Tally - 9

(Tally is a Financial Accounting and Inventory Management system)

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

Terms Used in Accountancy

 Transaction  Sales
 Debtor  Sales Return
 Creditor  Invoice
 Account  Voucher
 Goods  Capital
 Purchase  Drawing
 Purchase Return  Discount, etc.,

Transaction
Transactions are those activities of businessmen which involve transfer of money or
goods between two persons or two accounts. These activities may be in the nature of
purchase goods, sale of goods, borrowing from a bank, lending of money to another
trader, payment of certain business expenses such as salary or rent and receipt of certain
incomes like commission or dividend (bonus, Share).

Transactions are of two types

1. Cash transaction
2. Credit transaction

Cash Transaction
When Vinay buys goods from Balaji Traders paying the price of the goods immediately,
it is a Cash transaction.

Credit Transaction
If Vinay does not pay immediately, but promises to pay later, it is known as Credit
transaction.

Debtor
A person who receives a benefit without giving money or money’s worth is a Debtor.
Dr. is the abbreviation of debtor.

Creditor
A person who gives a benefit without receiving money or money’s worth is a Creditor.
Cr. is the abbreviation of Creditor.

Account
It is a statement of the various dealings which occur between a customer and the firm.

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Goods
This is a common term used by businessman. It indicates the articles purchased for the
purpose of re-sale.
Eg. For a Furniture Mart selling chairs and tables, Furniture is considered as Goods.
Other articles which the Furniture Mart keeps in the shop for its own use such as
type-writer, a wall clock and a cycle for Office use are not Goods; they are known as
“Assets” of the business house.

Purchases
These are the goods bought by the traders in order to sell them to his customers.

Purchase Returns
Out of the purchase made by a shop - keeper, a portion may be of poor quality. He has to
return those defective goods to the suppliers. They are known as “Purchase Returns” or
“Return Outwards” or “Returns to Suppliers”.

Sales
These are goods sold out. They are known as “Business turn over”. When goods are sold
for cash, businessmen call them “Till Takings”, meaning thereby “Cash Sales”.

Sales Returns
When the Trader receives back the goods which he has already sold, he calls them as
“Sales Returns” or “Return Inwards” or “Returns from Customers”. The buyers are not
satisfied and therefore they return the goods.

Invoice
While making a sale, the seller prepares a statement giving the particulars such as the
quantity, price per unit, the total amount payable and deductions made and shows the net
amount payable by the buyer. Such a statement is called an invoice.

Voucher
It is a written document in support of a transaction. It is a proof that a particular
transaction has taken place for the value stated in the voucher. Voucher is necessary to
audit the accounts.

Capital
It refers to the amount invested by the proprietor (owner) for running the business.

Drawing
Cash or goods taken by the owner of the business for his personal use.

Discount
An allowance or a deduction allowed from an amount due is discount. Discount payable
is an expense of the organization whereas discount received is an income.

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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.

 Integrated, Non integrated accounting and inventory

With tally, the user is able to choose which parts of the system to use
accounting, inventory or both.

 Provides multiple reports in diverse (various) formats.

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 Maintains single location or multi location stocks. Multiple units of measure for each
item.
 Multiple currencies in the same transaction and viewing all reports in one or more
currency.
 Allows accounts of multiple companies simultaneously.
 Financial year may span any period.
 Prints online.
 Backup & Restore of Data
 Allows Import and Export of data from or to other systems.
 Online help
 Security control
 By owner
 By data entry
 Tally is not event driven i.e we cannot switch from one task to another. We cannot cut
and paste to and from clipboard, cannot access the taskbar.

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The Tally Start-Up Screen

Title Bar

Gateway of Tally

Buttons
Toolbar

Calculator Area

Status Bar

Tally Screen Components

The Gateway of Tally screen can be classified in to following parts.

1. Title Bar 3. Buttons Toolbar 5. Status Bar

2. The Main Area 4. Calculator Area

Title Bar
Display the Company name that created Tally i.e “Tally solutions” and the website of
Tally company.

The Main Area (Gateway of Tally - Ctrl+M)

Display menus, screens and reports, and also accepts the choices and options we select.

Buttons Toolbar
Display buttons for interaction with tally and the buttons differ from screen to screen.

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Calculator Area (Ctrl+N)
To do calculations calculator is used. Ctrl+N is used to activate the calculator and Ctrl+M
to deactivate the calculator.

