COMPUTER APPLICATION IN BUSINESS (TALLY)

UNIT – I
Introduction of Tally:
 Tally is simple and powerful software developed by tally solutions pvt.Ltd.
Bangalore.
 It is used to manage both accounting and inventory.
 It is developed using Tally development language. (TDL).
 It is an integrated enterprise solution with accounting and inventory management
in stock.
 It is easy to learn and teach.

Definition of computer:
According to the Oxford Dictionary, A computer is “an electronic machine for making
calculating, storing and analysing information fed into it.”

Tally Screen Components:

1. Title Bar – Displays the version number, system date and time.
2. Gateway of Tally –Displays menus, Screens and Reports.
3. Calculator – Used for calculator functions.
4. Buttons Toolbars – Displays buttons that provide quick interaction with Tally.
5. Minimize Button – Performs the standard windows function, allowing us to
minimize Tally to work on other applications.

Features of Accounting:
 Accounting is often called the language of business as it serves as a means of
communication.
 Accounting is an information system is the process of identifying, measuring and
communicating the economic information of an organisation to the users who need
the information for decision – making.
 Accounting measures transactions and events in terms of monetary units.

Role of computer accounting:

The role of computer in accountancy can be classified as follows;

 In controlling operations.
 In deciding sequence of operations.
  Accounting operations.

Extended Enterprise Features:

1. ODBC (Open Data Base Connectivity):-
 Which helps to open up tally. This enables to integrate Tally data in to other
ODBC Excel and Word from Tally like customers name and address, account
balances etc.
2. E-mail reports and documents directly from Tally.
3. Publish reports in HTML on web or intranet and share them with suppliers and
customers on own staff.

TO starting Tally:
 Tally can be launched in any of the following ways :
1. Double click the Tally icon on desktop.
2. Select ‘Run’ from start menu and enter the command.
3. At start menu, for Tally, to select program  Tally.
4. Explore the Tally program folder, double click the program file.
 On loading Tally, the Gateway of tally screen will appear.
 This screen is divided four broad parts
1. Title Bar or Product info.
2. Gateway of Tally
a. Work Area
b. Company Information Menu
3. Calculator and ODBC server
4. Button bar.

Features of Tally:
 Accounting without codes.
 Controlling costs.
 Receivable and payable management.
 Profitability analysis.
 Enhancement of productivity.
 Flexible.
 Multi price levels.
 Multi-currency.
 Multiple stock valuations.
 Various options for interest calculations.
 Multiple reports and accounting.
  Allows import and export at data.
 Online help.
 Backup & restore of data.
 Security control and auditing capabilities.
 Helps to evaluate various taxations like VAT, TDS, TCS, and FBT etc.

Accounting Operations:
 Computers are helpful for various accounting operation like purchase, stores
ledger, cash books, sales etc.
 The main functions of accounting are recording, classifying and summarizing in a
significant manner and in terms of money, transactions and events.

Accounting Cycle:
 Recording
 Classifying
 Summarizing

Types of Accounts (Or) Golden Rules of Accounts

The transactions are divided in to three categories,

 Transactions relating to individual and other organisation.

 Transactions relating to properties or goods or cash.
 Transactions relating to Expenses and incomes.

Based on these transactions, the accounts are divided,

I. Personal Accounts
II. Impersonal Accounts
1. Real Account
2. Nominal Account
I. Personal Accounts: It dealing with an Individual or corporate bodies or
Institutions. (e.g.) Customers a/c, bank a/c, Credit a/c, debit a/c, Owner a/c ,
Firm a/c.

Rules:

(By) Debit the Receiver

(To) Credit the Giver.

 II. Impersonal Accounts :
1. Real Account: These are accounts of tangible items. (e.g.)Cash a/c, Building
a/c, Machinery a/c, Stock a/c.

Intangible a/c: It is intangible of the business. Which can’t be touched

but they can be measured in terms of money.

Rules:-

(BY) Debit what comes in.

(TO) Credit what goes out.

2. Nominal Account: It deals with expenses and losses, incomes and gains.
(e.g.)Rent a/c, Depreciation a/c, Wages a/c.

Rules:-

(BY) Debit All Expense and Losses

(TO) Credit All Incomes and Gains.

Double Entry System:-

 This system originated from an Italian merchant named Luco Pasioli. Who wrote
the first book called T-computer set sacriputaries on double entry system of
accounting in 1994.
 It is easiest and scientific way of presenting accounts. Here the business
transaction is considered under two aspects. They are receiving aspect is known as
debit and giving aspect is known as credit.
 Every debit has a corresponding equal to credit and vise-versa. This system called
as double entry system.

Ledger Creation:
 In the journal each transaction is dealt separately.
 In business, there may be several transactions relating to one particular account.
 In journal, these transactions appear in different pages in a chronological order
while they appear in a classified form under that particular account in the Ledger.
 Ledgering is summarising and classifying transactions.
 Separate Ledger is opened for each type of account. It has two sides;
 Debit side
 Credit side
  Simply saying to use words “to” with the accounts which appear on the debit side
and “By” with the accounts which appear on the credit side of the Ledger a/c.

Accounting Features:
 Maintain bill-wise details.
 Maintain cost centres.
 Use reversing journals and optional vouchers.
 Use debit and credit notes.
 Activate interest calculation.
 Income / Expenses statement instead of P/L account.

Inventory Features:
1. Maintain stock categories.
2. Maintain batch – wise details.
3. Set expiry dates for batches.
4. Maintain multiple godowns.
5. Use tracking numbers.
6. Use rejection notes.
7. Use different ‘Actual and Billed Quantity’
8. Track additional costs of purchase.

Sales and Purchase order processing:

It is one of the features for inventory management.

1. Handling of purchase and sales orders, based on the information provided is

possible in Tally.
2. Reports for purchase and sales order outstanding can be generated and these can be
E-mailed or printed and sent to suppliers and customers.

Accounting with Tally:

Tally maintains all books of accounts and offers a complete accounting
solution for many of the business needs.

