
choose whether it should be integrated or not. 19

Features of Tally
5. Flexible and easy to use: Tally is very flexible.
▪ It mimics the human thought process, which means
that Tally can adapt to any business need.
▪ Tally users need not change the way their business is
run to adapt to the package.
6. Speed : Tally provides the capability to generate
instant and accurate reports, which assists the
management to take timely and correct decisions for
the overall productivity and growth of the company.
20

Features of Tally
7. Power : Tally allows the user to maintain multiple
companies and with unlimited levels of classification
& grouping capabilities.
▪ It also allows drill down facility from report level to
transaction level.
8. Flexibility : Tally provides flexibility to generate
instant reports for any given period (month/year) or at
any point of time besides providing the facility to
toggle between Accounting & Inventory reports of
the same company or between companies.
21

Features of Tally
9. Concurrent multi-lingual capability : Tally offers you
the exclusive capability of maintaining your accounts
in any Indian language, viewing them in another
language and printing them in yet another Indian
language.
10.Real time processing : Immediate posting &
updation of books of accounts as soon as the
transactions are entered, thereby facilitating instant
statements & Reports.
▪ It also faciliaties real-time multi-user environment.
22

Features of Tally
11.Versatality: Tally is suitable for a range of
organizations, from small grocery stores to large
corporations with international locations and
operations.
12. Multi-platform availability: Tally is available on
Windows 95, 98, ME, 2000 and NT. It runs on a
single PC or on a network. On a network, it supports
access via any combination of platforms.
13. Online Help : The Tally Online Help (Alt+H)
provides instant assistance on basic and advanced
features or any other relevant topics of Tally.
23

Features of Tally
14. Remote Access : Tally provides remote capabilities
to access the data from any-where and anytime.
15. Control Centre : works as an interface between the
user and Tally installed at different sites and enables
the user to centrally configure and administer
Site/User belonging to an account.
16. Support Centre : allows a user to directly post his
support queries on the functional and technical
aspects of the Product.
24

Technology Advantages
1. Simple and rapid installation: Tally has a simple,
menu-driven installation procedure.
▪ The user can install the program files on any drive if
the hard disk has partitions.
▪ The user can also specify the name and directory
location of the program files.
▪ Tally uses minimum hard disk space in the local
drive. Its installation on the local disk takes just a few
seconds.
25

2. Unlimited multi-user support: A multi-user version of
Tally can be installed on a network, having any
number of computers with different operating
systems such as Win 95, 98, NT, 2000, XP and
Linux.
3. Internal backup and restore: Tally has an in-built,
user-friendly ‘backup and restore’ option.
▪ It helps the user to take a backup of one or more
companies or all companies, in a single directory, in
the local hard disk, or in any external media.
26

4. Data reliability: Tally offers reliable data. It uses a
flexi-field, flexi-length, self-indexed, weighted file
structure for an extremely compact and fast database.
▪ Tally is robust and even if there is a power failure or
the computer is incorrectly shut down, data is not
lost.
▪ Tally uses signaling quality data integrity checks, at
regular levels, to ensure the complete reliability of
data.
27

5. User-defined security levels: Tally offers high levels
of security.
▪ Users can define multiple levels of security according
to their requirements.
▪ Every authorized user in the company can have an
individual password, with rights to use specific
features only.
▪ The user with the administrator level password will
have full access and can set controls for other users.
28

6. Data security: Tally’s data integrity checks ensure
that there are no external changes to the data.
▪ Tally also uses a binary encoding format of storage to
prevent devious grouping of information.
7. Tally audit: The Tally audit feature provides the user
with administrator rights and the capability to check
the entries made by the authorized users and alter
these entries, if necessary.
▪ Once the entries are audited, Tally displays the
altered entries, if any, along with the name of the
user, who has altered the entry, and the date and time
of the alteration. 29

8. Multi-directory for company management: The user
can create multiple directories to store data.
▪ The data stored in these directories can be accessed
directly in Tally, by specifying the path.
9. Import/ Export of data: Any transaction can be
exported and imported to other software after suitably
altering the current structures to accept the Tally data
structure. Data can also be imported to Tally by
writing a TDL program.
▪ The data which is to be exported from Tally can be in
XML, HTML or ASCII format.
30

10.Tally Synchronization: Synchronization is the process
of exchanging Tally data between two or more
locations.
▪ This process enables a branch office to send its data to
the head office, over the Internet or a private network.
11. Graphical analysis of data: Tally provides graphical
analysis of data which helps the user to perform deeper
analysis.
▪ The user can generate graphical analysis reports such
as Sales register, Purchase register, Ledgers,.
▪ This helps the management to quickly judge
performance and be better prepared for difficult times.31

12. Ability to preview and publish reports and documents
on the Internet: Companies which want to publish
reports and price lists on their website can do so
directly from Tally.
13. E-mail Facility: Tally facilitates the mailing of any
Tally report or document.
14. Multilingual capability: Tally is the world's first
accounting and inventory software with multilingual
capability. Currently, Tally’s multilingual capability
extends to 12 languages which include nine Indian
languages (Hindi, Gujarati, Punjabi, Tamil, Telugu,
Mar-athi, Kannada, Malayalam and Bengali), Bahasa
Melayu and Bahasa Indonesia.
32

Tally Screen Components
1. Title bar: Displays the Tally version number.
2. Horizontal button bar: Selection of Language
key, Keyboard Language and Tally Help.
3. Close button: Performs the standard Windows
Operating Systems function (Windows 95
onwards), allowing you to minimize Tally
and work on other applications.
*. To restore Tally, click the Tally icon on the
taskbar.
34

Tally Screen Components
4. Gateway of Tally: Displays menus, screens,
reports and accepts the choices and options which
you select to view data as required.
5. Buttons toolbar: Displays buttons which provide
quick interaction with Tally. Only buttons
relevant to the current task are visible.
6. Calculator Area: Used for Calculator functions.
7. Info Panel: Displays Version number, License
details, Configuration details.
35

Creation of a Company
▪ Go to Gateway of Tally > Company Info. > Create
Company
▪ Fields Description
1. Directory Tally assumes that the company is to
be created in the data path given in
the Tally.INI file,which is displayed
by default. This field is skipped by
default. However, you can change
this path, if you want to, by using the
backspace key, so that Tally saves
the data to a different directory
specified. 36

2. Name This specifies the name of the
company as it appears in Tally. If
you have several companies to create
with similar names, you will have to
distinguish between them to provide
a unique name for Tally.
3. Mailing Name The company name given in the
Name field automatically appears in
this field. This can be changed
according to your requirements.
37