Status Bar
The Status bar is divided into four panels.
1. The First panel displays the list of all steps we have come across to come to the
active screen. For Eg. If we are in the Balance Sheet it displays
“Gateway of Tally  Balance Sheet”.
2. The Second panel displays the Version and Release of Tally Software.
3. The Third panel displays the Date in a long format.
4. The Fourth panel displays the time.

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

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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.

Statutory Compliance For

Select the name of the country. The Statutory obligations differ from country to country.

State
This option should be used when VAT is to be implemented.

Pincode
Type the pincode of the address.

Telephone Number
Type the Telephone number of the company.

E-mail
The E-mail Address of the company.

Currency Symbol
This tells Tally the symbol to use for monetary values. Enter Rs. here.

Maintain
We get two options to maintain accounts, namely
1. Accounts only
2. Accounts with Inventory

While Accounts with Inventory enables to maintain both Inventory and Financial
Accounts simultaneously, we have option also to maintain only Accounts.

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.

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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.

Tally Vault Password

Tally Vault is an enhanced security system, which allows for encryption of the company
data. Encryption means converting normally accessible Tally information into
unrecognizable information, which can be reconverted by authorized persons. Give the
password here and repeat the same.

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

Formal Name
Enter complete name of the currency. For India, Enter “Indian Rupees” here.

Number of Decimal Places

Specify number of decimal places required for the currency (range 0 to 4). For Indian
Rupees it is 2.

Is Symbol Suffixed to Amounts

Responding Yes will place currency symbol after the amount, example: 1000 Yen.
No will place symbol before the amount, as in case of Indian Rupees, example.
Rs.10,000

Symbol for decimal portion

Type the name of the Decimal portion of the currency. For Indian Rupees it is Paise.

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Show amounts in Millions
Responding Yes will display large amounts formatted (separated by commas) in Millions
format, No will display as Lakhs & Crores.

Put a space between Amounts and the Symbols

Respond Yes if we wish to put a space between amount and currency symbol. If we don’t
want any space in-between, respond No.

Decimal Places for Printing Amounts in Words

Type a number for the number of Decimal places to be printed in words.

Accounts

Accounts

Personal Impersonal

Real Nominal

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

1. Personal Account
2. Real Account
3. Nominal Account

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.

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 Any transaction as we known has two aspects.
1. Debit
2. Credit

Type of Account Debit Credit

Personal Account The Receiver The Giver
Real Account What comes in What goes out
Nominal Account All expenses and losses 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
(i)Paid salary Rs.2500 (ii)Received commission Rs 500
Dr: Salary 2500 Dr: Cash 500
Cr: Cash 2500 Cr: Commission 500

Example of using Type of Accounts, Rule, Debit, Credit:

Type of Debit /
Account Rule
Account Credit
Receiver Debit
Capital account Personal A/c
Giver Credit
Purchase Goods A/c Real A/c What comes in Debit
Sold Goods A/c Real A/c What goes out Credit
Cash (Received) A/c Real A/c What comes in Debit
Cash (Paid) A/c Real A/c What goes out Credit
Assets A/c[purchased buildings, machines etc. ,] Real A/c What comes in Debit
Assets A/c [sold] Real A/c What goes out Credit

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 Type of Debit /
Account Rule
Account Credit

Expenses
(Salary, Rent, Advertisement, EB, Interest,
Insurance Premium, Wages, Telephone Charges, Nominal A/c All expenses and
Debit
Carriage Inwards, Bank Charges, Stationery, losses
Office Expenses, Traveling Expenses, Postage,
Staff welfare, conveyance, etc.,)

Incomes
(Rent, Commission, Discount, Interest, Nominal A/c All incomes and gains Credit
Dividend)
Purchase return A/c Real A/c What goes out Credit
Sales return A/c Real A/c What comes in Debit

Accounting with Tally

 All financial transactions are recorded at the level of detail you specify.
 Tally has the capacity to handle millions of transactions more than you are ever likely
to need.
 Accounts and the Ledgers they contain are specified as affecting Assets, Liabilities,
Incomes or Expenses.
 The voucher number is automatically assigned by Tally when entering every voucher.
 Tally can produce Profit and Loss Account and Balance Sheet immediately after each
transaction has been entered.
 Difference between the sum of all debit amounts and the sum of all credit amounts
provides the balance of accounts.
 Debit and Credit entries in the books are kept separate to highlight the effect of each
transaction.