The following are some of the Tally’s key accounting features;

1. Accounts receivable& Accounts payable management.

 2. Vouchers and cheque printing.
3. Bank re-conciliation.
4. Automating accounting allocations via voucher classes.

Pre-Defined Groups:-
Groups:
 Tally follows the ‘Single Ledger’ concept of accounting.
 It is advisable to Group/Classify ledger information based on their functions.
 A group is a collection of ledgers of the same nature.
 Accounts group provide us the ability to classify the accounts to get all the reports
instantly and properly classified.
 Accounting heads are classified into four types ;
1. Income
2. Expenditure
3. Assets
4. Liabilities

Groups by default (Pre-Defined Groups):-

 Tally provides you with a number of pre-defined groups to save you from
unnecessary burden of creating frequently used groups.
 Out of these groups, some are primary and some are subgroups.
 A sub group is a part of the main group.
 Pre-define groups divided into two types ;
I. Capital in Nature
II. Revenue in Nature
I. Capital in Nature: Capital in nature list out the following,

1. Capital A/c:
a. Reserves and Surplus

2. Current Assets: f. Sundry debtors

a. Bank a/c 3. Current liabilities
b. Cash in hand a. Duties and taxes
c. Deposits (Assets) b. Provisions
d. Loan & Advances (Assets) c. Sundry Creditors
e. Stock-in –hand 4. Fixed Assets
5. Investments
6. Loans (Liabilities)
a. Bank OD & OCC a/c
b. Secured Loans
c. Unsecured Loans
7. Suspense a/c
8. Branch/Divisions
9. Miscellaneous Expenses ( Assets )
II. Revenue in Nature :
1. Sales Account
2. Purchase Account
3. Direct Income
4. Indirect Income
5. Direct Expenses
6. Indirect Expenses

Creation of Groups:

Accounts Info. GroupsCreate.

Opening screen of Tally (Gateway of Tally)
 Title Bar
 Horizontal Button Bar
 Button Pane
 Main Area:
a. Left hand side :
 Current period
 Current date
 List of selected companies
 Name of company
 Date of Last Entry
b. Right hand side

Creating a Ledger:
 From the Gateway of Tally, select Account Info.
 In the Account Info, select Ledgers.
 In the Ledger box we select the Create option in the Single Ledger.
 The Ledger Creation screen displays as follows details ;
 In the Name (Computer sales a/c, building a/c, cash a/c, Bank a/c).
 In the Under (Here cash a/c comes under Cash-in-hand in the list of Groups).
 Opening Balance
 Mailing & Related Details
 Press ‘Y’ to accept the Ledger creation otherwise press ‘N’.

Double Entry System:-

Each transaction, when closely analysed will contain two aspects will be either the ‘Receiving
Aspect’ or ‘Incoming Aspect’. This termed as Debit Aspect.
Another aspect will be ‘Giving Aspect’ or ‘Outgoing Aspect’ or ‘Income Aspect’. This termed
as Credit Aspect.

These two aspects combined together to form Double Entry System.

UNIT-II
ACCOUNTS INFORMATION
Menu Related to Accounts:
Step-1 Select the company M/S Albert & Brothers by clicking on the F1: Select CMP on the
button panel.

Step-2 Now select the option Accounts information from the Gateway of Tally. Accounts
information option gives you overall information of groups, ledgers, cost centers, cost
categories, voucher types etc.

Managing Groups:-

Gateway of Tally  Accounts Info. Groups.

Two types of groups can be created by you:

Single Group: Work on one Group of a time.

Multiple Groups: Permits to work on many sub-groups at a time.

Creating New single primary Group (Advanced Mode):-

To create a new primary group, follow the sequence;

Gateway of Tally  Accounts Info. Groups  Single Create / Alter /Alt+D.

Creating Multiple Groups:-

It is useful when you wish to create a number of sub-groups in a group having same properties
as their parent group. Follow the sequence given below to do so;

Gateway of Tally  Accounts Info.Groups Multiple Create / Alter /Alt+D.

Budget
Introduction:-
 The objectives and goals vary from one organization to another. Every
organization sets its own targets and appraises its own targets and appraises its achievements
against the target set.

Such an appraisal of performance is possible with the help of budgets. The main
purpose of budgeting to control the expenditure and to increase the revenue.

Meaning Of Budgets:

A Budget is a detailed plan of operations for some specific future period. It is an

estimate prepared in advance of the period to which it applies.

Essential of Budget:-

i. It is prepared in advance and is based on future plan of action.

ii. It relates to a future period and is based on objectives to be attained.
iii. It is statement expressed in monetary and/or physical units, prepared for the
implementation of policy formulated by the management.

Types of Budget:-

In Tally, Budgets are of two types. That is,

1. On Nett transactions
2. On closing Balances.
1. On Net Transactions: This type of budget is used for normal accounts. (e.g.)The total
amount spent on advertisement, etc.
2. On closing Balances: The real and personal accounts should be monitored on balances
basis as at the end of the period.(e.g.) Debtors, Creditors,etc.

Budget Creation and Alteration:-

Accounts Information Budgets Create  Alter.

To view Budget:
Gateway of Tally  Display  Trial Balance Alt+B Select the required Budget.

(Or)

Gateway of Tally  Display  Accounts Book  Group summary  Select the Group
 < Alt>+<B>

VOUCHERS
Meaning Of Vouchers:

A voucher is a written document in support of a transaction. It is a in proof that a

particular transaction has taken place for the value stated in the voucher.

Tally provides 16 different pre-defined vouchers that can be used for recording various
transactions. These vouchers relate to both accounting and inventory.

Types of Vouchers:

I. Based on the Accounting Vouchers

II. Based on the Inventory Vouchers

III. Other type of vouchers.

I. Accounting Vouchers :
1. Contra (F4)
2. Payment (F5)
3. Receipts (F6)
4. Journals (F7)
5. Sales (F8)
6. Purchase (F9)

II. Inventory Vouchers :

1. Rejection In (Ctrl + F6)
2. Credit Note ( Ctrl +F8 )
3. Debit Note ( Ctrl + F9 )
4. Purchase Order (Alt + F4 )
5. Sales Order (Alt + F5)
6. Rejection Out (Alt + F6)
7. Stock Journal (Alt + F7 )
8. Delivery Note ( Alt + F8 )
9. Receipt Note (Alt + F9 )
10.Physical Stock ( Alt + F10 )
III. Other type of Vouchers :
1. Memorandum Voucher (Ctrl + F10 )
2. Optional and Regular Voucher ( Ctrl + L )
3. Reversing Journals (F10)
4. Post-Dated Vouchers ( Alt+J)

Restart Numbering:-

 Voucher Numbering may be restart with the starting number at intervals selected by us-
either date or month or yearly.
  Give the date of restarting under the field Applicable form. The date must be first day of
the month.
 We specified more than one restart date.
 This would retain the numbering system in the prior period.
 If you want to change the numbers from the beginning from monthly to yearly basis,
simply alter the first field itself.

