VIGNESH COMPUTER EDUCATION

Tally Prime Material

Computerized accounting software is essentially a digital assistant for your finances. It's a program
that automates and simplifies the tedious tasks involved in managing your accounts, like:

 Recording financial transactions: This includes things like

income, expenses, sales, purchases, and payroll. The software can automatically categorize
these transactions for you, making it easier to track your spending and income.
 Generating financial reports: You can easily create reports such as profit and loss
statements, balance sheets, and cash flow statements. This gives you valuable insights into
the financial health of your business.
 Paying bills and invoices: The software can make it easy to pay your bills and invoices
electronically, saving you time and effort.
 Managing payroll: The software can automate many of the tasks involved in payroll
processing, such as calculating taxes and deductions, and generating paychecks.
 Tracking inventory: Some accounting software programs also include features for tracking
inventory, which can help you keep track of your stock levels and avoid running out of
essential items.

Benefits of using computerized accounting software:

 Saves time: Automating tasks frees you up to focus on more important things.
 Improves accuracy: The software reduces the risk of errors in your financial records.
 Makes it easier to track spending: You can easily see where your money is going and make
informed financial decisions.
 Provides valuable insights: The financial reports generated by the software can help you
identify trends and make better business decisions.
 Reduces stress: Knowing that your finances are in order can give you peace of mind.

Some popular examples of computerized accounting software include:

 Tally
 Busy
 Saral
 Profit books
 Marg
 QuickBooks
 Xero
 FreshBooks
 Zoho Books
 Sage Business Cloud Accounting

Page 1 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Difference between manual accounting and computerised accounting

Manual accounting Computerized accounting

Transactions/Event Transactions/event

Journal Entries (Day Book) Ledger Create

REGULAR
PROCESS
Ledger Open Voucher Entry (Day Book)

Ledger Posting Automatically posting

Trail balance preparation,

Trail Balance Balance Sheet, Profit & Loss A/c

Done. Without effort

YEAR END
Final a/c PROCESS

(B.S.,P&L)

Page 2 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
What is Tally?

Whenever we hear the name Tally, the very first thought that comes to our mind is accounting
software, because it’s the no. 1 accounting software in India that captured almost 90% of the market
share.

Tally ERP 9 is the most famous and successful version of Tally. But in 2020, Tally release its new
version as Tally Prime.

What is the use of Tally Software?

If you are a business owner, then you have a need to manage your business accounting and here
Tally comes into the picture. Tally is accounting software, which is used to manage business
accounting.

It’s an accounting software, that is capable of doing Barcode Integration, Email Integration,
Management, Inventory Management, VAT / CST / GST Reports, Service Tax, TDS / TCS and much
more. It is accepted by almost all types of Industries.

After the implementation of GST (Goods And Service Tax) in India, Tally incorporates it as fast as it
launches. It helps Tally to increase its customer base more rapidly.

How many countries are using Tally Software?

Tally is a simple, sweet, and successful business accounting software. As of now, it is accepted by
more than 140 countries across the globe. Here is the list of a few well-known names:

India, Pakistan, Bangladesh, Nepal, Sri Lanka,

Kuwait, Iraq, Syria, Qatar, Saudi Arabia, Oman, UAE, Yemen,

UK, Mauritius, Singapore, Malaysia, Indonesia, Philippines

Kenya, Libya, Nigeria, Morocco, Zambia, Zimbabwe, Algeria, Austria, Bahrain, Botswana, Comoros,
Djibouti, Egypt, Ghana, Jordan, Lebanon, Mozambique, Somalia, Sudan, Tanzania, Tunisia, etc.

What is Tally ERP 9?

Tally ERP 9 is the most successful version of Tally. It’s easy to understand and helps to manage the
business efficiently.

Because of Tally ERP 9 flexibility to integrate with other business applications, at a point in time, it’s
become the most adopted accounting software by all industries. After launching Tally Prime, the
customer base is shifting towards Tally Prime.

What is Tally Prime?

Tally Prime is the latest and successor of its previous version Tally ERP 9 in which Tally introduced a
completely new user experience with a fresh new look. It’s a whole new software equipped with a
lot of additional features.

Page 3 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Tally Prime is known for its Simplicity, High-speed Processing, Flexibility and Reliability.

What is "ERP 9 " in Tally ERP 9?

In Tally ERP 9, ERP stands for Enterprise Resource Planning. ERP is a software used to manage the
complete business from accounting to inventory to payroll etc.

Basically, Tally software was specially designed for accounting needs, but these days it can do a lot
more than accounting like an ERP.

One of the additional functions is managing records of employees of a business group. Generally,
this task is managed by ERP’s, but now this is also managed by Tally itself. Due to these kinds of ERP
features, Tally 9 is named Tally ERP 9.

History of Tally

We all heard the name Tally from our childhood. It’s a Business Accounting Software, which was first
introduced in 1986.

It’s was designed by a Bangalore based multinational company Tally Solutions Pvt. Ltd. It’s a private
company that used to deal with ERP software at that time.

Tally was Developed by Shyam Sunder Goenka and Bharat Goenka.

History of Tally Solution

It’s basically accounting software used by both small and large companies. Tally has made complex
business calculations easier. Tally has not only made business accounting easier as well as time-
saving.

It comes with different kinds of packages so that, a person can choose from one of them according
to their needs. It offers various types of packages from the Education version for students to the
Auditor version, which is specially designed for Chartered Accountants.

Feature of Tally Software

Tally Enterprise Resource Planning 9 or ERP 9 was an updated version of Tally 9 and Now we have
Tally Prime as the latest version. It has all the Tally ERP 9 features with additional few extra features.
Here are the main features of Tally:

1. Remote Access

Some business has multiple branches based on multiple locations. Operating from such
geographically segregated locations becomes a challenge for such businesses. But Tally Remote
Access feature made a bridge between them and help to manage their business seamlessly. It helps
to make working from different geographical locations pretty simple.

Page 4 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
You just need a valid Tally.Net subscription to work from multiple locations.

First, you need to create a User ID and Password for Tally.net. When you are done with this, you can
share this User ID and Password with your other branch’s office, and they can work from their
respective locations.

2. Tally.NET

It’s a secured channel developed by Tally Solutions for sharing business data.

This secured channel uses end-to-end encryption, which makes it so secure that even employees of
Tally Solutions cannot see and use your data, only the sender and receiver user can see the data.

So, it’s basically a safe medium to share and work on your business from multi locations.

3. Control Center

As we have already discussed about creating User IDs and Passwords for Remote Access, the control
center is the place from where you can control your account.

You can see all the connected users to a particular account and manage them. You can control their
security and the sharing of data with this feature.

4. Multiple Selection

It’s already a simple software to use but multiple selection features make it more simple and easy.

With this feature, the user can select multiple entries at once to cross-check them. By pressing the
space bar on the keyboard, one can select multiple entries at once.

5. Auditors Edition

This made Chartered Accountants [CA] happy.

Actually, it’s not a feature, it’s a totally different edition of Tally, which is specially designed keeping
CA’s needs in mind. Auditor edition is only available for Chartered Accountants.

This edition has a Tax Audit and Statutory Compliance tool. With the help of Tally.Net, a CA can look
at his client’s work from his own office and do the required changes he wants to make.

Tax Audit can be done by including FORM 3CD without any issues.

6. Ledgers

Cash and Profit – Loss Account are the two by default ledgers present in Tally.

Ledgers are nothing but the overall record of the transaction of a particular account. We can
ourselves create a Ledger depending on the account. Just naming the ledger is important.

Page 5 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Tally Versions list

Whenever a software is developed and released for the very first time, developers try to deliver the
best and most stable version of their application.

But later on, they fixed some bugs along with the addition of more new functionality as per the
demand. It’s an on-going process, so they always release updated versions from time to time.

Tally has released many versions since 1986. The latest version of Tally was released in Nov 2020 and
it’s known as Tally Prime.

The details from the very first Tally 3.0 to the latest Tally Prime are shared in the form of an
infographic shown below.