Pre-Defined Groups of Account

 Tally provides a list of 28 predefined groups.(Primary–15, Sub Group–13)
 Ledger is the actual account head to which we identify a transaction.
 We pass all accounting voucher entries using ledgers. All ledgers have to be classified
into group.
 Tally also has pre-defined ledger for Cash (cash in hand) and Profit and Loss
(Primary).

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 First 9 items on the list of the pre-defined group below affect the Balance Sheet and
final 6 items affect the Profit and Loss account.

1. Capital Account 5. Investment

 Reserves and Surplus 6. Loans [Liability]
2. Current Assets  Bank OD Account
 Bank Account  Secured Loans
 Cash-in-hand  Unsecured Loans
 Loans and Advances 7. Suspense Account
 Stock-in-hand 8. Miscellaneous Account
 Sundry Debtors 9. Branch/Division
 Deposits (Assets) 10. Sales Account
3. Current Liabilities 11. Purchase Account
 Duties and Taxes 12. Direct Incomes
 Provisions 13. Indirect Incomes
 Sundry Creditors 14. Direct Expenses
4. Fixed Assets 15. Indirect Expenses

1. 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, Drawing
A/c and so on.

Reserves and Surplus [Retained Earnings]

It is the subgroup of Capital Account. This contains ledgers like Capital Reserve, General
Reserve, Reserve for Depreciation and so on.

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

Bank Accounts
It contains all types of bank accounts. Open ledgers like current, savings, short-term
deposit accounts, and so on.

Cash-in hand
Tally automatically creates one Cash A/c under this group. You can open more than one
cash account, if necessary. Open ledgers like Petty cash, Cash at branch, etc.,

Deposits (Asset)
Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company
(not received by the company, which is a liability).

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Loans & Advances (Asset)
For all loans given by the company and advances of a non-trading nature. Open ledgers
like employees loan account, employees advance account, advance against salaries, or
even for purchase of Fixed Assets, etc., We do not recommend you to open Advances to
Suppliers’ account under this Group.

Stock-in-hand
This holds the values for the opening and closing stock of that account. For example,
accounts called Raw Materials, Work-in-Progress and Finished Goods could be opened
here.

Sundry Debtors
For your customer accounts. A person who receives a benefit without giving money or
money’s worth immediately.

3. 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, TNGST (TamilNadu Government
Sales Tax) and other trade taxes.

Provisions
Accounts like Provision for Taxation, Provision for Depreciation and so on are recorded
under Provisions.

Sundry Creditors
For trade creditors of the company. A person who gives a benefit without receiving
money or money’s worth immediately.

4. Fixed Assets (Immovable Properties)

Examples of ledgers that may be opened under this group are Type Writer, Computer,
Furniture, Motor Cycle etc.,

5. 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.

6. Loans (Liability)
Loans that a company has borrowed, typically long-terms loans.

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Bank OD Accounts [Bank OCC Accounts]
Tally gives two distinct types of Bank Accounts, The Bank OCC A/c is meant to record
the company's overdraft accounts with banks. e.g., Bill Discounting A/cs, which are
operated on a day to day basis.

Secured Loans
Term loans or other long / medium term loans, which are obtained against security of
some asset.

Unsecured Loans
Loans obtained without any security. Example: Loans from Directors/partners or outside
parties.

7. Suspense Account
A number of large corporations use a Suspense Ledger to track moneys paid or received,
the nature of transaction which is not yet known. The most common example is money
paid for Traveling expenses.

8. Miscellaneous Expenses (Asset)

A rarely used group. Open ledgers like Repair of furniture, building maintenance,
machinery maintenance, etc.,

9. Branch/Divisions
This group is provided to keep the ledger accounts of all companies that are your
company's branches, divisions, affiliates (partner), sister concerns, subsidiaries etc.,

10. Sales Account

For different sales (Credit or Cash) accounts. You may even open an account Sales
Returns under this group. Please do not open customer accounts under this group.

11. Purchase Account

For different purchase (Credit or Cash) accounts. You may even open an account
Purchase Returns under this group. Please do not open customer accounts under this
group.

12. Direct Income

These are Non-trade income accounts that affect Gross Profit. All trade income accounts
fall under Sales Accounts. It is an income which includes items such as interest,
commission, discount received, etc., You may also use this group for accounts like
Servicing Contract Charges that follow sales of equipment.