4. Statutory Compliance for Select a country
from the list of countries.
5. State Select the appropriate State from the
list of States.
6. Pin Code Enter the PIN code of the specified
address.
7. Telephone No. Enter the telephone number of the
company.
38

8. E- Mail E-mail address will be used to e-mail
documents, reports and data from
Tally.
9. Mobile No. Enter the mobile number of the
company.
10. Currency Symbol This refers to the currency symbol
Tally will use for monetary values.
By default, Tally displays Rs.
11. Maintain Select the nature of the company i.e,
Accounts only or Accounts with
Inventory. 39

12. Financial Year From Specify the Financial Year
(FY) for the company. Tally
considers 12 months from the date
you give here as the Financial Year.
For example, if you give 1st April
2013, your FY will be April to
March - in this case, ending with
31st March 2014.
40

13.Books Beginning From The date given for ‘Financial
Year From’ is automatically
displayed. However, we can specify
the actual date on which the books of
accounts start.
14. TallyVault Password:TallyVault is an enhanced
security feature utilised to protect
company data in an encrypted form
by means of a Password.
15.Security Control Tally has a range of security controls,
which can define the authority of various users to access
the information and to enter/alter/delete the vouchers. 41

To Select a Company
▪ Go to the Gateway of Tally > Alt + F3 > Company
Info. > Select Company OR Press F1.
▪ Tally displays the List of Companies screen.
▪ All the companies created are displayed in an
alphabetical order.
▪ Select the company name from the list given.
42

To Shut a Company
Info. > Shut Company.
▪ Select the Company which you need to shut from the
List of Companies.
▪ You can also use Alt + F1 to shut a Company from
the Gateway of Tally screen.
43

To Alter Company Details
Info. > Alter.
▪ Select the company which you need to alter from the
List of Companies and press Enter to view the
Company Alteration screen.
▪ Alter the company details as required and accept the
screen.
44

To delete a Company
▪ To delete a company, you have to load the company
first.
1. Select F3: Cmp Info. (ALT+F3) from the Gateway
of Tally to proceed to theCompany Information
menu.
2. Select Alter and press Enter.
3. Select the company to be deleted. The Company
Alteration screen is displayed.
4. Use Alt + D to delete. Tally.ERP 9 will prompt for a
confirmation on deleting the company
45

Steps involved in the operation of
Tally9
•Step 1 : Create Company
•Step 2 : Provide F11 features
•Step 3 : Set date and F12 Configuration
•Step 4 : Open necessary groups and ledger accounts
•Step 5 : Inventory Creation(If accounts with
inventory)
•Step 6 : Voucher Entry
•Step7 : Reports
46

F11:Features
▪ The F11 Features is divided into the following major
categories:
A. Accounting Features
B. Inventory Features
C. Statutory & Taxation Features
▪ You can press F11 (functional key) from any screen
of Tally or you may also click on the F11 Features
button available in the button bar, to enable the
required features.
▪ The F11 Features are specific only to the company
currently in use. 47

F11:Features
▪ F1: Accounting Features
▪ The Accounting Features consists of configurations
, functionalities, which generally affects Accounting
transactions and reports. The Accounting features is
further sub-divided into six sections, namely :
1. General
2. Oustandings Management
3. Cost/ Profit Centres Management
4. Invoicing
5. Budgets/ Scenario Management
6. Other Features
48

F11:Features
1. General
A. Integrate Accounts and Inventory
▪ This option has a significant effect on the Balance
Sheet and Profit & Loss Account.
▪ If set to Yes, it extracts the stock/inventory balance
figures from the inventory records and provides a
drill down to the Stock registers from the Balance
Sheet.
▪ If set to No, it ignores the inventory books figures
and picks up manually entered closing stock balances
from the ledger account created. 49

F11:Features
B. Income/Expense Statement Instead of P & L
▪ By Default, this option is set to No.
▪ If set to Yes – Tally displays Income & Expenses A/c
instead of Profit & Loss A/c in the Gateway of Tally 9
Menu.
▪ Income and Expenditure statement generally used for
Non-Trading accounts and Profit & Loss a/c are used for
trading accounts.
C. Allow Multi-Currency
▪ By Default, this option is No.
▪ Set this option to Yes, if you want to create multiple
currencies 50

F11:Features
2. Outstandings Management
A. Maintain Bill wise Details
▪ The Bill-wise facility is made functional by setting
this option to Yes.
▪ By activating the Billwise feature, the ledger masters
under Sundry Debtors and Sundry Creditors
automatically displays an additional option called
Maintain balances bill-by-bill.
B. Activate Interest calculation
▪ Set this option to Yes to enable Tally to calculate
interest automatically based on the interest rate and
style of calculation specified. 51

F11 Features
3. Cost/Profit Centres Management
A.Maintain Payroll
▪ Set this option to Yes if you want to maintain Payroll
information on Tally for the selected company .
B. Maintain Cost Centres
▪ A Cost Centre can be defined as a unit of an
organization to which transactions can be posted.
When only costs or expenses are allocated to these
units, they are referred to as Cost Centres. The Cost
Centre feature is activated by setting this option to Yes.
52

F11 Features
4. Invoicing
A. Allow Invoicing
▪ Set this option to Yes, to create Sales and Purchase vouchers
in the invoice format. The advantage of using the invoice
format for sales invoice entry is that it enables automatic
calculations of Duties and Taxes accounts.
B. Enter Purchases in Invoice Format
▪ Set this option to Yes, to enable voucher class option in
purchase voucher type.
C. Use Debit/Credit Notes
▪ The Debit Note and Credit Note voucher types are made
available only if this feature is set to Yes.
53

F11 Features
5. Budgets & Scenario Management
A. Maintain Budgets and Controls
▪ Set this option to Yes, to create multiple budgets.
B.Use Reversing Journals & Optional Vouchers
▪ Setting this option to Yes displays
the Scenario option in Accounts Info menu.
54

F11 Features
6. Other Features
A. Enable Cheque Printing
▪ Set this option to Yes, to enable Cheque Printing.
Refer Cheque Printing for details.
B. Allow Zero Valued Entries in Vouchers
▪ Set this option to Yes, to allow Zero valued entries in
vouchers.
55

F11 Features
▪ F2: Inventory Features
▪ The Inventory features comprises of configurations/
functionalities pertaining to Inventory transactions
and reports. The Inventory features is further sub-
divided into seven sections, namely :
1. General
2. Storage & Classification
3. Order Processing
4. Invoicing
5. Purchase Management
6. Sales Management
7. Additional Inventory Vouchers
56