Tally Versions Features

3.0 These are used to the operation by “DOS” based only. i.e. character user
3.5 interface(CUI) and maintaining business.
4.0 Features:- Accounts Only
4.5 Eg:- Voucher Mode (Bill)
5.4 It is used to operating by “WINDOWS” based only. i.e. Graphical User
Interface(GUI) and maintaining business.
Features:- Accounts with Inventory
Eg:- Invoice Mode (Bill)
6.3 It is used to operating “open Database Connectivity Server” (ODBC)
Tally Versions

Features:- Operating the server

Eg:- A Tally report is export into another application like Tally to MS-Excel
7.2 It is used to calculate “Taxation (VAT, CST, TDS etc.,)”
Features:- Tax Calculation
Eg:- Calculation of VAT, CST, TDS, etc.,
8.1 It is used into the 15 languages.
Feature:- operating the language
Eg:- we can operate tally inTelugu, Hindi, etc.,
9.0 It is used to the payroll (salary reports)
Features:- preparation of payslip
Eg:-preparation of employee payslip
ERP 9.0 Tally ERP 9.0 is used to the “REMOTE USERS”
ERP Stands for Enterprises Resource Planning
Feature:- Online Transitions
Eg:- we can operate tally in online like Gmail, yahoo mail…
Prime Full GST Ready Version

e-invoice

Tally Products

Most of us think that Tally Solutions has Tally only as a product to offer. But today here you will get
to know about some more products which are also offered by Tally Solutions. These are the related
products to Tally itself.

Page 6 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
So here they are:

1. TALLY PRIME
2. TALLY AUDITOR EDITION
3. TALLY PRIME SERVER
4. TALLY SHOPER 9
5. TALLY PRIME DEVELOPER

Let’s start with the most popular question, asks about Tally.

Is Tally Fee?

The answer is both, Yes and No. Let me explain, Tally offers a one-month trial period absolutely free,
So it’s free for a month. But, if you want to use it for more than 1 month then you have to purchase
it.

Types of Tally Subscription

On a broader level, we can say, Tally has only two types of editions. One is the Silver edition and the
other one is the Gold edition. Silver is known as Single User Tally and Gold is known as Multi-User
Tally.

But if we go deeper, then you will also find one more edition, known as Auditor Edition. Auditor
Edition is a CA only edition. It helps CA in Auditing any business.

Page 7 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Download and Install TallyPrime

Downloading the application setup from the Tally Solutions website is the first step in starting Tally
Prime. Once you download Tally Prime setup files, you can install the application on your computer.
Installation steps remain the same regardless of the Tally Prime edition you have purchased.

You can install Tally Prime on any computer with 64-bit edition of Microsoft Windows 7 or later.

Download the setup files.

 Go to https://tallysolutions.com/download/.
 Click Download.
 Select the folder where you want to save the setup.exe file.
 Click Save.

Install TallyPrime.

 Double-click setup.exe.
 Click on Install
 Configure Application Path, if needed.
By default, the application will be installed
at C:\Program Files\TallyPrime.

o Click Configure.
o Double-click Application Path.
o Click … and change the path as needed.

Note: If you are already using Tally.ERP 9,

then it is recommended that you install
TallyPrime in a different folder. This will allow
you to use both the products simultaneously,
if needed.

o Close the List of

Configurations window.
 Click Install.
The application gets installed, and the
following window opens.

 Click Start Tally

Prime to launch Tally Prime.
How to Start Tally Prime for New Users – Activate License

Page 8 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
If you have purchased a single user Silver License, then you can activate the license on one
computer. However, if you have a multiuser Gold License, then you need to activate the license on
one computer on the LAN. Thereafter, you can configure all other installations using the same
license.

Activate New License

1. Start your Tally Prime. The Welcome to Tally Prime screen appears.

2. Click Activate New License.

3. If you have a Single-Site license, then enter your Serial Number, Activation Key,
and Administrator e-mail ID.
However, if you have a Multi-Site license, then refer to Multi-Site Licensing in Tally Prime for
further details.

Note: The e-mail ID provided here will be linked to your account, and used for all future
communication and licensing activities.

1. Press Enter to proceed. The Unlock License screen appears.

2. Enter the Unlock Key sent to your e-mail ID.

Note: If you have not received the unlock key, then press F2 (Get Unlock Key).

Page 9 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
3. Press Enter to unlock your license.
Once your license is unlocked, the following message appears.

Once you activate the license, then you can create your first Company and start using Tally Prime for
business transactions.

Depending on the size and scale of your business, you can have different setups. You can refer
to Licensing in Tally Prime to know more about the different options available.

How to start TallyPrime in Educational version | Try it for free

If you want to try Tally Prime before you buy, or just want to learn how to use the product, then you
can use the Educational version for free. In this case, you can try all features in the product.
However, there will be one restriction. The voucher dates in the Educational version are limited to 1,
2 and 31.

1. Start your Tally Prime. The Welcome to Tally Prime screen appears.
2. Click Try It For Free.

You can start using Tally Prime in Educational mode. Once you do that, you will observe that the
window title is in dark green colour and shows EDU under the product name.

Page 10 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Start Using Tally Prime for Your Business Transactions
Once you have activated your Tally Prime license, and if you are a new user, then you need to create
a Company. Thereafter, you can start using Tally Prime to record your business transactions.

Create Company
1. Create>Company.
Alternatively, Gateway of Tally>Create Company.
2. Enter the Company Name, Mailing Name, and Address.
While Company Name is for reference in the application, Mailing Name will be printed in all
reports.
3. Select the State and Country.
Based on the country selected, the statutory options will vary.
4. Verify the Financial year beginning from and Books beginning from dates.
5. Set security details, if needed.
6. Verify the Base Currency details.

7. Accept the Company screen.

Thereafter, a confirmation screen appears with the list of features that you can enable.

Page 11 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
8. Set up the features as needed. You can do this later too.
Load the company

Once you have created a company, you can load the company in one of the following ways:

Select the company

 Open Tally Prime > Alt+F3 (Select Company) > and select the company from the List of
Companies.
 If you have created more than one company, you can browse to the data path and
select the required company to open.

Load company on startup

If you wish to load one or more companies by default, whenever you open Tally Prime, you can
configure the same.

1. Open the Startup Settings screen: Press F1 (Help) > Settings > Startup.
2. Set the option Load companies on startup to Yes, and press Enter on Companies to load.

3. In the List of Companies to Load on Startup screen, select one or more companies, based on
your need.

Page 12 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
4. Select End of List, after your have selected the companies to be loaded on startup.

The companies that you select here will be loaded by default next time you open Tally Prime.

Update Company Details | Alter Company

If your company address, phone number, or any other contact information was not provided earlier
or has changed, you can update such details in Tally Prime Any changes made to these details will be
reflected accordingly in your reports and printed invoices.

1. Press Alt+K (Company) > Alter.

2. In the Company Alteration screen, make the necessary changes.

3. Accept the screen. As always, you can press Ctrl+A to save.

Delete a Company

This option allows you to delete an existing company.

To delete a company, you have to load the company first.

1. Select ALT+K (or) Company in Menu Bar from the Gateway of Tally to proceed to the
Company Information menu.
2. Select Alter .
3. Select the company to be deleted. The Company Alteration screen is displayed.
4. Use Alt + D to delete. Tally Prime will prompt for a confirmation on deleting the company.
5. Press Enter to delete the company.

Note: Deletion of a company is irreversible. The company is permanently

deleted from the system.

Page 13 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
TallyPrime is an accounting software that is widely used for financial management and accounting
purposes. In TallyPrime, creating, altering, and managing accounts is fundamental to the overall
accounting process. Here's the purpose of these actions:

Create Accounts:

 Purpose: Creating accounts in TallyPrime is essential for recording financial transactions.

Accounts represent various elements such as assets, liabilities, income, and expenses.
 Use: You create accounts to organize and classify financial data accurately. This helps in
maintaining a systematic and organized record of transactions.

Alter Accounts:

 Purpose: The need to alter accounts arises when there are changes in the business structure,
account details, or any other relevant information.
 Use: Altering accounts allows you to update and modify account details without creating
new accounts. This is crucial for maintaining accurate and up-to-date financial records.

Chat of Account:

 Purpose: The Chart of Accounts (COA) is a comprehensive list of all the accounts used in the
financial transactions of a business.
 Use: The COA provides a standardized structure for organizing accounts, making it easier to
categorize and report financial information. It serves as a blueprint for the financial system,
ensuring consistency and clarity.

Groups In Tally Prime

Groups are collection of Ledgers of the same nature. Account Groups are maintained to determine
the hierarchy of Ledger Accounts which is helpful in determining and presenting meaningful and
compliant reports.

Default Groups

In Tally Prime, there are a number of default Groups that can be used for various accounts.

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.

Page 14 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material

Capital Account

This records the Capital and Reserves of the company. The ledgers that belong to Capital Accounts
are Share Capital, Partners' Capital A/c, Proprietor's Capital Account and so on.

Reserves and Surplus [Retained Earnings]

This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so
on.

Current Assets

Current Assets record the assets that do not belong either to Bank Accounts or to Cash-in-Hand sub-
groups.

 Bank Accounts : Current account, savings account, short term deposit accounts and so on.
 Cash-in hand : Tally Prime automatically creates Cash A/c in this group. You can open more
than one cash account, if necessary.

