St.

Angelo's
Accounting Package - Tally COMPUTER EDUCATION
Creating Global Careers

Basic concept of accounting

Accounting : It is an art of recording, cassifying and summarizing in significant manner and in terms of
money, transactions and events which are of financial character and interpreting the results thereof.
Business Transaction : A business transaction is "The movement of money and money's worth form
one person to another". Or exchange of values between two parties is also known as "Business
Transaction".

Purchase : A purchase means goods purchased by a businessman from suppliers.

Sales : Sales is goods sold by a businessman to his customers.
Purchase Return or Rejection in or Outward Invoice : Purchase retur means the return of the full or a
part of goods purchased by the businessman to his suppliers.
Sales Return or Rejection out or Inward Invoice : Sales return means the return of the full or a part of
the goods sold by the customer to the businessman.
Assets :Assets are the things and properties possessed bya businessman not for resale but for the use
in the business.

Liabilities : All the amounts payable by a business concern to outsiders are called liabilities.
Capital :: Capital is the amount invested for starting a business by a person.
Debtors: Debtor is the person who owes amounts to the businessman.
Creditor: Creditor is the person to whom amounts are owed by the businessman.
Debit:The receiving aspect of a transaction is called debit or Dr.
Credit: The giving aspect of atransaction is called credit or Cr.
Drawings : Drawings are the amounts withdrawn (taken back) by the businessman from his business for
his personal, private and domestic purpose. Drawings may be made in the form cash, goods and assets
of the business.

Receipts : It is a document issued by the receiver of cash to the giver of cash acknowledging the cash
received voucher.

Account: Account is a summarized record of all the transactions relating to every person, every thing or
property and every type of service.
Ledger : The book of final entry where accounts lie.
Journal entries : A daily record of transaction.
Trail Balance : It is a statement of all the edger account balances prepared at the end of particular
period to verify the accuracy of the entries made in books of accounts.
Profit : Excess of credit side over debit side.

Profit and loss account : It is prepared to ascertain actual profit or loss of the business.
Balance Sheet : To ascertain the financial position of the business. It is a statement of assets and
liabilities.
Accounting Package - Tally
St. Angelo's
COMPUTER EDUCATION
Creating Global Careers

Types of accounts
Personal account: Personal accounts are the accounts of persons, firms, concerns and institutions
which the businessmen deal.

Principles: Debit the receiver

Credit the giver

Real Account: These are the accounts of things, materials, assets & properties. It has physical
existence which can be seen & touch.

Ex. Cash, Sale, Purchase, Furniture, Investment etc.

Principles: Debit what comes in

Credit what goes out

Nominal account: Nominal account is the account of services received (expenses and Losses) and
services given (income and gain)
Ex. Salary, Rent, Wages, Stationery etc.
Principles: Debit all expense/losses
Credit all income/ gains

Tally is a complete business solution for any kind of Business Enterprise. It is a full fledged accounting
software.
Procedure for creating company in Tally
Double click on Tally icon on desktop. Alt+F3 Company info-Create company.
Accounts Only : To maintain only the financial accounts of the company. Inventory (stock) management
is not involved in it.

Account with Inventory : This is the default option, which allows maintaining both the financial account
of the company as well as the inventory of the company.
Select Company : We can choose the company which is already created. Shortcut key - F1.
Shut Company : It is used to close the company which is opened. Shortcut key - Alt+F1.
Alter : It is used to make alterations in the company creation like name, date, maintain etc.
Quit: Exits from Tally. 1. Click on quit button.

2. Esc. Esc, Esc and enter.

3. Ctrl+Q
 St. Angelo's
Accounting Package - Tally COMPUTER EDUCATION
Creating Global Careers

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 exita screen.

To indicate you do not want to accept a voucher or master.

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.

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)
Invoice mode (name of item, rate, quantity, and amount)
Gateway of tally-Accounts info-Group
Bank account Direct income

Bank Od account Indirect expense

Branch/division Indirect income
Capital account Duties and tax
Cash in hand Fixed asset
Current asset Investment
Current liability Loans and advance

Deposit Loan (liability)

Direct expenses Miscellaneous expenses
 St. Angelo's
Accounting Package - Tally COMPUTER EDUCATION
Creating Global Careers

Provisions Stock in hand

Retained earning Sundry debtor's

Reserves and surplus Sundry creditors
Purchase account Suspense
Sales account Unsecured account
Secured loan

Meaning:
Current asset : It is converted into cash with in a year. Ex. Bills receivable
Direct expenses: These are the expenses which are directly related to manufacturing of goods.
Ex. Wages, factory rent, heating, lighting etc
Indirect expense: These are the expenses which are indirectly related to manufacturing of goods.
Ex. Salary, rent, stationery, advertisement, printing
Depreciation : Decrease the value of the asset.
Sundry debtors :The person who is the receiver or customer
Sundry creditors : The person who gives or supplier.
Expenses Outstanding or Unpaid expenses or Expenses due :Expenditure incurred during current
year but the amount on which is not yet paid. (Added to the expenditure on the debit side and entered on
the liability side.)
Income received in advance or Income recelved but not earned
Income received during the current year but not earned or a part of which relates to the next year.
(Deducted form the concerned income on the credit side and entered on the liability side)
Prepaid advance or Expenses or Prepaid expenses
or a tofwhich
Expenditure paid during current year but not incurred expenditure relates to the next year is called
on the debit side and entered on the
expenditure prepaid. (Deducted form the concerned
assets side)
Income outstanding or income earned but not received or Income accrued
Income outstanding means income earned during the current year but the amount on which is not yet
erned income on the credit side and entered on the asset side)
received (added to the concerr
Gateway of Tally-Accounts info-ledger-create