FOREX Management (or) Foreign Exchange Transaction:

 Globalization of business has made organisation to work with the currencies other than
base currency.
 The currency in which the books of accounts are maintained is called base currency.
 While dealing with foreign currency, company has to manage FOREX gain or loss
because of price fluctuations in foreign currency market.
 Since the transaction involves foreign currencies, that have to be converted into the base
currency.
 While dealing with the foreign currency, user must be aware about the standard price ,
selling price and buying price of foreign currencies.
 Foreign currencies have to be converted in foreign exchange banks.
 Bankers will follow the method of “buy low and sell high”, which means buying the
foreign currencies for low price and selling the same for high price.

FOREX Gain /Loss:

FOREX gain or loss arises due to the foreign exchange rate fluctuations. This normally arises
in case there is any difference between standard price and market price.

Inventory Information:-
 Inventory means stock, the things which deal with buying and selling of goods.
 Inventory includes recording the stock of purchase, sale of stock, stock movement.
 Inventory providing the information of stock availability, stock consumption.

Stock Consumption=Opening Stock + Purchase –Closing Stock

 In Tally, numerous documents are created for inventory transactions.

 They consist of Enquiries, Quotations, Orders, and Challans etc.

Inventory Masters:-

I. Stock Groups
II. Stock Items
 III. Voucher Types
IV. Unit Measures
I. Stock Groups :-
Just as an accounts ledger is involved in all account transaction, stock items are
involved in all inventory transactions.
The relationship between stock item and stock group is similar to that between
accounts Ledger and accounts group. It includes two types of creation;
1. Single stock Group creation
2. Multiple stock Group creation

1. Single Stock Group Creation:

Perform the following sequence to create stock groups;

Gateway of Tally Inventory Information  Stock Groups Single Create.

2. Multiple Stock Group Creation :

Perform the following sequences to multiple stock groups.

Gateway of Tally Inventory Information Stock GroupsMultiple Create.

Displaying or Altering Multi Stock Groups:

Gateway of Tally  Inventory Information Stock Groups Multiple  Display
or Alter Alt+D (Delete).

Stock Categories:
 To help organisations, Tally allows a parallel method to organise stock item in stock
categories and retrieve reports accordingly.
 This option of stock category provides offers more flexibility in reporting.
 This concept is similar to the cost categories in accounts information.
1. Create stock category using in Single Mode :

Gateway of Tally Inventory InformationStock CategoriesSingleCreate

2. Create stock category using in Multiple Mode :

Gateway of Tally  Inventory Info.  Stock Categories  Multiple  Create

Displaying and Altering Stock Category (Single and Multiple)

Gateway of Tally  Inventory Information  Stock Category  Display (Or) Alter 

Alt + D (Delete).
 II. Stock Item :
 Similar to stock groups and stock categories, the stock items can be created
either single mode or multiple modes.
 The path for creation and Alteration of stock item is ,
For Creation:

Gateway of Tally  Inventory Information  Item  Create.

For Alteration:

Gateway of Tally  Inventory Information  Item  Alter.

For Display:

Gateway of Tally  Inventory Information  Item DisplaySingle Item Display (or)

multiple item Display.

For Alteration and Deleting:

Gateway of Tally  Inventory Info.  Item  Alter  Alt + D (For Deleting)

III. Unit Measures :

 Stock Items are purchased or sold on the basis of quantity.
 The quantity is measured by units. It is necessary to create. You need to create
Units of measures for all the stock items.
 Steps:

Gateway Of tally  Inventory Information  Units Measure Units  Create.

Two types of units of measures; 1. Simple and 2. Compound.

1. Simple :
A simple unit is used for (e.g. numbers, Litter, Meter, Kilograms etc.)
2. Compound :
Compound unit is a relation between two simple units. Compound units are used
for (e.g. Box of 10 Pieces or 1 dozen is 12 numbers.)

IV. Inventory Vouchers :

1. Rejection In (Ctrl + F6)
2. Credit Note ( Ctrl +F8 )
3. Debit Note ( Ctrl + F9 )
4. Purchase Order (Alt + F4 )
5. Sales Order (Alt + F5)
6. Rejection Out (Alt + F6)
 7. Stock Journal (Alt + F7 )
8. Delivery Note ( Alt + F8 )
9. Receipt Note (Alt + F9 )
10.Physical Stock ( Alt + F10 )

UNIT-III
Voucher Entry:-
 We recorded a transaction through a voucher entry.
 To enter voucher, Press V at the Gateway of Tally  Voucher entry.
 A voucher is a documentary evidence of a business transaction.
 E.g. A sales bill, a purchase bill or a payment voucher provides evidence to support the
fact that such transactions have taken place.
 We record transactions through journal entries where as in Tally we do it through
voucher entry.
The voucher creation screen:-
Top line of voucher creation screen displays Name of the company for which
we are creating voucher.
 Voucher entry screen can be divided into 2 parts ;
1. Header and
2. Body

