What is Accounting?

Accounting is an art of recording, classifying and summarizing in a significant manner.

Introduction to Tally

* Late 80’s and early 90’s was an era of Financial Accounting Software.

* Many software developers offered separate Financial and Inventory Software to take

care but users wanted a single software where if a invoice is entered that will update

Accounts as well as Inventory information.

* Business accounting activities of an organization may be classified into two clear

broad categories.

# Financial Accounting

# Inventory Management

* Tally is a Financial Accounting and Inventory Management System.

* Tally is one of the leading Accounting Software with large user base in India and

abroad, which is continuously growing.

* Tally is developed in India using Tally Development Language (TDL). Tally is

developed by Tally Solutions Pvt. Ltd., Bangalore.

Features of Tally

* One of the leading accounting packages

The first version of Tally was released in 1988 and through continuous

development is now recognized as one of the leading accounting packages across

the globe (world), with over 50,000 users and still growing.

* Accounting without codes

Many computerized accounting packages require numeric codes for maintaining

the data. But Tally pioneered “No accounts codes” concept. So you can allocate

meaningful names to their data.

* Comprehensive Accounting

Maintains complete range of Books of Accounts, Final A/c’s like Balance Sheet,

Profit & Loss A/c, Cash flow, Trial Balance and others.

TALLY FREE TRAIL :-

Youtube link :- https://www.youtube.com/watch?v=O0RPcdRSabY&t=23s

The Tally Start-Up Screen

Quitting Tally

Press “Esc Key” until you see the message, Quit Yes/No.

Press [Enter] or press [Y] or click on [Yes] to Quit tally.

Alternatively Exit without confirmation press “Ctrl + Q” in Gateway of tally.

Creating a Company

Youtube link :- https://www.youtube.com/watch?v=pbHQ89cffaI&t=10s

To Create Company Details

Name

Name of the company as it will be known to Tally. If we have several companies to

create with similar names, we will need to distinguish between them to provide a unique

name for Tally. Name can exceed the visible space but not exceeding 51 characters.

Mailing Name

The correct name of the company for mailing purposes. We may give different mailing

name. This name may be printed in all Financial Statements.

Address

Address of the company. Tally will automatically adjust the spacing between the

characters and lines entered to ensure the details fit the space available.

Country

Select the name of the country.

State

Select the name of the state.

Pin Code

Type the pin code of the address.

Contact Details

Type the contact details of the company.

Financial Year from

Enter beginning date of the financial year for which we wish to keep accounts. For

example for the financial year 2008 - 2009 type as 01-04-2008. Books are closed exactly

12 months after this date.

Books Beginning from

The date from which we actually wish to maintain our accounts in Tally. By default this

is the date we specify for the Financial Year Beginning. We may however give a different

date to maintain books only from that date.

For example, our financial year may start from 01-04-2008, but we may decide to start

accounting on Tally only from 01-06-2008 onward so give this date here.

Use Security Control

We get 2 choices, Yes or No. If we don’t want security respond No. If we want security

control, respond Yes, we will be prompted to enter the Name of Administrator and

Password each of 15 characters maximum.

Base Currency Information

Base Currency Symbol

Specify symbol to denote our Base Currency. For Indian Company accept Rs. (appears as

default).You cannot assign a duplicate currency symbol for a company in Tally.

The Key combinations for a few currency symbols are given below:

1. Alt + 156 –Pound Sterling - £

2. Alt + 0165 – Japanese Yen - ¥

3. Alt + 0128 – Euro - €

4. Use the Dollar ($) and the Rs. Symbol from the keyboard

Maintain

We get two options to maintain accounts, namely.

1. Accounts only.

2. Accounts with Inventory.

Accounts

As the transactions fall into three categories, Accounts are also of three types.

1. Personal Account

2. Real Account

3. Nominal Account

Youtube link :- https://www.youtube.com/watch?v=ZUVFMn6fQPU

Personal Account

It deals with the accounts related to Persons. These are accounts of Individuals, Firms,

Companies, Banks and Co-operative Concerns. The proprietor (owner) being an

individual his Capital A/c and his Drawings A/c are also known as “Personal Accounts”.

Eg: Bala Account, Drawing Account etc.,

Real Account

It deals with the accounts related to the Properties. A business concern has certain

Property, Goods, and Assets.

Eg: Cash Account, Machinery Account, Purchase Account, Sales Account, etc.,

Nominal Account

While a business is carried on, many types of expenses are met. For eg., Salary for the

staff, Rent for the Building, Advertisement, Electricity Charges, Telephone Charges etc.

Similarly various types of incomes are received. Commission, Interest, Dividend etc., For

each of these items an Account is maintained. These are Nominal Accounts.

Any transaction as we known has two aspects.

1. Debit

2. Credit

Personal Account

Debit The Receiver

Credit The Giver

Real Account

Debit What comes in

Credit What goes out

Nominal Account

Debit All expenses and losses

Credit All incomes and gains

Examples:

Personal Account

Vishnu Traders started business with cash Rs. 1,00,000.

Dr: Cash 1,00,000

Cr: Vishnu Capital 1,00,000

Real Account

Purchase goods from Rekha Textiles Rs. 5000 on credit.