F11 Features
1. General
A. Integrate Accounts and Inventory
▪ This option has a significant effect on the Balance
Sheet and Profit & Loss Account
B.Allow Zero Valued Entries in Vouchers
▪ Set this option to Yes, to allow zero valued entries in
Inventory vouchers.
57

F11 Features
2.Storage & Classification
A.Maintain Multiple Godowns
▪ Set this option to Yes, if you have more than one stock
point/storage Locations/ Godowns, and you want to track
stock movement across these Locations.
B. Maintain Stock Categories
▪ Set this option to Yes, if you wish to create and maintain
Stock Categories. This creates a new field Category in the
Stock Item Creation screen.
C. Maintain Batch-Wise Details
▪ Set this option to Yes, to maintain batch information
pertaining to Stock Items.
58

F11 Features
3. Order Processing
A. Allow Purchase Order Processing
▪ Set this option to Yes, to create Purchase Orders. This
feature can also be used for pre-closure of purchase order.
B. Allow Sales Order Processing
▪ Set this option to Yes, to create Sales Orders. This feature
can also be used for pre-order closure of sales order.
C. Allow Job Order Processing
▪ Set this option to Yes, to create Job Work Out/In Orders.
59

F11 Features
4. Invoicing
A. Allow Invoicing
▪ Set this option to Yes, to create Sales and Purchase vouchers in the
invoice format. The advantage of using the invoice format for sales
invoice entry is that it enables automatic calculations of Duties and
Taxes accounts.
B. Enter Purchases in Invoice Format
▪ Set this option to Yes, to enable voucher class option in purchase
voucher type.
C. Use Debit/Credit Notes
▪ The Debit Note and Credit Note voucher types are made available
only if this feature is set to Yes.
D. Separate Discount Column on Invoices
▪ This option is active only if Allow invoicing is set to Yes.
60

F11 Features
5. Purchase Management
A. Track Additional Costs of Purchase
▪ Set this option to Yes, to obtain a break-up of
purchase costs, without the need to separately debit
ledger accounts for expenses.
6. Sales Management
▪ Use Multiple Price Levels
▪ Set this option to Yes to create Multiple Price Levels.
Refer Enable and Create Price Lists for more details.
61

F11 Features
7. Additional Inventory Vouchers
A. Use Tracking Numbers (Delivery/Receipt Notes)
▪ Set this option to Yes, if you want to use tracking numbers to
maintain the relation between Delivery notes and Invoices/Bills.
This is available for both Purchases and Sales.
B. Use Rejection Inward/Outward Notes
▪ Set this option to Yes, if you wish to record rejection of goods
separately and not through a common Debit Note or Credit Note.
C. Use Material In/Out
▪ Set this option to Yes, to record transfer of item quantity towards the
party and transfer material from one Godown (Location) to the
other.
D. Track Stock Item Cost
▪ Set this option to Yes, to analyse the cost involved for an item.
62

F11 Features
▪ F3 : Statutory & Taxation
▪ The Statutory & Taxation features comprises of
configurations/ functionalities pertaining to statutory
compliances available in Tally.
▪ The Statutory features are country specific and strictly
depends upon the Country selected in the Company
Creation screen.
▪ The following features are available, when India is
selected in the Statutory Compliance for field in the
Company Creation screen.
1. Excise 2.Value Added Tax
3. Service Tax 4.Tax Deducted at Source
5. Tax Collected at Source 6.Fringe Benefits Tax
63

F12 Configurations
▪ In Tally, the F12: Configurations are provided for
Accounting, Inventory & printing options and are
user-definable as per your requirements.
▪ The F12: Configurations are applicable to all the
companies residing in that Tally.ERP 9 Data
Directory.
▪ There are numerous settings available under various
menus in the F12: Configurations screen, which may
be configured for any additional information required
to be entered during master creations, voucher entry
and printing.
65

F12 Configurations
▪ The enteries in F12 configrations:
1. General
2. Numeric Symbols
3. Accts / Inventory Info.
4. Voucher Entry
5. Invoice / Orders Entry
6. Printing
7. Data Configuration
8. TDL Configuration
9. Advanced Configuration
10. Licensing
66

F12 Configurations
1. General
▪ You can configure Country Details, Style of Names,
Dates and Numbers in the General configura-tion
screen.
2. Numeric Symbols
▪ You can configure Number Styles and Symbols used
to represent Positive Numbers, Negative Numbers,
Debit Amounts and Credit Amounts by using
Numeric Symbols.
▪ This is displayed on the Number Styles configuration
screen.
67

F12 Configurations
3. Accts / Inventory Info.
▪ The fields pertaining to both Accounting and Inventory
Info. can be configured from this menu.
A. Master Configuration
▪ Additional information can be configured by setting the
options to Yes which will accordingly appear in the
masters.
▪ Allow ALIASES along with names: This configuration
helps in identifying an account by another name.
▪ Allow Language ALIASES along with names: This
configuration helps the user to give an alias in any local
language.
68

F12 Configurations
B. Accounts Masters - Allow ADVANCED entries in
Masters: This configuration displays the additional
fields in the Accounting Masters such as:
▪ Group behaves like a Sub-Ledger
▪ Nett Debit/Credit Balances for Reporting
▪ Use ADDRESSES for Ledger Accounts
C. Inventory Masters
▪ Allow ADVANCED entries in Masters
▪ Use PART NUMBERS for Stock Items
▪ Use Description for Stock Items
▪ Use REMARKS for Stock Items
69

F12 Configurations
4. Voucher Entry
▪ Both the Accounting and Inventory Vouchers can be
configured from this menu for additional information.
A. Accounting Vouchers
▪ Skip Date field in Create Mode (faster entry!)
▪ Set to Yes, the Tally cursor goes directly to the Dr or Cr
field depending on the voucher type.
▪ Use Single Entry mode for Pymt/ Rcpt/Contra: This
configuration helps in selecting multiple debits or credits
depending on the type of entry.
70

F12 Configurations
B.Inventory Vouchers
▪ Use Ref. Number in Stock Journal: This configuration
provides an additional field called Ref. in the Stock journal,
where the user can enter the reference number.
▪ Warn on Negative Stock Balance: This configuration warns
the user in cases where the item selected reaches a negative
balance in the Invoice mode.
▪ Show Godown wise Details : This configuration enables
the user to view Godown details.
71