1. Voucher Header :-
 Left side :- Display voucher type, voucher number and reference if any as shown
below ;
a. Type of voucher: Selected voucher type is shown at the top left corner.
b. Voucher Number: The number may be allotted by the user, or can be
automatically generated by Tally, according to options set in voucher types
under accounts information.
Tally provides 3 options for voucher Numbering:
i. Automatic
ii. Manual
iii. None

i. Automatic is opted for the selected voucher type, Tally allots incremental number
and cursor would not move here, and we cannot change the voucher number.
ii. If manual is specified for the selected voucher type, cursor would blink at the
voucher number field to input from keyboard we can modify the voucher number.
iii. If none is opted for the selected voucher type, voucher number field would not
appear.
c. Reference: - In sales, purchase, Debit Note and Credit Note vouchers, we get
this field just below voucher type, to input any reference we would like to
input.
It’s a free field and we can apply it in our convenient way .We can filter
vouchers on the basis of information entered at this field.
 Right side :-
a. Date: Date of voucher is displayed in dd-month-year format at the right corner.
 b. Day: Day of the voucher is displayed just below the Date for convenience. This
helps us to track if any voucher is entered on weekly holiday.
c. Effective date.
2. Body part :-
Transaction data is entered in the Body part of voucher.
 To / By ( or Dr/ Cr )
 Ledger Account
 Amount
 Narration
 Saving voucher
(Or)
Steps Invoke in voucher entry:
a) Date
b) Voucher type
c) Ledger Accounts
d) Accounting Rules
e) Balance
f) Dr ,Cr and Narration
g) Accept “ Yes ”
Types of Voucher:
I. Receipt Voucher :
Receipt voucher is used to enter all receipts of cash or bank (Receipt by
cash or Receipt by cheque or Receipt by demand draft). Even the amount received
for the sale of fixed assets.
(E.g.) Furniture, Machinery, etc. must be treated as Receipt Voucher. Press F6
function key to enter the Receipt Voucher.
Rules for Receipt Voucher:-
Debit Credit
a] Cash A/c a] The Giver of money
b] Bank A/c or
Sundry debtors
b] Income Received

c] Cash sales of Fixed Assets

e.g. Furniture, machinery
etc.

From the following transactions, prepare Receipt Voucher entries for the Bharathwaj & Co.
i. Rs.5000/- the amount received from Mr. Kumar.
ii. Rs.2000/- cheque and Rs.500/- cash given by star & co.
iii. Rs.1500/- commission received by cash.
iv. Rs.1000/- cash sales on Waste machinery.
v. Rs. 2,500/- received for interest by cheque.
Trans A/c Involved Nature of A/c Debit/Credit Explanation
(i) Kumar A/c Personal A/c Credit The Giver
Cash A/c Real A/c Debit Cash comes in
 (ii) Star&Co. A/c Personal A/c Credit The Giver
Cash A/c Real A/c Debit Cash comes in
Bank A/c Personal A/c Debit Bank Cheque Received
(iii) Commission A/c Nominal A/c Credit Incomes & gains
Cash A/c Real A/c Debit Cash comes in
(iv) Waste Machinery A/c Real A/c Credit Waste machinery goes out
Cash A/c Real A/c Debit Cash comes in
(v) Interest Received A/c Nominal A/c Credit Incomes and gains
Bank A/c Personal A/c Debit Bank cheque Received
Now 5 transactions are entered in the Receipt Voucher by following steps:
 Gateway of TallyTo choose voucher entryvoucher creation
 Short cut key , by using function key F6
 Also press F2 function key to enter the date.

II. Payment Voucher :

Payment voucher records all the payments made through Bank and Cash.
Even the amount paid for the purchase of Fixed Assets like purchase of Machinery,
Land, Furniture etc.Cheque Printing is done only through payment voucher entry.
Rules for payment voucher:
Debit Credit
a) The Ledger a/c of the receiver a) Cash A/c
Or
Sundry Creditors
b) Expense A/c b) Bank A/c
c) Any cash purchase of Fixed Assets
e.g. Land, Machinery etc.
From the following transactions, prepare payment Voucher entries for the
Bharathwaj&Co.
i. Rs.4500/- paid for Bonus.
ii. Rs.2000/- cheque paid for salaries.
iii. Rs.450/- paid for Electric charges.
iv. Rs.1150/- paid for Telephone bill by KVB bank Cheque.
v. Rs.3000/- purchase on Furniture. Here Rs.2000/- Canara bank cheque paid and
Rs.1000/- paid by cash.
vi. Rs.1000/- paid to M/s.Chitra &Co.
Trans A/c Involved Nature of A/c Debit/Credit Explanation
(i) Bonus A/c Nominal A/c Debit Expenses & Loses
Cash A/c Real A/c Credit Cash goes out
(ii) Salary A/c Nominal A/c Debit Expenses & Loses
Bank A/c Personal A/c Credit Cheque given
(iii) Elect charges A/c Nominal A/c Debit Expenses & Loses
Cash A/c Real A/c Credit Cash goes out
(iv) Telephone charges A/c Nominal A/c Debit Expenses & Loses
KVB A/c Personal A/c Credit Cheque given
(v) Furniture A/c Real A/c Debit Furniture comes in
 Canara A/c Personal A/c Credit Bank cheque given
Cash A/c Real A/c Credit Cash goes out
(vi) Chitra & Co.A/c Personal A/c Debit Receiver of the money
Cash A/c Real A/c Credit Cash goes out.
Press F5 function key in the Voucher Creation screen to enter the payment voucher.

III. Contra Voucher :-

Cash or cheque deposited into the bank, cash withdrawn from bank, then
transfer of funds from one Bank account to another Bank account are entered in
Contra Voucher .Here debit and credit accounts are cash a/c and Bank a/c.

CASH A/c vs. BANK A/c

 If the cash amount is deposited into the bank, then Bank A/c will be debited and
Cash A/c will be credited.
 If the cash amount is withdrawn from the Bank, then Cash A/c will be debited and
Bank A/c will be credited.
 If ‘A’ Bank cheque is deposited into ‘B’ Bank A/c will be debited and ‘A’ bank
will be credited.

From the following transactions, prepare a Contra voucher entries for the Barathwaj&Co.
i. Rs.2500/- cash deposited into Contra Bank.
ii. Rs.500/- cash withdraw from Canara Bank.
iii. Rs.5000/- Demand draft of State Bank of Mysore deposited to Canara Bank.
iv. Rs.1500/- Canara Bank cheque and Rs.750/- cash deposited to Karnataka Bank.
v. Rs.1000/- of Canara Bank cheque given to Karnataka Bank for fund transfer.
vi. Rs.250/- cash withdraw from Karnataka Bank for local expenses.
Tran A/c Involved Nature of A/c Debit/Credit Explanations
(i) Canara Bank A/c Personal Debit Cash Received
Cash A/c Real Credit Cash goes out
(ii) Canara Bank A/c Personal Credit Cash Given
Cash A/c Real Debit Cash comes in
(iii) SB Mysore A/c Personal Credit DD Given
Canara A/c Personal Debit DD Receiver
(iv) Cash A/c Real Credit Cash goes out
Canara Bank A/c Personal Credit Cheque Given
Karnataka Bank A/C Personal Debit Cash & Cheque Receiver
(v) Canara Bank A/c Personal Credit Cheque Giver
Karnataka Bank A/c Personal Debit Cheque Receiver
(vi) Cash A/c Real Debit Cash comes in
Karnataka Bank A/c Personal Credit Cash Giver
Press F4 function key in the Voucher Creation Screen to enter the contra voucher.