Page 15 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Note : An account under Cash-in-hand group or Bank Accounts/Bank OCC
A/c group is printed as a separate Cash Book in the traditional Cash Book format
and does not form part of the Ledger.

 Deposits (Asset) : Deposits contain Fixed Deposits, Security Deposits or any deposit made by
the company (not received by the company, which is a liability).
 Loans & Advances (Asset) : This records all loans given by the company and advances of a
non-trading nature (example: advance against salaries) or even for purchase of Fixed Assets.
We do not recommend you to open Advances to Suppliers’ account under this Group. For
further details, please refer to the section on Common Errors.
 Stock-in-hand : This group contains accounts like Raw Materials, Work-in-Progress and
Finished Goods. The balance control depends on whether you have selected Integrated
Account-cum-Inventory option while creating the company. (refer to Company creation
section for more details) Let us consider these options:
 Sundry Debtors : For customer accounts refer to common and possible errors in grouping of
accounts section.

Current Liabilities

Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be created
directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and
Sundry Creditors

 Duties and Taxes : Duties and Taxes contain all tax accounts like VAT, CENVAT, Excise, Sales
and other trade taxes and the total liability (or asset in case of advances paid) and the break-
up of individual items.
 Provisions : Accounts like Provision for Taxation, Provision for Depreciation and so on are
recorded under Provisions.
 Sundry Creditors : For trade creditors, refer to common and possible errors in grouping of
accounts section.

Investments

Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank
deposit accounts and so on. This allows you to view the total investments made by the company.

Loans (Liability)

Loans that a company has borrowed, typically long-terms loans.

 Bank OD Accounts [Bank OCC Accounts] : Tally Prime provides you with distinct types of
Bank Accounts,
 Bank OCC A/c : To record the company's overdraft accounts with banks. For example, Bill
Discounted A/c’s and Hypothecation A/c’s etc.

Note: An account under Bank OCC A/c group is printed as a separate Cash Book in
he traditional Cash Book format and does not form part of the Ledger.

Page 16 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
 Secured Loans : Term loans or other long/medium term loans, which are obtained against
security of some asset. does not verify the existence of the security. Typical accounts are
Debentures, Term Loans, and so on.
 Unsecured Loans : Loans obtained without any security. Example: Loans from
Directors/partners or outside parties.

Suspense Account

In modern accounting, many large corporations use a Suspense Ledger to track the money paid or
recovered, the nature of which is not yet known. The most common example is money paid for
Traveling Advance whose details will be known only upon submission of the Travelling Allowance
bill. Some companies may prefer to open such accounts under Suspense Account.

Miscellaneous Expenses (Asset)

This group is typically used for legal disclosure requirements such as Schedule VI of the Indian
Companies Act. It should hold incorporation and pre-operative expenses. Companies would write off
a permissible portion of the account every year. A balance remains to an extent that cannot be
written off in Profit & Loss Account. Tally Prime does not show loss, carried forward in the Profit &
Loss Account, under this group. The Profit & Loss Account balance is displayed separately in the
Balance Sheet.

Branch/Divisions

This maintains ledger accounts of all your company's branches, divisions, affiliates, sister concerns,
subsidiaries and so on. Tally Prime permits Sales and Purchase transactions to take place with
accounts opened here. Remember, these are their accounts in your books and not their books of
accounts. Just treat them as any other party account. If you wish to maintain the books of a
branch/division on your computer, you must open a separate company. (Tally Prime allows
maintenance of multiple company accounts).

Sales Account

You can classify your sales accounts based on Tax slabs or type of sales. This also becomes a simple
mechanism for preparation of Tax returns.

For example,
● Domestic Sales
● Export Sales

Now under Domestic Sales open the following ledgers:

● Sales (10%)
● Sales (5%)
● Sales (exempt)
You can even open an account as Sales Returns under the group Domestic Sales to view your net
sales after returns (or the returns may be directly passed through Journal against the specific Sales
account).

Page 17 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Note: Do not create customer accounts under this group. For more details, refer to
common and possible errors in grouping of accounts section.
Purchase Account

This is similar to sales accounts, except for the type of transactions.

Direct Income [Income Direct]

These are Non-trade income accounts that affect Gross Profit. All trade income accounts fall under
Sales Accounts. You may also use this group for accounts like Servicing, Contract Charges that follow
sales of equipment.

For a professional services company, you may not use Sales Account group at all. Instead, open
accounts like Professional Fees under this group.

Indirect Income [Income Indirect]

These are miscellaneous non-sale income accounts. Example: Rent Received and Interest Received.

Direct Expenses [Expenses Direct]

These are Manufacturing or direct trading expenses. These accounts determine the Gross Profit of
the company.

Indirect Expenses [Expenses Indirect]

All administrative, selling or non-direct expenses.

Profit & Loss Account is a reserved primary account in Tally Prime. You can use this account to pass
adjustment entries through journal vouchers. For example, transfer of profit or loss account to
Capital or Reserve account.

Common and Possible Errors in Grouping and Account Classification

Opening two accounts of the same party

Therefore, you need not open two accounts for the same party - one under Sundry Debtors and
another under Sundry Creditors. Tally Prime restricts opening of two identical ledger accounts. In
such cases, you may decide to circumvent by marking one account as "A & Co - S/Dr" and another "A
& Co - S/Cr". This will allow you to have two accounts of the same party under two groups, but you
will lose the advantage of analyzing net position at a single instance. It is always better to maintain a
single account to obtain best benefits.

Page 18 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Ledgers

A ledger is the actual account head to identify your transactions and are used in all accounting
vouchers. For example, purchase, payments, sales, receipts, and others accounts heads are ledger
accounts. Without a ledger, you cannot record any transaction.

All ledgers have to be classified into groups. These groups and ledgers are classified into profit and
loss or balance sheet.

There are two pre-defined ledgers in Tally.Prime:

 Cash
 Profit and loss account

Cash Ledger Profit and Loss Ledger

The cash ledger is grouped under cash-in- The profit and loss account ledger is grouped
hand. under primary.
You can enter the opening balance as on The previous year's profit or loss is entered as
the day the books begin. opening balance of the ledger. The balance
entered is the opening profit/loss. It is shown in
the balance sheet as opening of the profit and
loss account in the liabilities.
This ledger can be altered and deleted. This ledger can not be deleted but it can be
modified.

Group Name Example Ledger

Capital Accounts Share capital, Joes capital
Loan Liabilities Bank loan, loan received from any party
Current Liabilities Payables, outstanding amounts
Current Assets Receivables, Prepaid amounts
Fixed Assets Machinery, Factory, Land & buildings
Investments Investing on shares, any investment names
Sales Accounts Credit sales, sales returns
Purchase Accounts Credit purchase, purchase returns
Suspense Account Suspense ledger
Direct Expenses Wages, Import duty, all purchase & manufacturing expenses
Indirect Expenses Office expenses, selling expenses & financial expenses
Misc.Expenses Development expenses, advertisement expenses,
Direct Income Income earned from the sale of goods and services
Indirect Income Earned by way of Non-business activities (Interest received, discounts)
Branch / Division This maintains ledger accounts of all your company's branches,
divisions, affiliates, sister concerns, subsidiaries and so on.

Group Name Example Ledger

Sundry Creditors Purchase party name or supplier name
Sundry Debtors Sales party name or customer name
Provision Provision for doubtful debts, Provision for tax
Cash in hand Liquid cash in company

Page 19 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Duties & Taxes Service tax, CGST, IGST,SGST
Deposit(asset) Fixed deposits
Bank Accounts Indian bank, SBI bank (any bank name)
Loans & Advance Salary advance, loans to partner
(Assets)
Bank OD & OCC Account Bank OD, bank OCC
Secured Loans Car loan, Home loan
Unsecured Loans Credit cards, student loan
Stock in hand Opening stock, closing stock
Reserves & Surplus General Reserves , Capital Reserves (Funds set aside to pay future
obligations )

Group Ledger
Capital Account Who are invest investment in business, those
people all are come this group
Bank accounts All business (Current accounts), saving a/c (SB)
are comes under this group
Purchase Account Local purchase
Interstate purchase
Import purchase
Purchase 5% GST
Sales account Local sales
Interstate sales
Export sales
sales 5% GST
Stock-in-hand Opening stock
Closing stock
Loans (liability) Different bank OD’s
Sbi gold loan
Axis housing loan
Loans from Friend’s & relatives
Loan & advances (asset) Loans to staff
Loans to other (friends & relatives)
Fixed assets Buildings
Machinery
Computer
Car/van/auto
Good will
Trade marks
Investments Shares
Mutual funds
Saving certificates
Invest in other business
Duties & taxes VAT
Service Tax
Excise duty
GST
CGST
SGST

Page 20 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
IGST
Sundry creditors All goods suppliers accounts
Sundry debtors All customers’ accounts
Deposit Telephone deposit
City cable deposit
Mineral water can deposit
Rent deposit
Direct expenses Wages
(trade expenses) Godown rent
Transport
Indirect expenses Shop rent
(office expenses) Salaries
Advertisement
Stationary
Cell bills / phone bills
Power bill
Travelling expenses
Transport on sales
Depreciations
Interest paid
Commission paid
Direct income Scrape sales
Insurance recovery
Indirect income Commission received
Interest received
Discount received
Rent received
Income on shares
Income investments

Ledger Creation Procedure

Step 1: Gateway of Tally->Create

Page 21 of 60
VIGNESH COMPUTER EDUCATION
Tally Prime Material

Page 22 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Step 2: Gateway of Tally->Create->Ledger

Step 3: Gateway of Tally->Create->Ledger->Ledger Creation

Page 23 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
What is trial balance?