F12 Configurations
5. Invoice / Orders Entry
▪ The Invoice entry and Order entry screens can be
configured for additional information such as export
details, shipping details, etc.
6. Printing
▪ This configuration helps the user to configure the printing
screens for the reports and transactions.
7. Data Configuration
▪ This configuration helps the user to define location of
Language Files, Tally Configuration File, Export Files,
Data Files and details of the companies to be loaded on
startup.
72

F12 Configurations
8. TDL Configuration
▪ This screen provides details regarding TDL
Configuration viz., Local TDLs, Account TDLs &
Remote TDLs enabled for the product.
9. Advanced Configuration
▪ This configuration helps the user to specify
Client/Server Configuration, Connection
configuration and Proxy configuration for ODBC
connectivity and Synchronization of Data.
73

F12 Configurations
10. Licensing
▪ This configuration helps the user to update, surrender,
reset license and also configure existing License
74

Buttons on the Button Panel
▪ There are underlined and non-underlined buttons on
the panel.
1. F1 → Select Company
2. Alt + F1 → De-activates a company
3. F2 → To Change the date
4. Alt + F2 → To change the period
5. F3 → Company - to switch from one company
to another active company.
6. Alt + F3→ This invokes company info menu.
75

Buttons on the Button Panel
7. F4 → Contra Voucher
8. F5 → Payment Voucher
9. F6 → Receipt Voucher
10. F7 → Journal Voucher
11. F8 → Sales Voucher
12. F9 → Purchase Voucher
13. F12 → Configure
14. F11 → Features. You can select or modify
different features of a company.
76

Groups
▪ Group is a collection of Ledgers of the same nature.
▪ In a business, expenditures like telephone expenses,
electricity charges, conveyance etc., are commonly
incurred.
▪ Ledgers based on these expenditures are created to be
used while accounting vouchers are entered.
▪ To know the total of such expenses for any period (a
week or a month), similar natured expense ledgers are
grouped.
77

Groups
▪ By default, Tally provides a list of Groups called
pre-defined groups.
▪ The user can create any number of Primary Groups
and Sub Groups which are again grouped under a
Primary Group/Sub Group.
▪ There are 28 pre-defined Groups in Tally, out of
which 15 are Primary Groups and 13 are Sub-Groups.
78

Reserved primary groups and Subgroups are:
79
Assets Liabilities Income Expense
1.Fixed
Assets
7.Capital
g. Reserves
and Surplus
10. Sales 13. Purchase
Account
2.
Investments
8.
Loans(liability)
h. Bank o/d
i. Secured
Loan
j. Unsecured
Loan
11. Direct
Income
14. Direct
Expense
3. Current
Assets
a. Bank a/c
b. Cash In
Hand
c. Deposits
9. Current
Liability
k. Duties And
Taxes
l. Provision
m. Sundry
12. Indirect
Income
15. Indirect
Expense

Basic types of Accounts
▪ Account is divided in following three types:
1. Personal account: Any individual person or any
firms or any company or a bank is considered in a
personal account.
2. Real account: Account of any physical things. The
cash account or goods account are examples of real
account.
3. Nominal account: Account of any invisible things
that means that things are in terms of cash. For
example: insurance account, rent account etc.
80

Pre-defined Groups
▪ 15 Primary Groups
1. Capital Account -This group consists of Capital and
Reserves and Surplus of the Company. For example
Share Capital, Partner's Capital, retained earnings.
2. Current Assets - Current assets are those assets
which are to be converted into cash with a period of
one year or during the normal operating cycle of the
business.
81

Pre-defined Groups
3. Current Liabilities -Current Liabilities are those
liabilities which require the use of Current Assets
for settlement.
 In other words, liabilities payable within a year or
during the operating cycle of the business,
whichever is longer, out of the existing current asset
or by creation of other current liabilities come under
this category.
 It also includes amount set apart or provided for any
unknown liability like Provision for Tax, Pension
etc.
82

Pre-defined Groups
4. Fixed Assets - It refers to those assets which are
held by way of investment and not for the purpose
of resale.
 They are of a permanent nature. These are acquired
for the purpose of creating production and income
earning capacity or for increasing the production and
income earning capacity.
 For example purchase of Machinery, Building etc.
Fixed assets are further classified into
(i) Tangible Assets
(ii) Intangible Assets.
83

Pre-defined Groups
▪ Tangible Assets: It refers to those assets which can be
seen, felt and touched with physical existence such as
machinery, land and building, furniture etc.,
▪ Intangible Assets: These assets do not have any
physical existence. Goodwill, patents, trademarks and
copyrights are examples of Intangible assets.
5. Investment - This is a convenient head to view all
the company's total investments.
 Investment accounts such as Investment is Shares,
Bonds, Government Securities, Long-term Bank
deposit accounts,etc., shall be classified under this
group 84

Pre-defined Groups
6. Loans (Liability) This is a convenient head to view
all the bank transaction.
 Company have the Secured money transferring
method for loans.
 All long term loans taken by the company will come
under this Group. For example, debentures Loans
from financial institution.
7. Suspense account -In modern accounting, many
large corporations use a Suspense Ledger to track
money paid or recovered, the nature of which was
not yet known then. Theoretically speaking, this
group should not exist. 85

Pre-defined Groups
▪ The most common example is money paid as
Advance for Traveling expenses whose details would
be known only upon submission of the TA bill on the
completion of a tour.
▪ Some companies may prefer to open similar accounts
under Loans and Advances (Asset) group. Suspense
Account is a Balance Sheet item.
8. Miscellaneous Expenses (asset) - The first item
under this head is Preliminary Expense which is also
known as formation expenses.
 Expenses associated with the issue of shares and
debentures can also be classified under this head. 86

Pre-defined Groups
▪ The other items that can come under this head are
Share and Debenture Discount, Deferred Revenue
Expenses like expenditure on Advertisement,
Research & Development (R&D) etc.
▪ These are normally written off against profits over a
period of time.
▪ Until it is fully written off, the amount not written off
appears under this head.
9. Branches and Divisions - This is a group of sheer
convenience. If a company has many branches, then
the company can make use of this group.
87

Pre-defined Groups
▪ If you wish to maintain books of the branches /
divisions on your computer, you must open a separate
company (Tally allows maintenance of multiple
company accounts)
10. Sales - Selling of goods in the normal course of
business is termed as Sales.
 If the sale is for immediate cash payment, it is cash
sales. If payment for Sales is deferred, it becomes
Credit Sales, Sales Returns come under this Group.
88