IV. Journal Voucher :

A journal Voucher is an adjustment Voucher. The amount adjusted
between two Ledgers accounts are entered in the Journal Voucher. Here Purchase
 Return, Sales Return, Depreciation on Fixed Assets etc. are entered through the
journal Voucher.
Here Journal Voucher is three types namely
(a) Journal Voucher
(b) Credit note voucher (sale Return)
(c) Debit note Voucher (Purchase Return).
(a) Journal Voucher: It is for adjustments between two ledgers. Here outside parties
like e.g. Debtors, Creditors, and Branches/Divisions are not involved.
Depreciation on fixed assets like machinery, furniture, motorcars etc. are
involved in this journal voucher.
(b) Credit note voucher (Sales Return): In business, due to certain reasons like delay
in delivery, goods damaged, overcharging etc. in which goods are return (sales
return) from Sundry debtors. The adjustment between sundry debtors A/c and
Sales Return A/c are entered in this Credit note Voucher.
(c) Debit note Voucher (Purchase Return): In business, due to certain reasons like
delay in delivery, goods damaged, overcharging etc. in which goods are return
(Purchase return) from Sundry Creditors. The adjustment between sundry
creditors A/c and Purchase Return A/c are entered in this Debit note Voucher.

From the following transactions, prepare a journal voucher, credit note voucher and debit
note voucher.
i. Depreciation Rs.2000/- on Machinery and Rs.500/- on Building is to be
entered.
ii. M/s. Gokul &Co. returns the goods worth Rs.500/- as damaged goods.
iii. Rs.1200/- worth goods Purchase return to M/s.Arasan &Co. due to late in
delivery.
iv. The Purchase goods worth Rs.502.80/- return back to M/s.India cement for
excess supplying.
v. Rs.750/- worth of sold goods return back from the M/s.Jain &Co.
vi. A fund transferring is made for adjustment in business by barrowing
Rs.3000/- from Mr. John Agency and given to M/s.Jain&Co.
Tran A/c Involved Nature of A/c Debit/Credit Voucher type Explanation
1. Dep. A/c Nominal Debit Journal Expenses & Loses
Machinery A/c Real Credit Voucher Cash goes out
Building A/c Real Credit Cash goes out
2. Gokul&Co.A/c Personal Credit Credit note The Giver of goods
voucher
Sales Return A/c Real Debit Sold goods comes in
3. Arasan & Co A/c Personal Debit Debit note Received the goods
voucher
Purchase Return A/c Real Credit Purchase goods goes
out
4. Indian cement A/c Personal Debit Debit note Received the goods
Purchase Return A/c Real Credit voucher Purchase goods goes
out
5. Jain&Co A/c Personal Credit Credit note The Giver of goods
 voucher
Sales return A/c Real Debit Sold goods comes in
6. John Agency A/c Personal Credit Journal The giver of money
Jain & Co. A/c Personal Debit voucher Receiver of money
Press F7 function key in the Voucher Creation screen.

V. Sales Voucher :-
Sales voucher records all entries related to sales made in the regular course
of business (not sale of fixed assets of the office) will be entered in this voucher. Sales of
fixed assets must be entered through Receipt voucher and not in Sales voucher.

In business, Sales are made on credit or cash. Tally allows the users to
enter both cash and credit sales. Here Ledger A/c of the Buyer or Customer or Sundry debtors
is debited and sales A/c are credited. Also, Discount given to customers is debited and duties
of taxes, packaging & forwarding charges of the Sales A/c are credited.

Sales voucher are very much useful in Inventory information because, it

changes the values or quantities in the stock item. The stock items going for sales or to delete
the item are entered in the Sales voucher.

Rules for sales voucher:

Debit Credit
a) The Ledger A/c of the Buyer or Customers a) Any sales A/c
or Sundry debtors or Receiver
b) Discount on sales b) Duties of taxes, packaging and
forwarding charges of sales
product.
From the following transactions, prepare a sales voucher entry for Barathwaj&Co.
i. Rs.50, 000/- worth cement sales to M/s.Gokul & Co.on cash with the
following additional charges.
a) Local sales tax 4%
b) Central sales tax 2%
c) Pack & Forwarding charges Rs.750/-
ii. Rs.450/- worth bricks sold to M/s.Jain & Co.
iii. Paint sales worth Rs.10, 000/- to M/s.Jhon agency and given discount 5%.
iv. Cement sales Rs.7, 000/-worth to M/s.Jain & Co. and charged 3% for Local
sales tax.
v. Cement sales Rs.7, 500/- to M/s.Gokul & Co. and allow Rs.500/- discount for
cash sales.
Trans A/c Involved Nature of A/c Debit/Credit Explanation
(i) Gokul & Co.A/c Personal Debit Receiver of the product
Cement Sales A/c Real Credit Cement goes out for sales
Local Sales Tax A/c Nominal Credit Incomes & Profit
Central sales tax A/c Nominal Credit Incomes & Profit
Pack & forw. A/c Nominal Credit Incomes & Profit
(ii) Jain & Co. A/c Personal Debit Receiver of the product
 Bricks sales A/c Real Credit Bricks goes out for sales
(iii) John Agency A/c Personal Debit Receiver of the product
Paint sales A/c Real Credit Paint goes out for sales
Discount A/c Nominal Debit Expenses & Loses
(iv) Jain & Co. A/c Personal Debit Receiver of the product
Cement Sales A/c Real Credit Cement goes out for sales
Local Sales Tax A/c Nominal Credit Incomes & Gains
(v) John Agency A/c Personal Debit Receiver of the product
Cement sales A/c Real Credit Cement goes out for sales
Bricks Sales A/c Real Credit Bricks goes out for sales
(vi) Gokul & Co.A/c Personal Debit Receiver of the product
Bricks sales A/c Real Credit Bricks goes out for sales
Discount A/c Nominal Debit Loses & Expenses
Press F8 Function key in the voucher creation screen to enter sales voucher.