13. Indirect Income

These are miscellaneous (various) non-sale income accounts. Example: Rent Received
and Interest Received, etc.,

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14. Direct Expenses
These are Manufacturing or direct trading expenses. These accounts determine the Gross
Profit of the company. Example: Daily wages, Factory Rent, Stock Fire policy, Packing
charges, etc.,

15. Indirect Expenses

For all other administrative, selling or non-direct expenses. Eg. Advertisement,
Telephone Charges, Rent, Traveling expenses, EB charges, Stationary, Salary, etc.,

List of ledgers frequently used and their respective groups

Name of Ledger Under Which Group

Mcec Capital Capital
Abinaya Capital A/c Capital
Abinaya 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

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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
Tally provides twin options to Create, Display, Alter Ledgers, Single Ledger and
Multiple Ledgers.

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.

1. Contra 10. Delivery Note

2. Credit Note 11. Journal
3. Debit Note 12. Memorandum
4. Payment 13. Rejection In
5. Physical Stock 14. Rejection Out
6. Purchase 15. Reversing Journal
7. Purchase Order 16. Sales
8. Receipt 17. Sales Order
9. Receipt Note 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 transactions related to payment are recorded in Payment Voucher.
Paid Rent Rs.5000/-
Dr: Rent 5000
Cr: Cash 5000
F6: Receipt Voucher
All inflow of money are recorded through Receipt Voucher.

(i) Received commission Rs.500

Cr: Commission (received) 500
Dr: Cash 500

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 (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

If you enter the Return entries, activate the following feature:

F11  Accounting Features

Use Debit/Credit notes - Yes

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

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 Accounts Only Sums

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

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Sum :2
Enter the voucher entry and prepare the balance sheet for following transactions.

1. John started business with cash Rs. 1,00,000

2. Open Current A/c in Canara Bank Rs. 50,000
3. Purchase goods for Rs.3000 on cash
4. Sales to Arun Rs.2000 on credit
5. Sold goods to Avilash Rs. 5000 on credit
6. Typewriter purchase Rs. 2000
7. Paid cash for required 2 machines Rs. 1000
8. Receive Cheque from Arun Rs.1000
9. Received Commission Rs. 1000
10. Bought steel cash box from Godrej & Co paid by cheque Rs.2000
11. Received damaged goods return by Avilash 1500

Balance Sheet

Sum : 3
Journalise the following transactions in the journal of Thiru. Anabalagan.
01-04-2008 Anabalgan Commenced business with a capital of Rs. 50,000/-
02-04-2008 Bought goods for cash Rs. 30,000
03-04-2008 Sold goods for cash Rs. 25,000

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03-04-2008 Deposited in Indian Bank Rs. 20,000
04-04-2008 Bought goods from Ravichandran Rs. 15,000
05-04-2008 Bought furniture for cash Rs. 2,000
05-04-2008 Sold goods to Mr. Narasimhan Rs. 20,000
06-04-2008 Narasimhan returned goods worth Rs. 1,000
07-04-2008 Paid advertisement charges Rs. 2,000
08-04-2008 Returned goods to Ravichandran Rs. 1,500
09-04-2008 Withdrew cash from Bank Rs. 5,000
09-04-2008 Bought a bicycle for Office use Rs. 1,500
10-04-2008 Received commission Rs. 500
11-04-2008 Drew cash for personal use Rs. 3,000
11-04-2008 Electric charges paid Rs. 300
12-04-2008 Paid Insurance Premium Rs. 1,000
13-04-2008 Interest received Rs. 150
14-04-2008 Paid Rent Rs. 1,200
16-04-2008 Paid salaries Rs. 4,800
18-04-2008 Paid commission Rs. 300
20-04-2008 Purchase typewriter for Rs. 800 from the Re-Mington And Inc on credit
25-04-2008 Sold goods to Kumar & Co for Rs.800 on cash

Balance Sheet

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Sum: 4
Allied Traders started the business from 01/04/2008