Trial Balance is a statement summarizing the closing balance of all the ledger accounts, prepared
with the view to verify the arithmetical accuracy of ledger posting. In Trial balance, all the ledger
balances are posted either on the debit side or credit side of the statement.

The total of debit balance in trial balance should match with a total of credit balance, only then it is
said to be arithmetically accurate. Trial balance is a primary source for preparing various financial
statements such as Trading and Profit & Loss account, Balance sheet etc.

Trial balance objective

As the name suggests, it’s a statement prepared to ensure that journal and ledger postings are done
correctly so that closing balances can be considered for preparing the final accounts and other
financial statements. Trial Balance acts as a pre-check before preparing the other financial
statements. The following are some of the important objectives of trial balance.

To ascertain the arithmetical accuracy of ledger accounts:

As a summary of all the ledger accounts closing balance, trial balance helps in determining the
accuracy of journal and ledger posting. The trial balance is assumed to be accurate only when the
total debit is equal to the credit.

Helps to locate errors

If there any difference in the trial balance, it signals that journal or ledger posting is not carried out
efficiently. It clearly implies that there are errors and it is high time for accountants to find and
correct it. The error may have occurred at any of the following stages of accounting.

 Posting journal entries to the ledger account

 Totalling of subsidiary books
 Calculation errors
 Posting of Balance from Ledger account to trial balance
 Error in totalling Trial balance and so on ...

Helps to prepare financial statement

Trial balance is a bridge between accounting records and financial statements. Trial balance is the
steppingstone for preparing all the financial statements such as Trading and Profit & loss account,
balance sheet etc. Using the trial balance, all the income and expenses related ledger accounts are
compiled to create Profit and loss account and rest are used for preparing a balance sheet.

Features of trial balance

 It is a summary of debit and credit balances which are extracted from various ledger
accounts
 It is a summary of debit and credit balances
 The motive behind the preparation of Trial balance is to establish arithmetical accuracy of
the transactions recorded in the Books of Accounts

Page 24 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
 Trial balance does not prove any arithmetical accuracy of accounts which can only be
determined by the audit
 It is not an account. It is only a statement of account
 It is not a part of the final statements
 A Trial balance at the end of the accounting year but it can also be prepared anytime as and
when required like weekly, monthly, quarterly or half-yearly
 It acts as a bridge between books of accounts and the Profit and Loss Account and Balance
sheet

How to prepare a trial balance?

Preparing trial balance is one of the first steps towards preparing final accounts and other financial
statements. Following are the steps to prepare trial balance:

 Preparing ledger accounts to determine the closing balance of each account.

 Post the ledger Accounts into trial balance and place the balance in the debit or credit
column.
 All the assets and expenses should have debit balance while liabilities and income should
have a credit balance.
 Calculate the total of the debit balance
 Similarly, compute the total of the credit column
 Finally, the sum of debit balance should match the sum of credit balance.
 If there is any difference, the process of error rectification should be started. Errors could be
of commission errors, errors of principle, compensating error and so on…

Example Trial Balance Sum

Prepare a Trial Balance of ABC PVT LTD for the following financial year of 1.4.2022 to 31.3.2023

S.No Particulars Debit Credit

1 Capital 22000
2 Stock 10000
3 Debtors 8000
4 Creditors 12000
5 Machinery 20000
6 Cash in hand 2000
7 Bank OD 14000
8 Sales 44000
9 Misc.Exp 12000
10 Sales Return 8000
11 Purchase 26000
12 Wages 10000
13 Salary 12000
14 Prepaid Insurance 200
15 Purchase Return 4000
16 Bills Payable 10800
17 Outstanding Salary 1400

Page 25 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
108200 108200

How to Start Trial Balance

Step 1: Gateway of Tally->Create

Page 26 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Step 2: Gateway of Tally->Create->Ledger

Step 3: Gateway of Tally->Create->Ledger->Ledger Creation

Page 27 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Note:

 Cash and Profit&Loss are default ledger in Tally.

 To use the default ledger press pageup button

Page 28 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Reports
Gateway of Tally->Chart of Accounts

Gateway of Tally->Chart of Accounts->Ledger

Page 29 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Gateway of Tally->Chart of Accounts->Ledger-Ledger View

Gateway of Tally->Chart of Accounts->Ledger->Ledger View->Finally View Trial Balance

Page 30 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
What is Voucher?

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.

Voucher Types in TallyPrime

A total of 24 vouchers are created in Tally Prime as pre-defined. According to the voucher type, 24
vouchers can be classified as this way.

 Accounting Vouchers
 Inventory Vouchers
 Payroll Vouchers
 Non-Accounting Vouchers

For example, for cash payments and bank payments, the predefined voucher type is Payment
Voucher. You can also have two or more sales voucher types in TallyPrime for different kinds of sales
transactions. For example, credit sales, cash sales, and so on

You can create more voucher types under these pre-defined voucher types
as per your business needs.

The voucher entry menus options are available under Transactions in the Gateway of Tally .
The Payroll and Order Vouchers are available as separate options which can be enabled based on the
requirements.

The Payroll Vouchers can be enabled from F1: Accounting Features , whereas the Order
Vouchers can be activated from F2: Inventory Features .

Note: If the company is maintained with Accounts Only Company, Inventory

Vouchers option will not be displayed under Transactions.

LIST OF ACCOUNTING VOUCHERS

1. Payment
2. Receipt
3. Contra
4. Purchase
5. Sales
6. Debit Note
7. Credit Note
8. Journal

LIST OF INVENTORY VOUCHERS

1. Delivery Note
2. Job work in order
3. Job work out order

Page 31 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
4. Material In
5. Material Out
6. Physical Stock
7. Purchase Order
8. Receipt Note
9. Rejections In
10. Rejections Out
11. Sales Order
12. Stock Journal

List of Payroll Vouchers

1. Attendance
2. Payroll

Non – Accounting Vouchers

1. Memorandum
2. Reversing Journal

ACCOUNTING VOUCHERS

CASH/CHEQUE/ONLINE PAYMENT PAYMENT

CASH
CASH/CHEQUE/ONLINE RECEIPT RECEIPT

PURCHASE PURCHASE
PURCHASE/SALES
CREDIT BASE SALES SALES
TRADING PUR. RETURNS DEBIT NOTE
RETURNS
SALES RETURNS CREDIT NOTE

BANKING Bank Deposits/with draws CONTRA

ADJUSTMENTS Not Related to above vouchers JOURNAL

1. PAYMENT:

Press F5 key to open this voucher. Transactions related to company payments should be recorded in
this voucher. The payment made by the company may be through cash, cheque, online payment or
any other mode. If the company makes a payment it should be entered in this voucher.

2. RECIEPT:

If the F6 key pressed, this voucher will open. If the company gets the money, that transactions
should be recorded in this voucher. The amount that came to the company could be in the form of

Page 32 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
cash. Be it in cheque form or online. If the company gets the money, it should be registered in this
voucher.

3. CONTRA:

Press the F4 key to open this voucher. This contra voucher should be recorded when the company
deposits or withdraws money from its bank account. Also, if the amount is transferred from bank to
bank or transferred cash to cash , then the entry should be made in this voucher.

4. PURCHASE:

The key to opening the purchase voucher is F9. If the company makes the purchases, the
transactions related to them should be recorded in this. The purchase made by the company may be
for borrowed or cash. Also, the purchase made by the company may be in the form of goods or
service form. If the company purchases, it should be recorded in this voucher.

5. SALES:

Sales Voucher is open if F8 key is pressed. Transactions related to sales are recorded in this voucher.
If the company is selling for cash or on credit, it should be recorded in this sales voucher. The sales
made the company may be in the form of goods or service. In all, transactions related to company
sales should be recorded in this voucher.