VI. Purchase Voucher :-

Purchase voucher records all entries related to purchase in our business.
Purchase voucher is opposite to Sales voucher. Purchase made in the regular course
of business will be entered in this voucher. Purchase of fixed assets must be entered
through Payment voucher and not in Purchase voucher.

In business, Purchases are made on the credit or cash basis. Tally allows
us to enter both cash and credit purchase in our business. Purchase voucher very
much useful in Inventory information because, it changes the values or quantities in
the stock item. If we want to purchase stock or to add the stock items are done in the
Purchase voucher.

Rules for Purchase voucher:

Debit Credit
a) Any Purchase A/c a) The Ledger A/c of the Giver or
Supplier or sundry creditors.
b) Duties of taxes, packaging and b) Discount given by supplier.
forwarding charges of purchase
product.

From the following transactions, prepare a Purchase voucher for Barathwaj&co.

i. M/s Ramco cement supplied Rs.2, 00,040/-worth cement and allowed discount
3% for cash purchase.
The additional charges are charged for purchase as follows:
a) Local Sales Tax 4%
b) Packing & Forwarding charges Rs.2000/-
 ii. M/s.Arasan&Co.supplied Rs.75, 000/- worth bricks and allowed Rs.1000/-
discount for the purchase.
iii. Computer Purchase worth Rs.30, 000/-and printer purchase worth Rs.5000/-are
both purchased from excel systems. Additional Packaging &Forwarding charges
Rs.1000/-are made for purchase.
iv. Accounting software worth Rs.22, 000/-purchased from Data systems.
v. M/s.India cement supplied Rs.1, 00,020/-worth cement and allowed discount
Rs.5, 000/-for cash purchase.
Tran A/c Involved Nature of A/c Debit/Credit Explanation
(i) Ramco cement A/c Personal Credit The giver of the product
Cement Purch A/c Real Debit Cement comes in
Discount A/c Nominal Credit Incomes & Gains
Pack & Forw A/c Nominal Debit Loses & Expense
Local sales tax A/c Nominal Debit Loses & Expense
(ii) Arasan & Co. A/c Personal Credit The giver of the product
Bricks Purch A/c Real Debit Bricks comes in
Discount A/c Nominal Credit Incomes & Gains
(iii) Excel Sys A/c Personal Credit The giver of the product
Comp purchase A/c Real Debit Computer comes in
Printer Purch A/c Real Debit Printer comes in
Pack & Frow A/c Nominal Debit Expense & Loses
(iv) Data Sys A/c Personal Credit The giver of the product
Software A/c Real Debit Software comes in
(v) India cement A/c Personal Credit The giver of the product
Cement Purch A/c Real Debit Cement comes in
Discount A/c Nominal Credit Incomes & Gains
Press F9 Function key in the Voucher creation screen to enter the Purchase voucher.

VII. Memo Voucher :-

 Memo voucher is a purely non-accounting voucher, the entries in this voucher
does not affect the accounts. The entries in the voucher are not pasted into the
ledger. So, they do not affect the final result of the company. Tally stores
memo voucher in a separate register called Memo Register. Suspense Account
like travelling expenses, Postdated cheque given or received are come under
this Memo Voucher.
 For example, a Travelling expenses suspense account Rs.1, 500/-is given to
sales executive in advance. Until and unless the expenses are incurred, the
actual expenditure details cannot be worked out. A Memo voucher can be
entered for advance and can be turned to a payment voucher after receiving
the details of the expenditure incurred. These transaction is entered in Memo
voucher as follows in next page:
 Press F10 Function key in the Voucher creation screen to enter the Memo
Voucher.

Display a Voucher:
 In a day, many transactions of accounts are entered in Tally through Voucher entry.
If you want to see the Voucher entries follow the below step.

 In the Gateway of Tally ,select Display option. The Display menu displays as follows:

Display Menu

Trial Balance

Account Books
Statements of Accounts

Day Book
List of Accounts

Exception Reports

Quit

 Choose Day Book option from the Display menu.

 Press Alt+F1 keys to see voucher entries in details.

Alter a Voucher:

Gateway of Tally Display  Day Book Enter  Alter.

Delete a Voucher:

Gateway of TallyDisplay Daybook Alt+D Enter (‘Y’ or

‘N’).
Insert a Voucher:

Gateway of Tally Display Daybook Alt+I.

Purchase and Sales Order:
Purchase Order:
 Purchase department in manufacturing and trading organizations usually face the
problem of the deciding the ‘quantity of various items’ which they should purchase.
 If purchase of materials is made in bulk then inventory-carrying cost will be high and
also it affects the working capital of the organization.
 On the other hand if order size is small each time, then the ordering cost will be high,
which will indirectly affect the working capital of the organization.
 A purchase order can be easily generated by Tally and same can be directly sent to the
supplier. The order position can be seen in the stock summary.
 In order to minimize the ordering and carrying costs it is necessary to determine the
order quantity, which minimizes these two costs. The size of the order for which both
ordering and carrying cost are minimum is known as Economic order Quantity.
 In Tally, order processing is linked to inventories.
 We can track the order position of a stock item; know what goods that were ordered
have arrived, whether we have fulfilled the orders on time and what the delay, if any is.

Purchase Order Processing or Creating a Purchase Order:

1. Gateway of Tally Select voucher entryAlt+F4 Purchase Order.

2. Voucher Date : 02/12/2021
3. Party’s A/c Name: Type the first alphabet of the supplier’s Ledger Account to have a
popup list of the entire supplier’s Ledger Account.
4. Order No: - The voucher no. will be our Purchase Order Number.
5. Name of the item: - Specify the stock item for which the order is being placed. Once the
name is given the item allocations sub screen pops-up that needs to be filled in. ( Alt
and C key )
6. Due on: - The due date for Delivery of the item.
7. Location: - Select the godown from the popup list of godowns.
8. Quantity, Rate and Amount: - Specify the Quantity of item required, their Rate and the
Amount due etc.
9. Rate of Duty:-Specify the TaxRate.It may be Freight, Tariff, etc. Allocate the Group
Duties and Taxes to the Ledger Tax.