01-04-2008 Received Capital By cash Rs.2,00,000 /-

01-04-2008 Cash Deposited in Bank Rs.50,000/-
05-04-2008 Credit Purchases from Krishna Traders Rs.20,000 (Inv No. 12)
05-04-2008 Credit Purchases from Pravin Traders Rs.20,000 (Inv No. 43)
10-04-2008 Credit Purchases from Krishna Traders Rs.20,000 (Inv No. 14)
10-04-2008 Credit Purchases from Pravin Traders Rs.20,000 (Inv No. 44)
10-04-2008 Returned Goods to Krishna Traders Rs.5,000 (Inv No. 12)
12-04-2008 Returned Goods to Pravin Traders Rs.5,000 (Inv No. 44)
15-04-2008 Credit Sales to Ravi & Co Rs.50,000 (Inv No. 1)
15-04-2008 Credit Sales to Kumar & Co Rs.50,000 (Inv No. 2)
15-04-2008 Cash Sales Rs.20,000 (Inv No. 3)
17-04-2008 Credit Sales to Ravi & Co Rs.50,000 (Inv No. 4)
17-04-2008 Credit Sales to Kumar & Co Rs.50,000 (Inv No. 5)
17-04-2008 Goods returned by Ravi & Co Rs.5,000 (Inv No. 1)
17-04-2008 Goods returned by Kumar & Co Rs.5,000 (Inv No. 5)
20-04-2008 Payment made by cheque to Krishna Traders Rs.30,000 Ch.No.153154
20-04-2008 Payment made by cheque to Pravin Traders Rs.30,000 Ch.No.153155
20-04-2008 Received cheques from Ravi & Co Rs.75,000 Ch.No.302302
20-04-2008 Received cheques from Kumar & Co Rs.75,000 Ch.No.116210
Payments made by Cash:
25-04-2008 Paid to Petty cash By Cash Rs.1,000
25-04-2008 Furniture Purchased Rs.20,000
25-04-2008 Salaries paid Rs.10,000
25-04-2008 Rent Rs.4,000
25-04-2008 Electricity Charges Rs.3,000
25-04-2008 Telephone Charges Rs.3,500
25-04-2008 Cash Purchases Rs.5,000
Payments made by Petty Cash:
30-04-2008 Conveyance Rs.150
30-04-2008 Postage Rs.100
30-04-2008 Stationeries Rs.200
30-04-2008 Staff Welfare Rs.100
Journal:
30-04-2008 Stationeries Purchases from Sriram & Co Rs.1500 on Credit.
30-04-2008 Depreciation on Furniture 10%

21
 Balance Sheet

Sum: 5
Journalise the following transactions in the journal of Mr. Arumugaswamy
1. Started business with Rs. 75,000
2. Goods purchased Rs. 7,000
3. Goods sold Rs. 5,000
4. Goods purchased from Kannan Rs. 20,000
5. Goods sold to Subramanian Rs. 25,000
6. Goods returned to Kannan Rs. 500
7. Goods returned from Subramanian Rs. 1,000
8. Opened an account in Indian Bank Rs. 15,000
9. Drew from bank Rs. 3,000
10. Subramanian settled his account
11. Furniture purchased Rs. 3,000
12. Settled Kannan’s account
13. Insurance Premium paid Rs. 300
14. Electric charges paid Rs. 250
15. Drew for personal use Rs. 1,000
16. Salaries paid Rs. 1,200
17. Received five chairs from Saravana Stores at Rs.300 each
18. Paid Cash to Saravana Stores

22
 Balance Sheet

Sum: 6
Vishnu, Siva and Hari decide to start business of Export Garment at chennai. Journalise
the transactions which have been extracted from their books.
01-04-2008 Contributed capital Rs.
Cash: Vishnu - 3, 00,000
Siva - 2, 00,000
Hari - 70,000
Land: Hari - 50,000
Goods worth - 10,000
02-04-2008 Opened a Bank Account - 2, 60,000
03-04-2008 Paid for factory shed by cheque Rs. 25,000
04-04-2008 Paid for machines by cheque Rs. 1, 20,000
05-04-2008 Bought cloths on credit from Lakshmi Mills Rs. 60,000
06-04-2008 Bought for cash from Mettur Mills 50,000
07-04-2008 Sold to Abraham Lincoln of America On credit Rs. 90,000
08-04-2008 Paid for stationery Rs. 1,000
09-04-2008 Withdrew by cheque for personal use
Vishnu - 5,000
Siva - 7,000
Hari - 4,000

23
10-04-2008 Withdrew cash for office use Rs. 20,000
11-04-2008 Paid salaries Rs. 7,000
Balance Sheet