Pre-defined Groups
11. Purchases
▪ Buying of goods for the purpose of resale is termed as
purchases.
▪ If cash is immediately paid for the purchases, then it
becomes cash purchases. If payment is deferred, it is
credit purchases.
▪ Purchase Returns will also come under this group.
12. Direct Incomes [Income (Direct)] - In the case of
professional or servicing companies, which do not
have sales income but have income and professional
fees and services, you can place the ledger accounts
under Direct Income. 89

Pre-defined Groups
13. Indirect Incomes [Income (Indirect)] -Incomes such
as Interest received, Discount received, Commission
earned shall be classified under this Group
14. Direct Expenses [Expenses (Direct) -This is a Group
for all direct expenses like Wages, Freight, Coolie,
Import Duty, etc.
 In General, all purchase and manufacturing expenses
should be classified under this group.
15. Indirect Expenses [Expense (Indirect)] - All Office,
Administration, Selling Expenses and Financial Expenses
should be classified under this head.
 In other words, those expenses which are not
considered for computation of Gross Profit should be
placed in this group 90

Pre-defined Groups
 Here the 13 sub Groups
1. Bank Accounts:- This is a sub group under current
assets create all bank current accounts under this
group Ex. SBI current A/c, Canara Bank A/c etc.
2. Bank OD Accounts:- This is a sub group under
Loans (Liabilities). It has an Alias name called Bank
OCC accounts, create all loan A/c borrowed by the
company for the purpose of working capital under
this group. Ex. SBI OD A/c, AB OCC A/c
91

Pre-defined Groups
3. Cash – in – hand:- This is a subgroup under current
assets, there is already one system defined cash a/c
under this group. So need not to be create Cash A/c
under this group. If necessary the user should create
petty cash A/c under this group.
4. Deposits:- This is a subgroup under current assets.
Create all deposit accounts under this group Ex.
Telephone Deposit A/c, Electricity deposit A/c,
Showroom deposit A/c.
92

Pre-defined Groups
5. Duties & Taxes:- This is a sub group under current
liabilities create all duties & taxes A/c’s that are
collected from customers and payable to various
government under this group
 ex. Sales tax collection / payable A/c Excise duty
payable A/c etc.,
6. Loans and Advances (Asset):- This is a subgroup
under current asset create all loans & Advances
accounts that are given by the company to staff
members or outsiders under this group
 Ex. Loan to accountant loan to salesman etc.,
93

Pre-defined Groups
7. Provisions:- This is a subgroup under current
liabilities. Create all provision accounts set aside
from profits to meet any unpaid expenditure of the
current year of unforeseen losses of future years
under this group. Ex. Provision for sales tax.
Provision for bad debts etc.
8. Reserves and Surplus:- This is a subgroup under
capital account. It has an alias name called retained
earnings, create all reserve a/c’s set aside from
profits for future development of business under this
group
 ex. General reserve specific like Generator reserve
A/c etc 94

Pre-defined Groups
9. Secured Loans:- This is a subgroup under loans
(liability) Create all loan A/c’s borrowed by the
company against primary or collateral or both types
of securities under this group. Ex. Term loan from
SBI. Term loan from SFC, truck loan from apple
finance corp.
10. Stock in hand:- This is a subgroup under current
assets, when the user company maintains both
accounts and inventory then there is no need to
create stock A/c under this group. The system
automatically displays opening, closing stock values
basing on the stock details entered while recording
purchase and sales transactions in the trading A/c
and balance sheet. 95

Pre-defined Groups
11. Sundry Creditors:- This is a subgroup under current
liabilities create all supplier A/c’s of the company
under this group. These accounts are also called
vendor accounts or accounts payable accounts.
12. Sundry Debtors:- This is a subgroup under current
assets create all customers A/c’s of the company
under this group. These accounts are also called
Accounts receivable accounts.
13. Unsecured Loans:- This is a subgroup under loan
(liabilities). Create all loan A/c’s borrowed by the
company without any security under this group. Ex.
Loan from a friend or father etc. 96

Groups
▪ We can access all the configuration options for the
Masters from the Gateway of Tally > F12: Configure
> Accts / Inventory Info.
▪ Go to the Gateway of Tally > Accounts Info. >
Groups > Create (Single Group).
▪ Click on F12: Configure button and set Yes to
1. Allow ALIASES along with Names
2. Allow Language ALIASES along with Names.
3. Allow ADVANCED entries in Masters.
97

Groups
▪ Accept the configuration screen and Tally displays
the Group Creation Screen in which you will notice
additional information like:
1. Alias – This is a simple mechanism of identifying an
account by another name.
2. Group behaves like a Sub-Ledger – The group
behaves like a Control Account for the ledgers it
contains when set to Yes.
3. Nett Debit/Credit Balances for Reporting – By
setting this to Yes, amounts will be displayed as a
net figure instead of separate debit and credit
balances in reports. 98

Groups
▪ Displaying Multiple Groups
▪ Go to Gateway of Tally > Accounts Info. > Group > Display
(under Multiple Group)
▪ Select the Group from the List of Groups to display all the
Groups under the selected Group or select All Items to
display all Groups.
▪ The Multi Group Display screen lists Groups and the
corresponding details of the Groups.
▪ Altering Multiple Group
▪ Go to Gateway of Tally > Accounts Info. > Group > Alter
(under Multiple Group)
▪ Select the Group for which you want to alter from the List of
Groups.
▪ In Multi Group Alteration screen, make the necessary
changes and click Yes to save changes.
99

Groups
▪ Deleting Groups
▪ Gateway of Tally > Accounts Info > Groups >
Single/Alter
▪ The Delete function is performed through the single
alteration mode. You cannot delete groups form the
Multiple Alteration mode.
▪ 1. Select the group to be deleted.
▪ 2. Press Alt+D to delete.
▪ However, you cannot delete Tally’s pre-defined
groups, or groups with sub-groups or groups
containing ledgers. The lowest level must be deleted
first. 100

Introduction to Ledgers
▪ A Ledger is the actual account head to which you
identify a transaction.
▪ In Tally, you pass all accounting vouchers using
Ledgers.
▪ However, all Ledgers have to be classified into
Groups.
▪ Hence a thorough understanding of account
classifications is important for working with
Ledgers.
101

Creating a Ledger
▪ Go to Gateway of Tally > Accounts Info. > Ledgers >
Create (under Single Ledger)
1. Name Enter the Name of the account. You
can provide the full name of the
account. Tally does not allow entry
of duplicate names.
2. Alias Enter an alias name if required. You
can access the Ledgers using the
original name or the alias name.
3. Under All accounts must be classified
under their appropriate Groups.
Select the Group under which the
Ledger is created from the List of Groups. 102