Altering a Purchase order:-

We can alter a purchase order by displaying it from variety of places but is easier
through the purchase order Box or the Day Book.

Shortcut Key:

Gateway of Tally  Display  Day Book.

(Or)
Gateway of Tally, Display, Inventory Books, Purchase Order Book.

Deleting a Purchase Order:-

Gateway of Tally  Display  Day Book  Select the Purchase Order to be deleted and
Press Alt + D.

Sales Order:
Creating a Sales Order or Sales Order Processing:-

1. Gateway of Tally  Inventory voucher (or) Voucher Entry  Alt+F5 Select sales
order.
2. Voucher Date, Party’s Account Name.
3. Order No: - The Voucher number will be our internal serial Number.
4. Name of Item
5. Due Date
6. Location
7. Quantity, Rate & Amount
8. Accept the rest of the details and Accept Yes.

Altering a Sales Order:-

Gateway of Tally Display  Day Book.
Deleting a Sales Order:-
Gateway of Tally  Display  Day Book  Select the Sales Order to be deleted
and Press Alt + D.

Viewing Order Position :-( Stock summary)

Gateway of Tally Stock summary  Detailed (F1)

Currently, all we see is the closing balances or stock in hand as on the last day of the
period.

1. Press the Orders Button (Alt+F7)

2. Select sales Order outstanding.
3. Type No for Due Orders only. We are now in sales order outstanding screen showing on
order items. Of course, we have only ASP & ASP under DEC on order.
 4. Select the line DEC & Press Enter. The outstanding sales order for ASP & JSP under
DEC, Client /server is detailed.
5. Select F12: Configuration
6. Select yes to all options.
7. We will now see our Order Analysis with sales and purchase orders outstanding
positions for the stock item if both orders are present.
8. Return to the stock summary screen.
9. Select Detailed.
10.Press Alt+n Auto column button.
11.Select Orders and stock Details.
12.Remove rate and item from display by configuring it using F12.This will enable all
columns to fit in one screen.
13.We may further drill down into each column to view greater details.

Adjust Order:-
We adjust orders at the time of raising delivery notes and invoices.

1. Select voucher entry.

2. Select purchase  purchase.
3. Enter a Purchase invoice no.
4. Voucher Date, Party’s A/c Name
5. Name of the item
6. Tracking number: Not applicable as goods are accompanying the bill.
7. Order No: Select the Order number.
8. All fields are filled up.
9. Now enter as we would normally in a purchase voucher.
10.Accept Yes.
11.Once the orders are adjusted, if we view in stock summary there are no purchase orders
Due.
12.Go to Display Inventory Books  Purchase Order Book.
13.Go to Display  Statement of Inventory  Purchase Order summary will display only
when there are outstanding orders.
14.Similarly adjust for sales order and view the order position.

Invoices:-
 The differences between an Invoices and voucher are that in Invoices the stock
information is primary while the Accounting information is secondary, but the reverse
is applicable to vouchers.
 The Invoice format for sale Invoice, allows automatic calculations of Taxes & Duties on
Items.
Invoice Entry:

Perform the following steps to have the sales invoice on the screen .

1. Gateway of Tally  Accounting vouchers.

2. Press F8 key or click on the button F8: Sales on the Button Panel to select sales
voucher.
3. Now press Ctrl+V keys together or click on the button As Invoice on the Button panel
for sales Invoice. The As Invoice button toggles between As Voucher and As Invoice.

Invoice Configuration:

1. Press F12: Configure button on the Button panel to have the invoice configuration
screen.
2. Now set Y or N for the various options on the above screen to enable or disable them.

Configuring Invoice printing:

1. Gateway of Tally  F12: Configure Printing Sale Transactions  Sales Invoice.

2. Make the required changes to have the Invoice in a desired format.

Printing Invoices / Vouchers:

 To select the invoice or voucher

 Then display the voucher
 Finally Invoice / voucher to be printed.
 (Select /Display the Invoice or Voucher / Invoice to be printed).
 Short cut key Alt+P.

Optional and Regular Voucher:

1. This is also a non-accounting voucher but this is not a separate voucher type.
2. An existing voucher may be marked optional.
3. An optional voucher does not affect your account; the data gets stored in to Optional
register.
4. You can regularise this voucher by again clicking on Optional button on the button
panel as it toggles between Optional and Regular options.
5. Optional vouchers are useful in recording doubtful or incomplete transactions.

Balance Sheet

Meaning of Balance Sheet:

 Balance sheet is a statement of the financial position of the company.

 Balance sheet is not an account but only a statement containing the Assets and
liabilities of a business on a particular period.
  Balance sheet has two sides, on the left hand sides shows Liabilities and on the Right
hand side shows Assets.
 The liabilities include Capital Account, Current Liabilities, Loan Liabilities, and Net
Loss etc.
 The Assets include Fixed Assets, Current Assets, Investments, Loans and advances
(Assets), Net loss etc.

Definition of Balance Sheet:

The American Institute of certified public Accounts defined that “A list of balances
of the Asset and liability accounts. This list depicts the position of assets and liabilities of a
specific business at a specific point of time”.

Configuration of Balance Sheet:

 Follow the below steps to enter Balance Sheet.

 Gateway of Tally Balance Sheet. The Balance Sheet screen will be display.

Balance Sheet Barathwaj&Co.

Ctrl+M

Barathwaj&Co. Barathwaj&Co.
Liabilities As at1-Apr- Assets As at1-Apr-
2003 2003

Capital A/c Fixed Assets

xxxxx.xx xxx.xx
Loans ( Liability ) Current Assets
Current Liabilities xxxxxx.xx
xxxxxx.xx
Profit &Loss A/c
xxxxxx.xx
Opening Balance
Current Period xxxxxx
Diff. in Open.Bal.
xxx.xx

1
more…
1
more…
Total Total
x,xx,xxx.xx x,xx,xxx.xx
 Press Alt+F1 keys to see the detailed information of the Balance sheet.
 Press F2 function key to display the Balance Sheet for a specific period of time.
 Press F7 function key to change the method of valuation.
 Press Alt+V keys to see the Balance Sheet for more than one open company. Also press
Alt+D keys to close the opened company.
 Press Alt+P keys to print the Balance Sheet.
 Press F12 function key to see the configuration of the Blance Sheet.