6. DEBIT NOTE:

This voucher is opened, if the ALT + F5 key is pressed. If the company returns the purchase
commodity for any reason, it should be recorded in this voucher. We can also record interest
calculations in this voucher.

7. CREDIT NOTE:

ALT + F6 is the key for credit note voucher. If the company has returns of the goods sold for any
reason, it should be recorded in this voucher. Transactions related to sales returns come into this
voucher. Moreover, interest calculations also be recorded in this.

8. JOURNAL:

F7 is the key to open Journal voucher. Entries related to adjustment methods are recorded in this.
Also, this voucher is used for tax calculations and tax adjustment entries.

Page 33 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Payment and receipts are the primary activities of every business.

What is Payment?

Business makes payments for purchasing raw materials, capital goods , goods for selling , office
supplies and getting services like electricity, telephone bills, repayments like loan , payment of
salary , wages etc. Payment is exist everywhere in day today business activities. when making a
payment the accounting department should record the out flow money. This may by means of
cheque or cash. In tally prime making payment and printing payment voucher is made simple.

Classification of Payment Transactions

Business dealt with many types of engagements which involve cash and bank called
transactions. Transactions are defined as buying and selling of goods and services for a
consideration. Every transaction requires payments. Sometimes we may pay through cash or bank.

Cash Payment

Cash payments are the transactions that settle through cash. Payments are made by cashier through
immediate cash.

Some examples of cash payments entries are

1. Stationery purchased for Rs 500.00 (Paid by main cashier)

2. Courier charges paid Rs 20.00 ( Paid by petty cashier)
3. Tea expense Rs 10.00 ( Paid by petty cashier)

Bank Payment

These are transactions that settle through bank or by way of issuing of cheques , or by way
of electronic fund transfers like NEFT, IMPS, RTGS, UPI etc. Normally big transactions are settling
through cheque. However there is no rule regarding this, you are free to issue cheques of any
amount. This depends on the policy of your company.
Some of the examples of bank payments is.
1. Cheque issued to Ambuja cements for Rs 150000.00 vide Cheque # 456245, SBI A/c # 651
2. Rs 150000 paid to William’s Mesh LTD towards the settlement of bill NO 896 through NEFT.
ref no UTRNO1234566
How to enter payment voucher?

To enter payment transaction of a company tally has a separate voucher type called payment
voucher. To access this payment voucher.
1. Go to Gateway of Tally>> Voucher
2. Now click on F5: Payment Button, or use shortcut key of payment voucher F5.
3. Now we are in Payment voucher entry screen
4. 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 change mode option in buttons bar.

Page 34 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
What is Receipt?

We use receipt when someone pay us a certain some of money towards the consideration of sale,
service or any other repayment & Payments like loan ,advances etc. In such cases we issue a printed
receipt as an acknowledgment of money receipt. Receipt is a legal document that we received cash,
cheque from other party.

What is a Cash receipt?

A cash receipt is the one, when transaction is settled through cash or money receiving through cash,
for example,

1. Cash brought by Rajeev as capital Rs 100000.00

2. Cash received from Asia pacific Rs 15000.00
3. Advance repaid by Mr X
4. Loan amount repaid by Mr Y

The above four are the examples of cash receipt

What is a Bank receipt?

Bank receipt are the amount received through bank using instruments like check, DD, online
transfer like NEFT,RTGS,UPI etc.

When receiving a check or DD, we will deposit this into our bank account, bank credit the money in
our account after collecting this money from drawer’s bank. Online transfer is the fastest way
of bank transactions.

Examples of the banking receipt transactions.

1. Amount transferred through NEFT ( National electronic fund transfer) Rs 50000.00 by

Ambuja cements to our SBI A/c # 651
2. Check no 546845 received Rs 1000 on account of Commission.

How to enter receipt voucher in Tally Prime

 Go to Gateway of Tally  Voucher

 To access receipt voucher Press F6 Shortcut key or click on F6: Receipt button on the right
button panel.
 Now we are in receipt voucher entry screen
 Receipt voucher can be passed using Single Entry or Double Entry mode by configuring the
setting Use Single Entry mode for Pymt/Rcpt/Contra in change mode option in buttons bar.

Page 35 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
`
Cash Payment & Receipts Problem -1

1. Vignesh Computers started business with Rs. 10,00,000

2. Purchase Computers Rs. 1,80,000
3. Purchases Furniture Rs. 55,000
4. DCA Admission Fee received Rs. 1,20,000
5. AUTOCAD Admission Fee Received Rs. 85,000
6. VFX Admission Fee Received Rs.65,000
7. Web Designing Admission Fee received Rs. 95,000
8. Rent paid Rs. 25,000
9. Salaries Paid Rs. 66,000
10. Current bill paid Rs. 7,500
11. Telephone bill paid Rs. 5,500
12. Other expenses Rs. 5,000

Solution

Step: 1

Company Creation

Step: 2

Ledger Creation

Gateway of Tally  Create  Ledgers

Ledger Name Group Name

Cash Cash

Vignesh Computers Capital

Computers Fixed Assets

Furnitures Fixed Assets

DCA Admission Fee Indirect Income

AUTOCAD Admission Fee Indirect Income

VFX Admission Fee Indirect Income

Web Designing Admission Fee Indirect Income

Rent Indirect Expenses

Salaries Indirect Expenses

Current Bill Indirect Expenses

Telephone Bill Indirect Expenses

Page 36 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Other Expenses Indirect Expenses
Step: 3

Accounting Vouchers

Gateway of Tally  Vouchers

Date Voucher Type Particulars Debit Credit

Receipt By Cash A/C 10,00,000
1-4-24 To Vignesh Computer Alc 10,00,000

2-4-24 Payment By Computers A/c 1,80,000

To Cash A/c 1,80,000

3-4-24 Payment By Furniture A/c 55,000

To Cash A/c 55,000

4-4-24 Receipt By Cash A/c 1,20,000

To DCA Admission Fee A/c 1,20,000

5-4-24 Receipt By Cash A/c 85,000

To AUTOCAD Admission Fee A/c 85,000

6-4-24 Receipt By Cash A/c 65,000

To VFX Admission Fee A/c 65,000

7-4-24 Receipt By Cash A/c 95,000

To Web Designing Admission Fee A/c 95,000

8-4-24 Payment By Rent A/c 25,000

To Cash A/c 25,000

9-4-24 Payment By Salaries A/c 66,000

To Cash A/c 66,000

10-4-24 Payment By Current Bill A/c 7,500

To Cash A/c 7,500

11-4-24 Payment By Telephone Bill A/c 5,500

To Cash A/c 5,500

12-4-24 Payment By Other Expenses A/c 5,000

To Cash A/c 5,000

Ans

Page 37 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Net profit: Balance sheet: P&L A/c:

Contra Voucher

Contra entry is the internal movement of fund which has no business effect. This means that cash is
moving across accounts. For example cash is moving from cashier to bank, that is cash account to
bank account. We call it cash deposit. Sometimes may be in reverse of this transaction, that is bank
account to cash account, we call it cash withdrawal. Organizations may possess more than one bank
accounts. Suppose when a business requires transferring money from one bank account to another
bank account, in such case we use contra voucher. In the same way there may be more than one
cash accounts, for example petty cash & main cash. Issuing money to petty cashier is an internal
movement for fund which required being entered using contra entry.

Types of contra entries are

1. Bank account to another bank account of same company

2. Cash account to bank account of same company ( Cash deposit)
3. Bank account to cash account of same company ( cash withdrawal)
4. Cash account to another cash account of the company ( like petty cash to main cash account
and reverse)

When we enter contra entry there is no effect in our business result (Profit
or loss) as the assets are rotating inside the organization.

Examples of contra entry

 Cash Deposited to SBI A/c No # 651 Rs 100000.00

This means that cash is moving from cashier to bank account. So the fund is still in our hand
the nature of this transaction is cash deposit.

 Cash Withdrawn from SBI A/c No# 651 Rs 25000.00

Cash is flowing from bank to business, so the fund is still in cashier’s hand.

 Amount transferred to SBI A/c No # 651 to AXIS Bank a/c # 451 Rs 25000.00 and IOB A/c #
851 Rs 25000.00

Here fund is moving from one bank account to another bank account, there is no change in
the financial position of the company.