Creating a Ledger
4. Opening Balance If yours is an existing company
whose books you are entering
onto Tally, Opening Balance
would be applicable in
circumstances such as when the
Ledger is an asset or a liability
and if it has a balance in the
account as on the date of
beginning of books in Tally.
103

Creating Ledgers
▪ Creating Multiple Ledgers
▪ You can create multiple Ledgers at a time in this mode.
▪ Go to Gateway of Tally > Accounts Info. > Ledgers > Create
(under Multiple Ledger)
▪ Under Group Select the name of the group under
which you want to create the Ledgers
from the List of Groups.
▪ The other fields in the column are:
1. S. No This is auto generated.
2. Name of Ledger Enter the name of the Ledger
3. Under This field defaults to the parent group
selected in Under Group.
4. Dr Specify whether the Opening Balance
is Debit or Credit. Tally follows the
normal accounting principals of
accounting. 104

Displaying Ledgers
▪ Displaying a Single Ledger
▪ Go to Gateway of Tally> Accounts Info.> Ledgers> Display
(under Single Ledger.)
▪ Select the Ledger from the List of Ledgers. The Ledger
Display screen in displayed.
▪ Altering a Single Ledger
▪ Select the Ledger from the List of Ledgers. The Ledgers
Alteration screen is displayed.
▪ You are allowed to alter any information. Make the necessary
changes and Accept Yes to save.
▪ Deleting Single Ledger
▪ You can delete a Ledger account from the Ledger Alteration
screen by pressing ATL+D Tally does not allow deletion of
accounts that have transactions. 105

Displaying Ledgers
▪ Displaying Multiple Ledgers
▪ Go to Gateway of Tally> Accounts Info.> Ledgers> Display
(under Multiple Ledger.
▪ Select All Items from the List of Groups to view the details
of all the Ledgers in Tally.
▪ If you want to view the details of all the Ledgers created
under a Group select the Group from the List of Groups. The
Multiple Ledger Display screen is displayed.
▪ Altering Ledgers in Multiple Mode
▪ Go to Gateway of Tally> Accounts Info.> Ledgers> Alter
(under Multiple Ledger.)
▪ Select any Group or All Items from the List of Groups. The
Multi Ledger Alteration screen is displayed. Make the
necessary changes and Accept Yes to save. 106

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.
1. Accounting Vouchers
2. Inventory Vouchers
3. Optional & Non-Accounting Vouchers
107

1. Accounting Vouchers
▪ Accounting Vouchers are used to record all accounts
related transactions in Tally.
▪ You can selectively set the configuration for entry
to allow only those features, which you require
while entering vouchers.
108

Predefined Vouchers
● Tally comprises of the following predefined
Vouchers, to suit different business requirements for
recording various transactions. Tally also allows you
to create user-defined Vouchers (Voucher Types) as
per your requirements.
◦ Contra Voucher - (F4)
◦ Payment Voucher – (F5)
◦ Receipt Voucher - (F6)
◦ Journal voucher - (F7)
◦ Sales Voucher / Invoice - (F8)
◦ Purchase Voucher / Invoice - (F9)
109

Contra Voucher[F4]
● This kind of voucher is used for transfer of funds where flow
are equal.
● Following transanction done through contra voucher
◦ Cash deposit into the bank
◦ Cash withdrawal from the bank
◦ Funds transfer from one bank to another bank
◦ Cash transfer to petty cash
● Contra Voucher creation screen appears in Single Entry Mode
by default.
● To view Contra Voucher creation screen in Single Entry
mode
● Go to Gateway of Tally > Accounting Vouchers > Select F4:
Contra
110

Payment Voucher[F5]
▪ Transaction related to the payment(either cash or
bank) are recorded here.
▪ It is also used for payment of fixed assets,
purchases, dues to creditors, loans and advances
given, payment of loans etc
111

Reciept Voucher[F6]
▪ All kinds of receipts (inflow) through cash or bank
are recorded in this voucher.
▪ Such receipts from debtors, any income, refund of
loans or advances given , sale of fixed assets etc
Similar to Payment and Contra vouchers, the Single
Entry Mode appears for Receipt Entry as well.
▪ For example, if your company receives money from
a customer for an earlier transaction:
▪ Credit the customer account and debit the Cash account, if
you receive cash or
▪ Debit the Bank account where you need to deposit the
money, if you receive cheque.
112

Reciept Voucher[F6]
● Advance
◦ This method is used for payment without any
previous due arisen to the party.
● Against Ref
◦ Is used for adjustment against any existing dues
● New Ref
◦ Is use for creating any due
● On Account
◦ For lump sum amount
For eg :- Rs 225/- interest received from SBI.
● I
113

Journal Voucher[F7]
● This voucher is also called an adjustment voucher, as
any kind of adjustment for non-cash or bank
transactions.
● Go to Gateway of Tally > Accounting Vouchers
● Click on F7: Journal on the Button Bar or press F7
key
● For example, there may be entries made for interest
accrued or interest to be paid. If a party is involved in
such a transaction the entry will be:
◦ Debit the Party
◦ Credit the Interest Account
115

Journal Voucher[F7]
117
• Depreciation charge on furniture and machinery Rs
800 and Rs 300.

Sale Voucher[F8]
● All kinds of sales transanctions are recorded here
including cash and credit.
● The entries for cash sales are automatically entered in
the cash book or bank.
● For eg.
◦ Sold goods to Mr. Aneesh Rs 25000 on credit
◦ Sold goods for Rs 25000 on cash
118

• Credit notes are used for giving credit to the party.
• For eg. When a buyer returns the goods(sales return)
or allows himself credit due to rate difference or
discount or due to some adjustment.
• F11-> User Debit/Credit Notes ? To yes
Credit Note(Ctrl+F8)

• Exp: Goods sold to Mr A.k Mithra Rs 10000. After
two days he returned goods worth rs 2000 due to
inferior quality.
Credit Note(Ctrl+F8)

Purchase Voucher[F9]
● All kind of purchase transactions are recorded here,
including cash and credit
● The entries for cash purchase are automatically
entered in the cash-book or bank book.
● For eg
◦ Purchased goods on cash Rs 1500 .
◦ Purchased goods from Mr Ajay for Rs 1200 on
credit
121

OPTIONAL VOUCHER
● This is not a separate voucher type.
● It can mark a Regular voucher as optional and then
can be regularized the same.
● Press CTRL + L or click on Optional from the Button
Bar.
● This button toggles with Regular.
● By marking a voucher Optional, the voucher does not
get posted anywhere but remains in the Optional
Register.
● Go to Gateway of Tally- Accounts Info - Voucher
Types> select a Voucher Type- Set Make Optional as
default to Yes. 122