Configuration
Show vertical Balance Sheet ? No
Profit or Loss, both as liability ? Yes
Show percentage ? No
Show working capital figures ? No
Methods of showing Balance Sheet ? Liabilities/Assets
Appearance of Names ? Name only
Sales factor for values ? Default
 F10: Allows you to directly invoke Accounting Reports menu without going back to
Gateway of Tally screen.

Profit and Loss Account:

 Profit and Loss account considers all such expenses and incomes and also gives the net
profit made or loss suffered by a business during a particular period.
 The profit figure disclosed by the profit and Loss account for a particular period can be
compared with that of the other period.
 It helps whether the business in being run efficiently or not and also helps the business
in planning the future course of action.
  Follow the below steps to enter profit and loss account in Tally:-
 Gateway of tally Profit & Loss Account. Profit & Loss Account will be
display.

Profit & Loss Account Barathwaj&Co.

Ctrl+M

Barathwaj&Co. Barathwaj&Co.
Particulars For 1-Apr- Particulars For 1-Apr-
2003 2003

Opening stock Sales accounts

xxxxx.xx xxxxx.xx
Purchase accounts
xxxxx.xx Closing Stock
Gross profit c/o xxxxx.xx
xxxxx.xx
xxxxx.xx
xxxxx.xx
Gross Profit b/T
Indirect Expenses xxxx.xx
xxxx.xx Indirect Incomes
Nett Profit xxxxx.xx
xxxxx.xx

Total Total
xx,xxx.xx xx,xxx.xx

 Press Alt+F1 keys to see the detailed profit & Loss Accounts as shown below.
 Press F2 function key to display the Profit & Loss Account for a specific period
of time.
 Press F7 function key to change the method of valuation.
 Press Alt+C keys to see the Profit & Loss Account for more than one open
company. Also press Alt+D keys to close the opened company.
 Press Alt+P keys to print the Profit & Loss Account.
 Press F12 function key to see the configuration of Profit & Loss Account.
 Configuration
Show vertical Profit & Loss ? No
Show percentage ? No
Show with Gross Profit ? No

Appearance of Names ? Name only

Sales factor for values ? Default

Inventory Allocation:-

If the purchase and sales voucher are to be considered in financial transaction along with
inventory details. You need to enable the option “Inventory Values are affected in ledger
master”.

The inventory details that you give in on along voucher (Like sales and purchase voucher)
affect stocks by immediately updating them, only if tracking number is not activated in F11:
Company Features.

The information that you need to give in the inventory allocation sub-screen depend on the
features enabled for the company.

Inventory Allocation for : Purchase

Name of the Item Quantity Rate Per Amount
Item AB 100 no’s 1000 100 1000
End of List

Name of Item:-Select the item from the list from the list of items or create a new item by
pressing Alt+C.

Quantity: - We have to specify the quantity of stock item, which is purchased or sold.

Rate: - Enter the Rate for the stock item, If you have entered standard rate for the item, the
voucher will select the relevant standard rate for date by default. You can modify it while
entering the voucher.

Per: - Enter the unit of measure for the quantity of the item here. This can be the main unit or
even the alternate unit.

Amount: - The quantity multiples by the rate per unit is the amount.

End of list :- In all multiple allocation or S

UNIT-IV

Trial Balance
Meaning of Trial Balance:

 In Trial Balance the various debit and credit balances of the different accounts are taken
in a statement, Trial balance is a statement containing the various ledger balances on a
particular date.
 Trial Balance forms the basis for preparing financial statements such as Income
statements, Profit & Loss account, Ratio Analysis and Balance Sheet.
 The position of a particular ledger account can be judged simply by looking at the Trial
Balance.
 Follow the below steps to enter Trial Balance in Tally.
 Select Display option in the Gateway of Tally.
 Select Trial Balance of the sathya&co., displays as follow.

Trial Balance Barathwaj & Co Ctrl +

M
Barathwaj & Co
For 1-Apr-2013
Particulars Closing Balance
Debit Credit
Capital Account
xxxxx
Current Liabilities xxxxx
xxxxx
Fixed Assets xxxxx
xxxxx
Current Assets xxxxx
Sales Accounts xxxxx
xxxxx

24
more…
Grand Total xxxxxx
xxxxxx
 Press Alt + F1 keys to see the detailed Trial Balance.
 Press F2 function key to display the trial Balance for a specific period of time.
 Press Alt + P keys to print the Trial balance.
 Press F4: Group: To get the Group summary of a group. Trial Balance shows on
primary groups and their balances.
(Gate way of Tally Account Info.  Group Summary)
 F5: Led wise : to have alphabetical list of all Ledger accounts and their balances
in Trial balance.
 F9 is Inventory Reports
 F10 is Accounting Reports
  Press F12 function key to see the configuration of Trial Balance.

Configuration
Show Opening Balance ? No
Show Transaction ? No
Show Closing balance ? Yes
Show Percentage ? No
Appearance of Names ? Name only
Scale factor for values ? Default
Sorting Method ? Default
Expand all Levels in detailed format ? No

Account Books:
 This is the third option in the Display menu.
 Gate way of Tally  Display  Account Book.
GATE WAYOF
TALLY
Display Menu
Account Books
Cash / Bank Book(s)

Ledger

Group Summary
Group Vouchers

Sales Register
Purchase Register
Journal Register

Quit

1. Cash / Bank Books:-

 Cash Book Displays all cash accounts under the group cash in hand.
 Bank Book displays all bank accounts under the group Bank accounts.
 Follow the below steps to enter Cash / Bank Books.
 Select Display option in the Gateway of Tally.
 Select Accounts Books in the Display menu.
 Choose Cash/Bank Book(s) option in account books. The
Cash/Bank summary displays in next page
2. Ledger :-
3.