 Cash transferred from cash account to Petty cash account Rs 15000.00

This is also cash moving from main cashier to petty cashier

How to enter Contra entry

From the gateway of tally

 Go to Gateway of Tally>Vouchers> F4: Contra

Page 38 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
 (Press F4 function key the shortcut key of contra voucher to access contra voucher)
Exercise

1. Lakshmi Mobile started business with Rs. 20,00,000/-

2. Cash deposited at Vijaya Bank Rs. 9,00,000/-
3. Purchase Computers Rs. 1,20,000/-
4. Purchase Furniture by cheque Rs. 65,000/- Cheque No: 236548.
5. Nokia Mobiles Service Charges Received Rs. 1,20,000/-
6. LG Mobiles Service Charges received by cheque Rs. 90,000/- Ch.No: 254871
7. Sony Mobile Service Charges Received Rs. 88,000/-
8. Samsung Mobiles Service Charges received by cheque Rs. 85,000/- Ch.No: 984661
9. Rent paid Rs. 20,000/-
10. Current bill paid Rs. 7,500/-
11. Salaries Paid Rs. 65,000/-
12. Telephone charges paid Rs. 8,800/-
13. Other Expenses Rs. 6,000/-
14. Cash withdraw from vijaya bank Rs. 65,000/- Ch.No: 856479.

Solution

Step: 1
Company Creation

Step: 2
Ledger Creation
Gateway of Tally  Create  Ledgers
Ledger Name Group Name
Lakshmi Mobile Capital Capital Account
Computers Fixed Assets
Furniture Fixed Assets
Nokia Mobile Service Charges Indirect Incomes
LG Mobile Service Charges Indirect Incomes
Sony Mobile Service Charges Indirect Incomes
Samsung Mobile Service Charges Indirect Incomes
Rent Indirect Expenses
Current Bill Indirect Expenses
Salaries Indirect Expenses
Telephone Charges Indirect Expenses
Other Expenses Indirect Expenses
Vijaya Bank Bank Accounts

Page 39 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Cash Cash
Step: 3

Accounting Vouchers
Gateway of Tally  Vouchers
Voucher
Date Particulars Debit Credit
Type
1-4-24 Receipt By Cash A/c 20,00,000
To Lakshmi Mobile Capital A/c 20,00,000

1-4-24 Contra By Vijaya Bank A/c 9,00,000

To Cash A/c 9,00,000

1-4-24 Payment By Computer A/c 1,20,000

To Cash A/c 1,20,000

1-4-24 Payment By Furniture A/c 65,000

To Vijaya Bank A/c 65,000

1-4-24 Receipt By Cash A/c 1,20,000

To Nokia Mobiles Service Charges 1,20,000
A/c
1-4-24 Receipt By Vijaya Bank A/c 90,000
To LG Mobile Service Charges A/c 90,000

1-4-24 Receipt By Cash A/c 88,000

To Sony Mobile Service Charges 88,000
A/c
1-4-24 Receipt By Vijaya Bank A/c 85,000
To Samsung Mobile Service 85,000
Charges A/c
1-4-24 Payment By Rent A/c 20,000
To Cash A/c 20,000

1-4-24 Payment By Current Bill A/c 7,500

To Cash A/c 7,500

1-4-24 Payment By Salaries A/c 65,000

To Cash A/c 65,000

1-4-24 Payment By Telephone Charges A/c 8,800

To Cash A/c 8,800

1-4-24 Payment By Other Expenses A/c 6,000

To Cash A/c 6,000

1-4-24 Contra By Cash A/c 65,000

To Vijaya Bank A/c 65,000

Answer:

Page 40 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Net profit: Balance sheet: P&L A/c:

Page 41 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Sales & Purchases Vouchers
Purchase Voucher

A purchase voucher is a commercial document used to record a purchase of goods or services from a
supplier. It serves as a formal record of the transaction and provides important information for
accounting and inventory management. In Tally, purchase vouchers can be created in two modes:
voucher mode and invoice mode.Sales Voucher / Invoice in Tally

1. Go to Gateway of Tally > Vouchers > Press F9 (Purchase) > Select As Voucher > Press Enter.
2. Press Ctrl+H (Change Mode) > Select Item Invoice / Voucher

Sales Voucher

A sales voucher is a commercial document used to record the sale of goods or services to a
customer. It serves as a formal record of the transaction and provides important information for
accounting, inventory management, and taxation purposes. In Tally, sales vouchers can be created in
two modes: voucher mode and invoice mode.

1. Go to Gateway of Tally > Vouchers > Press F8 (Sales) > Select As Voucher > Press Enter.
2. Press Ctrl+H (Change Mode) > Select Item Invoice / Voucher

Credit Note:

A credit note is a commercial document issued by a seller to a buyer to reduce the amount owed by
the buyer. It is commonly used to rectify errors on an invoice or to reflect returns of goods or
services. In Tally, credit notes can be created in two modes: voucher mode and invoice mode.

To create a credit note in voucher mode, follow these steps:

1. Go to Gateway of Tally > Vouchers > Press F10 (Other Vouchers) > Type or select Credit Note
> Press Enter.
2. Press Ctrl+H (Change Mode) > Select Item Invoice / Voucher

Debit Note:

A debit note is a commercial document issued by a buyer to a seller to increase the amount owed by
the seller. It is commonly used to rectify errors on an invoice, to reflect additional charges, or to
adjust the price of goods or services. In Tally, debit notes can be created in two modes: voucher
mode and invoice mode.

1. Go to Gateway of Tally > Vouchers > Press F10 (Other Vouchers) > Type or select Debit Note
> Press Enter.
2. Press Ctrl+H (Change Mode) > Select Item Invoice.

Page 42 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Mr. Nirmal has the following transactions in the month of April.

Write Journal Entries for the transactions.

10th April : Commenced business with a capital of 1,00,000

11th April : Purchased goods from Veeru for 20,000
13th April : Purchased Goods for Cash 15,000
14th April : Purchased Goods from Abhiram for cash 9,000
16th April : Bought Goods from Shyam on credit 12,000
17th April : Sold goods worth 15,000 to Tarun
19th April : Sold goods for cash 20,000
20th April : Sold goods to Utsav for cash 6,000
21st April : Sold goods to Pranav on credit 17,000
22nd April : Returned goods to Veeru 3,000
23rd April : Goods returned from Tarun 1,000
25th April : Goods taken by the proprietor for personal use 1,000
26th April : Bought Land for 50,000
27th April : Purchased machinery for cash 45,000
28th April : Bought computer from Intel Computers for 25,000 on credit
28th April : Cash sales 15,000
29th April : Cash purchases 22,000
30th April : Bought furniture for proprietor's residence and paid cash 10,000

Step 1:

Company creation

Step :2

Ledger creation

Gateway of Tally  Create  Ledgers

Ledger Name Group Name
Capital Capital Account
Cash Cash-in-Hand
Purchase Purchase Account
Veeru Purchase Account
Shyam Purchase Account
Bank Account Bank Account
Tarun Sales Account
Utsav Sales Account
Pranav Sales Account
Land Fixed Asset
Machinery Fixed Asset
Computers Fixed Asset
Furniture Fixed Asset
Sales Sales Account

Step: 3

Page 43 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Accounting Vouchers
Gateway of Tally  Vouchers

Date Voucher Type Particulars Debit Credit

10-4- By Cash A/c 1,00,000
24 To Capital A/c 1,00,000

11-4- By Purchase A/c 20,000

24 To Veeru A/c 20,000

13-4- By Purchase A/c 15,000

24 To Cash A/c 15,000

14-4- By Purchase A/c 9,000

24 To Abhiram A/c 9,000

16-4- By Purchase A/c 12,000

24 To Shyam A/c 12,000

17-4- By Tarun A/c 15,000

24 To Sales A/c 15,000

19-4- By Cash A/c 20,000

24 To Sales A/c 20,000

20-4- By Utsav A/c 6,000

24 To Sales A/c 6,000

21-4- By Pranav A/c 17,000

24 To Sales A/c 17,000

22-4- By Veeru A/c 3,000

24 To Purchase Returns A/c 3,000

23-4- By Sales Return A/c 1,000

24 To Tarun A/c 1,000

25-4- By Purchase A/c 1,000

24 To Capital A/c 1,000

26-4- By Land A/c 50,000

24 To Cash A/c 50,000

27-4- By Purchase A/c 45,000

24 To Cash A/c 45,000

28-4- By Purchase A/c 25,000

24 To Bank A/c 25,000

Page 44 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
28-4- By Cash A/c 15,000
24 To Sales A/c 15,000