Group Direct
Ledger Fright charges
expenses
Opening stock Stock in hand
Carriage inwards or Purchases Direct
Purchase expenses
Purchase account
Direct
Cartage and coolie
Purchase expenses
Purchase return account
Direct
Octroi
expenses
 St. Angelo's
Accounting Package - Tally COMPUTER EDUCATION

Direct Indirect
Manufacturing wages expenses
Sundry expenses
expenses

Indirect
Discount allowed
Direct expenses
Coal, gas, water expenses
Indirect
Carriage outwards or sales expenses
Direct
Oil and fuel
expenses
Indirect
Traveling expenses expenses
Factory rent, insurance, Direct
electricity, lighting and heating expenses Indirect
Advertisement
Sales Sales account expenses

Indirect
Indirect Bad debts
Salary expenses
expenses

Indirect
Indirect Repair renewals
Postage and telegrams expenses
expenses
Indirect
Indirect Motor expenses
Telephone charges expenses
expenses

Indirect Indirect
Depreciation on assets
Rent paid expenses expenses

Indirect
Indirect Interest on investment received
Rates and taxes income
expenses
Indirect
Indirect Interest on deposit received
Insurance income
expenses

Indirect
Indirect Interest on loans received
Audit fees income
expenses
Indirect Indirect
Commission received
Interest on bank loan income
expenses
Indirect
Indirect Discount received
Interest on loans paid income
expenses

Indirect Indirect
Rent received
Bank charges income
expenses
Indirect
Indirect Dividend received
Legal charges income
expenses
Indirect
Indirect Bad debts recovered
Printing and stationery expenses
income

Indirect
Profit by sale of assets income
Indirect
General expenses
expenses Indirect
Sundry income income
 St. Angelo's
Accounting Package - Tally COMPUTER EDUCATION
Creating Global Careers

Loan Land and building Fixed asset

Loan from others
Liabilities
Leasehold property Fixed asset
Loan
Bank loan Patents Fixed asset
Liabilities

Bank overdraft Bank OD Goodwill Fixed asset

Current Prepaid expenses Current asset

Bills payable Liabilities
Income outstanding Current assset
Sundry creditors
Sundry
creditors

Mortgage loans Secured loans

Current
Expense outstanding Liabilities

Current
Income received in advance
Liabilities

Current
Other liabilities
Liabilities

Capital Capital
account

Drawings Capital
account

Cash in hand Cash in hand

Cash at bank Bank account

Fixed deposit at bank Deposit

Investments Investments

Bills receivable Current asset

Sundry debtors Sundry

debtors

Closing stock Stock in hand

Stock of stationery Current asset

Loose tools Fixed asset

Fixtures and fittings Fixed asset

Furniture Fixed asset
Motor vehicles Fixed asset

Plant and machinery Fixed asset

 St. Angelo's
Accounting Package -Tally COMPUTER EDUCATION
Creating GlobalCareers

Trading account :Buying and selling of goods.

D Receiving aspect Giving aspect Cr

Direct expenses Amount Direct Income Amount

To Opening stock XXX By Sales XXX

To Purchases XXX By (-)Sales return XXX

To (-)purchase return XXX By Closing stock XXX

To Freight charges XXX

To Cartage and coolie XXX

Lorry hire XXX

To Manufacturing expenses XXX

To Wages XXX

To Factory rent, fuel power XXX

To Gross profit (transfer to profit XXX

and loss account)

To Profit and loss account: Actual profit and loss of the business
Indirect expenses or payments Amount Indirect income or receipts Amount

To Salary XXX By Gross profit XXX

To Postage and Telegram XXX By Interest on investment received XXX

To Telephone charges XXX By Interest on deposit received XXX

To Rent paid XXX Rv Interest on loans received XXX

To Rate and taxes XXX By Discount received XXX

To Insurance paid XXX B Discount received XXX

To Interest on bank loan XXX By Rent received XXX

To Bank charges XXX By Bad debts received XXX

To Printing and stationery XXX Bv Net loss XXX

To Discount allowed XXX

To Advertisement
 St. Angelo's
Accounting Package -Tally COMPUTER EDUCATION
Creating Global Careers

To Carriage outward (sales)

To Depreciation on assets
To General expenses

To Traveling
To Bad debts
To Net profit

Balance sheet: Actual financial position

Liabilities Amount Assets Amount

Bank loan XXX Cash in hand XXX

Bank overdraft XXX Cash at bank XXX

Bills payable XXX Fixed deposit at bank XXX

Sundry creditors XXX Investments XXX

Expenses outstanding XXX Bills receivable XXX

Capital XXX Sundry debtors XXX

(-)drawings XXX Closing stock XXX

Net profit XXX Stock of stationery XXX

Furniture XXX

Plant machinery XXX

Land and building XXX

Motor vehicles XXX

Prepaid expenses XXX

Income outstanding XXX

 St. Angelo's
Accounting Package - Tally COMPUTER EDUCATION
Creating Global Careers
ANI59 90013290CERTIFED cONPANY
F4 Contra Records funds transfer between cash and bank accounts.
Deposit into bank or Opened bank account Cr. Cash
Dr. Bank
Withdraw form bank Cr. Bank
Dr. Cash

F5 Payment: Record all bank and cash payments.

Paid or Give Dr.
Cr. Cash/bank (in case cheque)

F6 Receipt: Records all receipts into bank or cash accounts.

Received or Borrow or Take Cr

Dr. Cash/bank (in case cheque)

Journal: Records adjustments between ledger accounts.

F8 Sales: Records all sales.

Dr. Cash/party (incase of credit-party)
Cr. Sales

F9 Purchase: Records all purchase.

Cr. Cash/party (incase of credit-party)
Dr. Purchase