24
 Accounts with Inventory

Inventory accounting includes recording stock details, the purchase of stock, the sale of
stock, stock movement between storage locations/Godowns, and providing information
on stock availability. With Tally, it is possible to integrate the inventory and accounting
systems so that financial statements reflect the closing stock value from the inventory
system.
To activate the following options:

Company Creation  Maintain  Accounts with Inventory

F11  Inventory features
Integrate Accounts with Inventory - Yes
Allow Invoicing - Yes
Enter Purchase in Invoice - Yes
F12 configure  Select Accts/Inv. info from the menu
Allow Std. Rates for Stock Items - Yes
Stock Groups
We classify stock items into stock groups based on any common feature.

Units of Measure
We will need to create units of measure for stock items. These can be simple units such
as nos, metres, kilograms, pieces or compound units such as box of 10 pieces or 1 dozen
is 12 nos.

25
Stock Items
Stock items are the actual items in stock, and we account for the issued and receipts of
stock at this level.

Sum :1
Royal Electricals Started a Business of Electrical Items and Home Appliances from
01.04.2008
1.4.2008 Received Cash for Capital 5,00,000
1.4.2008 Deposited in Uco Bank 2,00,000
7.4.2008 Credit Purchases from Govind Electricals In No.123
Items Quantity Rate
Ceiling Fan 100 Nos 800
Table Fan 100 Nos 1000
Mixie 100 Nos 1500
Grinders 100 Nos 2000
10.4.2008 Credit Sales to Ram Electricals – Inv No 1
Items Quantity Rate
Ceiling Fan 70 Nos 1000
Table Fan 70 Nos 1500
Mixie 70 Nos 2000
Grinders 70 Nos 2500
(+) TNGST 4 % on Total Sales
10.4.2008 Cash Sales Inv no 2
Items Quantity Rate
Ceiling Fan 10 Nos 1000
Table Fan 10 Nos 1500
Mixie 10 Nos 2000
Grinders 10 Nos 2500
(+) TNGST 4 % on Total Sales
(-) Cash Discount (-5) %

26
15.4.2008 Paid Cheque to Govind Electrical Rs. 2,00,000
15.4.2008 Received Cheque from Ram Electrical Rs. 3,00,000

20.04.2008 Payments made by Cash

Paid to Petty Cash Rs. 2,000
Furniture Rs. 15,000
Salaries Rs. 10,000
Wages Rs. 7,000
Carriage Inward Rs. 1,500

25.4.2008 Payment made by Petty Cash

Conveyance Rs. 200
Postage Rs. 150
Stationaries Rs. 150
Staff Welfare Rs. 200

30.4.2008 Depreciate 10% on Furniture

Answer
Stock Group
 Electrical Items
 Home Appliances

Unit of Measure NOS

Stock Items
Item Name Under Units Purchase Price Selling Price
Ceiling Fan Electrical Items Nos 800 1000
Table Fan Electrical Items Nos 1000 1500
Mixie Home Appliances Nos 1500 2000
Grinder Home Appliances Nos 2000 2500

27
Balance Sheet

28
Sum : 2
Following is the Balance Sheet as at 31-3-2008 of Prem Trading Company.

Liabilities Asset
Capital Rs. 1,00,000 Furniture Rs. 18,000
Computer Rs. 30,000
Sundry Creditors Sudry Debtors

Prakash & Co Rs. 30,000 Ram&Co Rs. 10,000

Ramesh & Co Rs. 20,000 Rs. 50,000 Ravi&Co Rs. 20,000 Rs. 30,000
Loan Closing Stock Rs. 10,600

Sharma Rs. 38,600 Ceiling Fan

2nos @ 800/-
Table Fan
2nos @ 1,000/-
Mixie
2nos @ 1,500/-
Grinders
2nos @ 2,000/-