29-4- By Purchase A/c 22,000

24 To Cash A/c 22,000

30-4- By Capital A/c 10,000

24 To Cash A/c 10,000

Journalize the transactions in books month of may

3rd May : Cash deposited into sbi bank 60,000

4th May : Loan given to Bhuvan 20,000
4th May : Paid cash to Veeru 20,000
5th May : Paid to Veeru by cheque 15,000
5th May : Cash received from Tarun 12,000
5th May : Took loan from Anush 15,000
6th May : Cheque received from Pranav 15,000
6th May : Paid to Intel Computers by cheque 17,000
6th May : Withdrew from bank 5,000
7th May : Withdrew from bank for office use 8,000
7th May : Cash received from Bhuvan on loan account 10,000
8th May : Withdrew from bank for personal use 1,000
8th May : Cash taken by proprietor for personal use 3,000
9th May : Bought furniture and paid by cheque 15,000
9th May : Paid to Anush by cheque on loan account 5,000
9th May : Brought additional capital of 25,000

Step: 1
Ledger Creation
Gateway of Tally  create  Ledger

Ledger Name Group Name

sbi Bank accounts
Bhuvana loan a/c Loan & advances (asset)
Anush loan a/c Loan (liability)
furniture Fixed asset
Step: 2

Accounting Vouchers
Gateway of Tally  Vouchers

Date Voucher Type Particulars Debit Credit

contra By sbi a/c 60000/-
To cash a/c 60000/-

Page 45 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Being Cash deposited into sbi
bank 60,000
Bhuvan loan a/c dr. 20000/-
To cash a/c 20000/-
payment
Being Loan given to Bhuvan
20,000
Veeru A/c Dr. 20000/-
payment To Cash A/c 20000/-
Being cash paid to veeru
Veeru a/c dr. 15000/-
To sbi a/c 15000/-
payment
Being paid amount through
cheque
Cash a/c dr. 12000/-
Receipt To tarun a/c 12000/-
Being cash received from tarun
Cash a/c dr. 15000/-
Receipt To anush loan a/c 15000/-
Being loan taken from anush
Sbi a/c dr. 15000/-
To pranav a/c 15000/-
Receipt
Being a cheque received from
pranav
Intel computers a/c dr. 17000/-
To sbi 17000/-
payment
Being paid amount to intel computer
by cheque
Cash a/c dr. 5000/-
contra To sbi a/c 5000/-
Being cash withdraw from sbi
Cash a/c dr. 8000/-
contra To sbi a/c 8000/-
Being cash withdraw from sbi
Cash a/c dr. 10000/-
To bhuvan loan a/c 10000/-
Receipt
Being bhuvan paid back his loan loan
a/c
Nimal capital a/c dr. 1000/-
To sbi a/c 1000/-
payment
Being owner taken 1000/- for personal
use from sbi
Nimal capital a/c dr. 3000/-
To cash a/c 3000/-
payment
Being owner taken 1000/- for personal
use
Furniture a/c dr. 15000/-
To sbi a/c 15000/-
payment
Being purchase furniture and paid by
cheque
payment Anush loan a/c dr. 5000/-

Page 46 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
To sbi a/c 5000/-
Being paid cash to anush his loan a/c
Receipt Cash a/c dr. 25000/-
To nirmal capital a/c 25000/-
Being bought additional capital

Page 47 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Journalise the following transaction in the books of Ram. Post them in the ledger and balanced the
various accounts opened in the ledger.April

2nd Ram started his business with Cash Rs. 70000.

3rd Deposited in to Sbi Bank Rs. 50000.
4th Purchased goods for cash from Mr. X Rs. 5000.
5th Bought goods on credit from Mr. Y Rs. 6000.
6th Returned goods to Mr. Y Rs. 1000.
10th Sold goods for cash to Mr. A Rs. 6000.
15th Sold goods to Mr. B Rs. 6000.
16th Mr. B returns goods Rs. 1000.
17th Drew from Bank for personal use Rs. 5000.
25th Paid to Mr. Y in full Settlement by Cheque Rs. 4800.
26th Received a cheque from Mr. B in full settlement Rs. 4900.
27th Draw cash from bank for office use Rs. 10000.
30th Draw cash for personal purpose Rs. 5000.
30th Paid salary to staff Rs. 5000.
30th Issued a cheque for Rs. 3000 in favour of SriDevi a landlady towards rent for April.
30th Withdraw goods for personal use Rs. 1000.

Step 1:

Company creation

Step 2:

Ledger creation

Ledger Name Group Name

Cash Cash-in-Hand
Ram Capital Capital Account
SBI Bank Accounts
Purchase Purchase Account
Mr. Y Sundry Creditor
Purchase Returns Purchase Account
Sales Sales Account
Mr. B Sundry Debtors
Sales Returns Sales Account
Salaries Indirect Expenses
Rent Indirect Expenses
Discount allowed Indirect Expenses
Discount Received Indirect Income

Page 48 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Step 3:

Voucher entry

Date Voucher Type Particulars Debit Credit

2-4- Receipt By Cash A/c 70000
2024 To Ram Capital A/c 70000

3-4- Contra By SBI Bank A/c 50000

2024 To Cash A/c 50000

4-4- Purchases By Purchase A/c 5000

2024 To Cash A/c 5000

5-4- Purchases By Purchase A/c 6000

2024 To Mr. Y A/c 6000

6-4- Debit Note By Mr. Y A/c 1000

2024 To Purchase Returns A/c 1000

10-4- Sales By Cash A/c 6000

2024 To Sales A/c 6000

15-4- Sales By Mr.B A/c 6000

2024 To Sales A/c 6000

16-4- Credit Note By Sales Returns A/c 1000

2024 To Mr. B A/c 1000

17-4- Payment By Ram Capital A/c 5000

2024 To SBI Bank A/c 5000

25-4- Payment By Mr. Y A/c 5000

2024 To SBI Bank A/c 4800
To Discount Received A/c 200
26-4- Receipt By Cash A/c 4900
2024 To Discount Allowed A/c 100
To Mr. B A/c 5000
27-4- Contra By Cash A/c 10000
2024 To SBI Bank A/c 10000

30-4- Payment By Ram Capital A/c 5000

2024 To Cash A/c 5000

30-4- Payment By Salary A/c 5000

2024 To Cash A/c 5000

30-4- Payment By Rent A/c 3000

2024 To SBI Bank A/c 3000

Page 49 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
30-4- Journal By Ram Capital A/c 1000
2024 To Purchase A/c 1000

Page 50 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material

Inventory Module in TallyPrime:

Purpose: Streamlines inventory management processes, enabling you to track stock levels, monitor
transactions, generate reports, and make informed decisions regarding purchases, sales, and
inventory optimization.

Key Features:

 Stock Item Creation: Easily create and manage stock items with details like:
o Name, alias, group, category
o Unit of measure, godown (location), opening balance
o Reorder level, batch/serial numbers (optional)
o Image (for visual identification)
 Inventory Transactions: Record various inventory-related transactions:
o Purchases, sales, transfers, adjustments
o Physical verification, manufacturing, job costing
 Stock Tracking: Track stock movement across:
o Godowns/locations
o Different stages of processing
 Valuation Methods: Choose appropriate stock valuation methods:
o FIFO (First-In-First-Out)
o LIFO (Last-In-First-Out)
o Weighted Average
o Average Cost
o Standard Cost
 Item Cost Tracking: Analyze running cost and profitability of individual items.
 Inventory Reports: Gain insights with reports like:
o Stock Summary
o Stock Aging Analysis
o Movement Analysis
o Reorder Status
o Godown Summary
o Item-wise Profitability
o Batch Summary
o Item Cost Analysis
 Benefits:
o Enhanced inventory control
o Improved accuracy in stock records
o Reduced stock-outs and overstocking
o Better decision-making for inventory optimization
o Cost savings and increased profitability
 Additional Features:
o Flexible stock valuation
o Batch/serial number tracking

Page 51 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
o Job costing
o Integration with other TallyPrime modules

A Guide On Processing Inventory In Tallyprime

Here's a guide on processing inventory in Tally Prime:

1. Create Stock Items:

1. Access the Inventory module.
2. Select "Create" > "Stock Item."
3. Enter essential details like Name, Group, Unit of Measure, Godown, Opening
Balance, etc.
4. Optionally, add Reorder Level, Batch/Serial Numbers, and an Image.
2. Record Inventory Transactions:
 Use relevant voucher types for different transactions:
o Purchases: Purchase Voucher
o Sales: Sales Voucher
o Transfers: Stock Journal
o Adjustments: Stock Journal
o Manufacturing: Manufacturing Journal
o Physical Verification: Physical Stock Voucher
 Specify voucher details, including date, stock item, quantity, rate, godown, batch/serial
numbers (if applicable).
3. Track Stock Movement:
 View real-time stock levels and movement across godowns and stages of processing.
 Access Stock Summary for an overview.
 Generate Movement Analysis and Godown Summary reports for detailed insights.
4. Manage Valuation:
 Select a suitable valuation method (FIFO, LIFO, Weighted Average, etc.) under Inventory
Features.
 Monitor item-wise profitability using Item Cost Tracking.
5. Generate Reports:
 Access various inventory reports for analysis and decision-making:
o Stock Summary
o Stock Aging Analysis
o Movement Analysis
o Reorder Status
o Godown Summary
o Item-wise Profitability
o Batch Summary
o Item Cost Analysis

Additional Tips:

Page 52 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
 Regularly reconcile physical stock with TallyPrime records.
 Use batch/serial number tracking for better control.
 Leverage job costing for production-related expenses.
 Integrate inventory data with other TallyPrime modules for seamless operations.