Enabling Optional Vouchers
•Go to Gateway of Tally
•Select F11:F1: Accounting Features
•Set Use Rev. Journals & Optional Vouchers? to
Yes.
•Accept the screen to save.
123

Use of Optional Vouchers
•If you do not want a transaction that is incomplete to
affect the accounts, you can mark this as an Optional
Voucher. Once the transaction is complete, modify
the voucher and post it as a Regular Voucher.
Optional Vouchers allow you to see the impact of
transactions without actually posting them.
•Optional Vouchers can be used to forecast future
sales. For example, create a New Voucher Type Sales
Forecast. Record future sales projections using this
voucher type.
124

•Consider an example: it is the 30th of June
and you would like to view the Balance Sheet
as of today, but June
salaries are not due for payment until the first
week of July. The Balance Sheet will not be
projecting the correct
figures. To overcome this, you can enter an
Optional Voucher dated 30th June.
•Debit Salaries Account
•Credit Provisions (Current Liabilities) Account125

POST-DATED VOUCHERS
● While entering vouchers, you can mark them as post
dated.
● Tally will not update the vouchers in ledgers until the
specified date is approached.
● This is useful to enter transactions that take place on
a regular basis.
● For example, if you pay for something by
installments, you can set up the payments in advance,
and Tally will only enter them in the ledgers as they
fall due.
● Mark vouchers Post Dated by using CTRL+T or click
on Post dated button from the Button Bar. This button
toggles with Current. 127

POST-DATED VOUCHERS
● Post-dated Vouchers Register
● All Post-dated vouchers are maintained in a Post-
dated voucher Register.
● Go to Gateway of Tally- Display- Exception Reports
- Post-Dated Vouchers.
● The major difference between post dated vouchers
and other Unconventional vouchers is that post dated
Vouchers affect regular books of accounts on the date
of the voucher.
● Post-dated vouchers are not available for selection in
Scenarios.
128

REVERSING JOURNALS
● 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.
129

Bill -wise Details
▪ Bill-wise detail is one of the accounting features in tally.
▪ It will help us to maintained our sundry creditors, sundry
debtors bills systematically and we can find out
outstanding amount, due date each bill wise.
▪ During voucher entry we can give bill information of
respective transaction. This feature only applicable
sundry creditors and sundry debtors groups.
▪ Uses of the feature.
▪ Keep our bills systematically
▪ Any time we can find out our pending bills details
▪ Avoid duplicate bill entry
▪ Help us to track the bill payment date.
130

Bill -wise Details
▪ Procedure of the bill –wise details
➢ Press F11-feature key
➢ Activate Maintain Bill-wise details? Yes
➢Press ctlr +A
➢Now we can give bill information
➢When you enter the accounting voucher to check the following
configure are activated.
➢ Show bill-wise details? yes
▪ Bill-wise details consists the following reference
➢ New Reference – this is only for new entries like purchase, sales
➢ Agst Reference – this is against on new reference bills
➢ On Account -this is un known bill payment
➢ Advance - this is advance payment for our future purchase.
▪ 131

REVERSING JOURNALS
● 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. 132

Short cut keys
● Alt+F3 Company information menu
● Enter To accept information typed
into a field.
To accept a voucher or master.
To get a report with further
details of an item in a report.
Esc To remove what has been
typed into a field.
● To exit a screen.
● To indicate you do not want to
accept a voucher or master. 133

Short cut keys
● Short cut keys
● Alt+F3 Company information menu
● Enter To accept information typed
into a field.
To accept a voucher or master.
To get a report with further
details of an item in a report.
Esc To remove what has been
typed into a field.
● To exit a screen.
● To indicate you do not want to
accept a voucher or master. 134

Short cut keys
Alt+D To delete a voucher.
To delete a master.
Ctrl+Enter To alter a master while making an
entry or viewing report.
F2 Date
● Alt+F2 Change period
● Alt+F1 To see detail
● F11 Features company
● F12 Configuration options are applicable
to all the companies in a data
directory.
● Ctrl+N Calculator screen.
● Ctrl+V Voucher mode (Cr. Dr) 135

Purchase Voucher[F9]
● Ctrl+A To accept a form wherever
you use the key combination
the screen or report will be
accepted as it is on this screen.
● Ctrl+Q It quits the screen without making
any changed to it.
Alt+C To create a master at a voucher
screen.
When working within an
amount field presses Alt+C to
act as a calculator. 136

Important
● Tally was Developed by Bharat Goenka
● ERP stands for Enterprise Resource Planning
●
137

Accounts info-ledger
▪ Ledger Group
1. Opening stock Stock in hand
2. Purchase Purchase account
3. Purchase return Purchase account
4. Fright charges Direct expenses
5. Carriage inwards or Purchases Direct expenses
6. Cartage and coolie Direct expenses
7. Manufacturing wages Direct expenses
8. Coal, gas, water Direct expenses
9. Oil and fuel Direct expenses 138

▪ Ledger Group
10. Factory rent,
insurance, electricity,
lighting and heating Direct expenses
11. Sales Sales account
12. Salary Indirect expenses
13. Postage and telegrams Indirect expenses
14. Telephone charges Indirect expenses
15. Rent paid Indirect expenses
16. Rates and taxes Indirect expenses 139

▪ Ledger Group
17. Insurance Indirect expenses
18. Audit fees Indirect expenses
19. Interest on bank loan Indirect expenses
20. Interest on loans paid Indirect expenses
21. Bank charges Indirect expenses
22. Legal charges Indirect expenses
23. Printing and stationery Indirect expenses
24. General expenses Indirect expenses
25. Sundry expenses Indirect expenses 140

▪ Ledger Group
26. Discount allowed Indirect expenses
27. Carriage outwards or sales Indirect expenses
28. Traveling expenses Indirect expenses
29. Advertisement Indirect expenses
30. Bad debts Indirect expenses
31. Repair renewals Indirect expenses
32. Motor expenses Indirect expenses
33. Depreciation on assets Indirect expenses
141

▪ Ledger Group
34. Interest on investment received Indirect income
35. Interest on deposit received Indirect income
36. Interest on loans received Indirect income
37. Commission received Indirect income
38. Discount received Indirect income
39. Rent received Indirect income
40. Dividend received Indirect income
41. Bad debts recovered Indirect income
42. Profit by sale of assets Indirect income 142