Dr: Purchase goods 5000

Cr: Rekha Textiles 5000

Nominal Account

Paid salary Rs.2500

Dr: Salary 2500

Cr: Cash 2500

Vouchers

We record a transaction through a Voucher entry. Tally is pre-programmed with a variety

of accounting vouchers, each designed to perform a different job. Tally provides a list of

18 voucher types.

TYPES OF VOUCHERS :-

Youtube link :- https://www.youtube.com/watch?v=AhblhhEQ1PQ&t=4s

1. Contra

2. Credit Note

3. Debit Note

4. Payment

5. Physical Stock

6. Purchase

7. Purchase Order

8. Receipt

9. Receipt Note

10. Delivery Note

11. Journal

12. Memorandum

13. Rejection In

14. Rejection Out

15. Reversing Journal

16. Sales

17. Sales Order

18. Stock Journal

F4 : Contra Voucher

In Contra Voucher we can enter transaction between Cash and Bank Accounts.

Deposited into SBI bank Rs. 5000/-

Dr: SBI Bank 5000

Cr: Cash 5000

F5 : Payment Voucher

All tran sactions related to payment are recorded in Payment Voucher.

Paid Rent Rs.5000/-

Dr: Rent 5000

Cr: Cash 500

F6: Receipt Voucher

All inflow of money are recorded through Receipt Voucher.

(i) Received commission Rs.500

Cr: Commission (received) 500

Dr: Cash 500

(ii) Mr. Vinay started business with cash Rs.50,000

Cr : Vinay Capital 50,000

Dr : Cash 50,000

F7 : Journal Voucher

Journal voucher is an adjustment voucher, used for non-cash transactions like adjustment

between ledger accounts, Provision for liabilities, Depreciation & all other provisions are

common examples of Journal Voucher. When buys assets or expenses on credit, we can

enter this details in this voucher. Pass a journal voucher when we want to adjust amount

between two or more ledger accounts, without affecting Cash or Bank accounts.

Depreciate 10% on Furniture (Cost 5000).

Dr : Depreciation 500

Cr : Furniture 500

F8 : Sales Voucher

Any sales transactions are entered in Sales Voucher.

Sold goods to Lakshmi Mills Rs.12,000 on credit.

Dr: Lakshmi Mills 12,000

Cr : Sold Goods 12,000

F9 : Purchase Voucher

Any purchase transactions are entered in Purchase Voucher.

Purchase goods from Kumar Textiles Rs.7500 on credit.

Cr : Kumar Textiles 7500

Dr : Purchase Goods 7500

Ctrl+F8 : Credit Note Voucher

Sales Return transactions are entered in Credit Note Voucher.

Bharathan return goods worth Rs. 200

Dr : Sales Return 200

Cr : Bharathan 200

Ctrl+F9 : Debit Note Voucher

Purchase Return transactions are entered in Debit Note Voucher.

Return goods to Lakshman Rs. 500

Dr : Lakshman 500

Cr : Purchase Return 500

List of ledgers frequently used and their respective groups

Youtube link :-https://www.youtube.com/watch?v=3eE3r2ljL3Q&t=5s

Name of Ledger (Under Which Group)

Vijay Capital A/c (Capital)

Vijay Drawings A/c (Capital)

Credit Purchases (Purchases)

Cash Purchases (Purchases)

Purchases Return (Purchases)

Cash Sales (Sales)

Credit Sales (Sales)

Sale Return (Sales)

Rent (Indirect Expenses)

Salaries (Indirect Expenses)

Conveyance (Indirect Expenses)

Postage (Indirect Expenses)

Printing & Stationery (Indirect Expenses)

Staff Welfare (Indirect Expenses)

Conveyance (Indirect Expenses)

Electricity charges (Indirect Expenses)

Electrical Expenses (Indirect Expenses)

Telephone charges (Indirect Expenses)

Bank Charges (Indirect Expenses)

Office Expenses (Indirect Expenses)

Furniture (Fixed Asset)

Depreciation (Indirect Expenses)

Power & Fuel (Direct Expenses)

Freight Charges (Direct Expenses)

Carriage Inwards (Direct Expenses)

Carriage Outwards (Indirect Expenses)

Petty Cash (Cash in Hand)

Bank Interest (Indirect Income)

Indian Bank (Bank Accounts)

Any Customer (Sundry Creditor)

Any Supplier (Sundry Debtor)

Wages (Direct Expenses)

Sales Tax (Duties & Taxes)

Tax Deducted At Source (Current Liabilities)

Stock (Stock-in-hand)

Land & Building (Fixed Asset)

Debentures (Current Liabilities)

Secured & Unsecured Loans (Current Liabilities)

Provision for Depreciation (Current Liabilities)

Accounts Only Sums (Expamples)

Journal Entry Youtube link :-https://www.youtube.com/watch?v=3eE3r2ljL3Q&t=5s

Journal Entry + GST Youtube link :-https://www.youtube.com/watch?v=qd0G6ApcJgI

Sum :1
Enter the voucher entry and prepare the balance sheet for following transactions.
1. Merit & Co started business with cash Rs. 50,000
2. Purchase Goods from Ram & Co for Rs. 30,000 on Credit
3. Sold Goods to Ravi & Co for Rs.20,000 on Credit
4. Purchase goods from Devi & co for Rs.20,000 on credit
5. Sold goods for Rs.35,000 on cash
6. Paid Cash to Ram & co Rs. 20,000
7. Received Cash from Ravi & Co Rs. 10,000

Balance Sheet