Creating Stock Groups in TallyPrime

Stock groups help categorize your inventory items, making it easier to organize, track, and analyze
them.

1. Access the Inventory Module:

 Open TallyPrime.
 Go to Gateway of Tally > Create (or press ALT+G).
 Select Stock Group (or type "Stock Group" and press Enter).
2. Create the Stock Group:
 In the Stock Group Creation screen, enter the following details:
o Name: Enter a descriptive name for the group (e.g., Office
Supplies, Electronics, Groceries).
o Alias: (Optional) Specify additional names for reference.
o Under: Choose the parent group, if any. Otherwise, select Primary.
o Set/Alter VAT Details: This is relevant if you're using VAT. Click Yes to configure
VAT details later.

Create Units In Tally prime:

1. Access the Inventory Module:

 Open TallyPrime.
 Go to Gateway of Tally > Create (or press ALT+G).
 Select unit (or type "unit" and press Enter).
2. Choose Unit Type:
 Select Create.
 Decide on the type of unit:
o Simple Units: Basic units like "Nos", "Kg", "Meters", etc.
o Compound Units: Combinations of Simple Units, like "Dozen" (12 Nos).
3. Create a Simple Unit:
 Type: Simple (default).
 Symbol: Enter the unit abbreviation (e.g., "Nos", "Kg").
 Formal Name: Enter the full unit name (e.g., "Numbers", "Kilograms").
 No. of Decimal Places: Specify the number of decimal places needed (e.g., 2 for grams).
 Accept (or press Ctrl+A) to save.
4. Create a Compound Unit:
 Type: Select Compound.
 First Unit: Choose the base unit (e.g., "Nos").
 Conversion: Enter the conversion factor to the second unit (e.g., 12 for "Dozen").
 Second Unit: Select the second unit (e.g., "Dozen").

Page 53 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
 Accept to save.

Creating Stock Items In Tallyprime

1. Access the Stock Item Creation Screen:

 Gateway of Tally > Create (or ALT+G) > Stock Item (or type "Stock Item" and press Enter).
2. Enter Essential Details:
 Name: Enter the item's name (e.g., "Laptop", "Pen", "Rice").
 Alias: (Optional) Specify alternate names or abbreviations.
 Under: Select the appropriate stock group (e.g., "Electronics", "Stationery", "Food
Items").
 Units: Choose the unit of measure (e.g., "Nos", "Kg", "Liters").
3. Configure Additional Settings (Optional):
 Godown: Select the default storage location.
 Opening Balance: Enter the initial stock quantity, if any.
 Reorder Level: Set a threshold to trigger purchase orders.
 Batch-wise Details: Enable for tracking individual batches.
 Serial Number Tracking: Enable for tracking individual items.
 VAT/Tax Details: Set applicable tax information (if required).
 Image: Attach a visual representation of the item.
4. Save the Stock Item:
 Press Enter or Ctrl+A to save.

Key Points:

 Use meaningful names and aliases for easy identification.

 Organize items into logical stock groups.
 Select appropriate units of measure for accurate tracking.
 Configure additional settings based on your inventory needs.
 Utilize batch/serial tracking for enhanced control (if applicable).
 Set VAT/tax details correctly (if applicable).
 Attach images for visual clarity (optional).

Page 54 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Accounts with Inventory Problem 1:

Cash Purchases & Sales with inventory

1. Weds & Co Started Business with Rs. 10,000,00/-

2. Purchase Machinery Rs. 1,20,000/-
3. Purchase Furniture for 10,000/-
4. Purchase 50 LG TV’s for cash@ Rs. 6,500/-
5. Purchase 25 Sony TV’s for cash@ Rs. 6,000/-
6. Purchase 25 Samsung TV’s for cash@ Rs. 6,200/-
7. Sales 15 LG TV’s for cash@ Rs. 7,500/-
8. Sales 23 Sony TV’s for cash@ Rs. 7,000/-
9. Sales 22 Samsung TV’s for cash@ Rs. 7,200/-
10. Wages paid Rs. 1,200/-
11. Salaries Paid Rs.5,200/-
12. Carriage Inwards Rs. 1,260/-
13. Received Commission Rs. 3,200/-
14. Rent paid Rs. 5,000/-

Step 1:

Company creation

Step 2:

Ledger creation

Ledger name Group name

Cash Cash -in- hand
Weds & co Capital account
Machinery Fixed assets
Furniture Fixed asset
Purchases Purchases account
Sales Sales account
Wages Direct expenses
Salaries Indirect expenses
Received commission Indirect income
rent Indirect expenses
Carriage inward Direct expenses

Step 3:

Inventory creation

a) Stock groups
a. Tv’s
b) Unit
a. Pcs

Page 55 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
c) Stock items

Item name Unit of measure group

Lg tv Pcs Tv
Samsung tv Pcs Tv
Son tv Pcs Tv

Step 4:

Accounting vouchers

Page 56 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Cheque Purchase & Sales using inventory vouchers

1. Tel&co started business with 20,00,000/-

2. Cash deposited at SBI Rs. 15,00,000/-
3. Purchase Furniture for cash 75,000/-
4. Purchase Machinery by cheque Rs. 2,00,000/- Ch. No: 1234536
5. Purchase 20 Nokia mobiles for cash @6,500/-
6. Purchase 30 LG mobiles for Cheque @6,000/- Ch.No: 224536
7. Purchase 25 Samsung mobiles for Cheque @6,200/- Ch.No: 924536
8. Sales 18 NOKIA mobiles by cash @RS7,500/-
9. Sales 25 LG mobiles by cheque @RS.7,000/_,ch.no:-125836
10. Sales 23 SAMSUNG mobiles by cheque @RS.7,800/-,ch.no:-235689
11. Rent paid by cheque RS.12,500/-,ch.no:-453656
12. Salaries paid by cheque rs.8,500/-,ch.no:-235536
13. Carriage inwards by cheque rs.10,000/-,ch.no:-245636
14. Commission received by cheque rs.3,500/-,ch.no:-568947
15. Bank charges RS.1,200/-

Solution:-
Step1:- company creation :-
Company creation

Step2:- ledger creation :-

Ledger creation

Ledger name Group name

Step3:- stock creation :-

Inventory creation

a) Stock groups
a. Mobiles
b) Unit of mesure

Page 57 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
a. Pcs
c) Stock items

Item name Unit of measure group

Step4:- accounting vouchers:-

Gateway of tally  Vouchers

Page 58 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
Problem:
1. Amma & u started business with Rs. 50,00,000/-
2. Cash deposited at SBI bank RS. 15,00,000/-
3. Purchase machinery by cheque RS,1,25,000/-,ch.no:-195826
4. Purchase 40 Lg TV’s for cash @ 6,500/-
5. Purchase 40 Sony TV’s for cash @ 7,200/-
6. Purchase 40 Samsung TV’s from Akshaya @ 6,300/-
7. Purchase 40 BPL TV’s by cheque @ 5,500/-
8. Sales 30 Lg TV’s to cash @ 7,500/-
9. Sales 35 Sony TV’s to cash @ 8,200/-
10. Sales 38 Samsung TV’s by cheque @ 7,000/-
11. Sales 25 BPL TV’s to Jyothi @ Rs. 6,200/-
12. Salaries Paid Rs. 18,000/-
13. Rent Paid Rs. 5,500/-
14. Carriage inward Rs. 15,000/- (included outward 60%)
15. Sales Returns 3 BPL TV’s from Jyothi
16. Purchase Returns 2 Samsung TV’s to Akshaya
17. Insurance paid Rs.3,500/-
18. Bank Charges Rs. 250/-
19. Commission Received Rs. 3,500/-

Solution:

Step 1:

Company creation

Step 2:

Ledger creation

Create ledgers like previous and here new ledgers are

Ledgers Groups
Sales returns Sales
Purchases returns purchase

Step 3:

Stock creation:

1. Stock groups
2. Unit of measure
3. Stock items

Step 5:

Accounting Vouchers

Page 59 of 60
 VIGNESH COMPUTER EDUCATION
Tally Prime Material
For Purchase Returns Debit note vouchers

For Sales Returns Credit note vouchers

Page 60 of 60