▪ Ledger Group
43. Sundry income Indirect income
44. Loan from others Loan Liabilities
45. Bank loan Loan Liabilities
46. Bank overdraft Bank OD
47. Bills payable Current Liabilities
48. Sundry creditors Sundry creditors
49. Mortgage loans Secured loans
50. Expense outstanding Current Liabilities
51. Income received in advance Current Liabilities 143

▪ Ledger Group
52. Other liabilities Current Liabilities
53. Capital Capital account
54. Drawings Capital account
55. Cash in hand Cash in hand
56. Cash at bank Bank account
57. Fixed deposit at bank Deposit
58. Investments Investments
59. Bills receivable Current asset
60. Sundry debtors Sundry debtors 144

▪ Ledger Group
61. Closing stock Stock in hand
62. Stock of stationery Current asset
63. Loose tools Fixed asset
64. Fixtures and fittings Fixed asset
65. Furniture Fixed asset
66. Motor vehicles Fixed asset
67. Plant and machinery Fixed asset
68. Land and building Fixed asset
69. Leasehold property Fixed asset 145

▪ Ledger Group
70. Patents Fixed asset
71. Goodwill Fixed asset
72. Prepaid expenses Current asset
73. Income outstanding Current assset
146

Financial Reports in Tally
 There are three key financial statements.
1.The balance sheet
2. The income statement/Profit & Loss Statement
3.The statement of cash flows
Balance Sheet
 The balance sheet is a financial statement that shows what
the business is worth at one point in time. A standard
company balance sheet has three parts ie. assets, liabilities
and ownership equity or capital.
 The balance sheet presents a company's financial position at
the end of a specified date. Some describe the balance sheet
as a "snapshot" of the company's financial position at a point
(a moment or an instant) in time. 147

Balance sheet is a statement and not an account. It is
prepared at the end of an accounting period after the
trading a/c and p&L a/c have been prepared.
The purpose of preparing balance sheet :
1. To ascertain the nature and cost of assets of a
business.
2. To ascertain the nature and amount of liabilities of
a business.
3. To find out the solvency of a business. A business
is solvent if the assets exceed the external
liabilities. 148

 For example, the amounts reported on a balance
sheet dated December 31, 2015 reflect that instant
when all the transactions through December 31
have been recorded.
 We will begin our explanation of the accounting
balance sheet with its major components, elements,
or major categories:
 Assets
 Liabilities
 Owner's (Stockholders') Equity
That is
 Assets = Liabilities + Shareholders' Equity
149

 Assets
 Assets are things that the company owns. They are the
resources of the company that have been acquired through
transactions, and have future economic value that can be
measured and expressed in Rupees.
 Fixed :- land, building, goodwill
 Current :- cash in hand, cash in bank, closing stock, debtors.
 Liabilities
 Liabilities are the money that a company owes to outside
parties, from bills it has to pay to suppliers to interest on
bonds it has issued to creditors to rent, utilities and salaries.
 Current liabilities are those that are due within one year and
are listed in order of their due date. Long-term liabilities are
due at any point after one year.
150

 Stockholders' equity
 Stockholders' equity is the residual claim of the
owners in assets after all liabilities are paid.
 Owners' equity represents the leftover interest in
the assets of an entity after all liabilities are
covered, spread over the individual stockholders.
 When the owners of a business are stockholders,
this is referred to as stockholders' equity.
 To view the balance sheet in tally
 Goto gateway of tally > Balance sheet
151

Cntd..
Profit and Loss Account
 The Profit and Loss Account shows the profit or loss
of a business over a given period of time.
 The Profit and Loss account shows what net profit or
loss your business has made within an accounting
period after deducting all expenditure from income.
 A net profit is earned if total expenditure is less than
the sales and a net loss if it is greater.
 Companies are expected to keep their P&L
statements in certain formats. Typically the P&L
statement will show the revenues received by a
business and the costs involved in generating that
revenue. In simple terms:
 Revenues – costs = profit
152

Cntd..
 To view the profit and loss account in tally
 Goto gateway of tally > profit and loss account
 Click F1 Detailed to view the profit and loss account
in detailed
Statement of Cash Flows
 The Statement of Cash Flows is a financial statement
that provides an overview of the cash inflows and
outflows of the business during a certain period of
time.
 The statement of cash flows is created in order to
show a summary of the transactions that have
affected the cash holdings of the organization during
a certain period Or The movement of money into
and out of a business entity
153

Account book in Tally
Account book - a record in which commercial accounts are
recorded; "they got a order to examine our books“.
1. Cash book- The book in which all cash transactions (either
cash is received or paid) are primarily recorded according to
dates, is called 'Cash Book'.
 Daily cash receipts and cash payments are easily ascertained.
 Cash in hand at any time can easily be ascertained through
Cash Book balance.
 Any mistake in the book can be easily detected at the time of
verification of cash.
 Any defalcation of money can be detected while verifying
cash.
 Since cash is verified daily, Cash Book is always kept up-to-
date. 154

 To show cash book in tally
 Goto gateway of tally >Reports > Accounts Books
> cash book
2. Bank book
 A book kept by a depositor, in which an officer of a
bank enters the debits and credits of the depositor's
account with the bank.
 It is written by the bank but remains in the
depositor's possession.
 Money deposited is entered on the credit side and
withdrawn on the debit side.
155

 It is recorded on the date when it is actually
collected from the debtor's bank.
 It is recorded when it is paid by the bank to the
creditor.
 Its debit balance shows bank overdraft and credit
balance shows cash at bank.
 To show cash book in tally
 Goto gateway of tally >Reports > Accounts Books
> bank book
156

3. Purchase register
 Purchase day book is also called as purchase book or
purchase register. All the credit purchases are
recorded in purchase day book.
 The purchase day book is being written with the help
of the purchase vouchers. Please note that the cash
purchases are recorded in cash book only.
 To show Purchase register book in tally
 Goto gateway of tally > Display>accounts book >
purchase register
157

4. Sales Register
 Sales day book is called as sales register, sales book
or sales journal also.
 All the credit sales are recorded in sales day book.
 The sales day book is being written with the help of
the sales vouchers.
 The cash sales are recorded in cash book only in
receipt side.
 To show Sales register book in tally
 Goto gateway of tally> Display>accounts book >
Sales register
158

5. Journal register
 Journal is also called as journal book or journal
register.
 All vouchers other than cash vouchers, bank
vouchers, purchase vouchers, sales vouchers,
purchase return vouchers and sales return vouchers,
are recorded in journal register.
 To show Journal register book in tally
 Goto gateway of tally > Display>accounts book >
Journal register >Journal register

159

Fundamentals of Tally

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