Cash at SBI Rs. 80,000

Cash On Hand Rs. 20,000
Total 1,88,600.00

5.4.2008 Purchase from Prakash&Co Company Invoice No: 100

Ceiling Fan 50 nos Rs. 800

Table Fan 50 nos Rs. 1,000
Mixies 50 nos Rs. 1,500
Grinders 50 nos Rs. 2,000

7.4.2008 Purchase From Ramesh & Co., Invoice No: 15

Ceiling Fan 50 nos Rs. 800

Table Fan 50 nos Rs. 1,000
Mixies 50 nos Rs. 1,500
Grinders 50 nos Rs. 2,000

10.4.2008 Credit Sales Ram & Co., Invoice No: 1

Ceiling Fan 35 nos Rs. 1,000

Table Fan 35 nos Rs. 1,500
Mixies 35 nos Rs. 2,000
Grinders 35 nos Rs. 2,500

29
10.4.2008 Credit Sales Ravi & Co., Invoice No: 2

Ceiling Fan 35 nos Rs. 1,000

Table Fan 35 nos Rs. 1,500
Mixies 35 nos Rs. 2,000
Grinders 35 nos Rs. 2,500

(+) TNGST 4 % on Total Sales

12.4.2008 Cash Sales Invoice No: 3

Ceiling Fan 25 nos Rs. 1,000

Table Fan 25 nos Rs. 1,500
Mixies 25 nos Rs. 2,000
Grinders 25 nos Rs. 2,500

(+) TNGST 4 % on Total Sales

(-) Cash Discount (-5)%

15.4.2008
Cheque Payment to Prakash & Ramesh 70% of the Purchase Value.
Received Cheque from Ram & Ravi 80% of the Sales Value

17.4.2008 Payment made by Cash

Paid to Petty Cash - 2,500

Salaries - 15,000
Wages - 10,000
Electricity - 7,000
Telephone Charges - 3,000
Carriage Inwards - 5,000
Carriage Outwards - 4,000

17.4.2008 Payment made by Petty Cash

Conveyance - 500
Staff Welfare - 300
Postages - 200
Stationaries - 800

20.4.2008
Cash With drawn from Bank Rs. 1,00,000/-

25.4 .2008
Cash Deposited in Bank Rs. 80,000/-

30
30.4.2008
Stationary Purchase from Priya Stores for Rs. 1,500 on Credit

Depreciation
10% on Furniture
20% on Computer

Balance Sheet

31
Sum : 3
Light Roofing LTD is a manufacturer of Roofing Sheets started a business from 1-4-2008

1-4-2008 Received cheque from capital Rs. 8,00,000

1-4-2008 Cash Withdrawn from SBI Rs. 2,00,000

5-4-2008 Purchase of Raw materials from IOC ( Invoice No : 58)

Asphalt 3 MT Rs. 5,000
HSD 3 MT Rs. 5,000
SMT 3 MT Rs. 4,000

5-4-2008 Purchase from Murugan Waste Paper company ( Invoice No : 43)

Waste paper 3 MT Rs. 3,000

5-4-2008 Purchase from Radiant Traders ( Invoice No : 63)

Red Oxide 50 ltr Rs. 20
10-4-2008 Consumption ( Raw materials )
Asphalt 1.225 MT
HSD 1.225 MT
SMT 1.225 MT
Waste paper 1.225 MT
Red Oxide 25 ltr

10-4-2008 Production (Finished Goods)

6 feet Roofing Sheets 2000 Nos of Rs. 60
4 feet Roofing Sheets 2000 Nos of Rs. 50
4 feet Plain Sheets 2000 Nos of Rs. 50
3X2 Plain Sheets 700 Nos of Rs. 30

12-4-2008 Credit sales to Usman Brothers (Invoice No: 1)

6 feet Roofing Sheets 1500 Nos of Rs. 80
4 feet Roofing Sheets 1500 Nos of Rs. 70
4 feet Plain Sheets 1500 Nos of Rs. 70
3X2 Plain Sheets 300 Nos of Rs. 50

13-4-2008 Cash sales (Invoice No: 2)

6 feet Roofing Sheets 300 Nos of Rs. 80
4 feet Roofing Sheets 300 Nos of Rs. 70
4 feet Plain Sheets 300 Nos of Rs. 70
3X2 Plain Sheets 200 Nos of Rs. 50

(+) TNGST 4 % on Total sales

(-) Cash Discount -5%

15-04-2008 Payments made by cheque to IOC Rs. 25,000

Murugan Waste Paper company Rs. 5,000

32
20-4-2008 Payments made by cheque to IOC Rs. 17,000
Murugan Waste Paper company Rs. 4,000

20-4-2008 Received cheque from Usman Brothers Rs. 2,00,000

25-4-2008 Payments made by Cash

Paid to Petty Cash Rs. 3,000
Furniture Rs. 30,000
Computer Rs. 30,000
Salaries Rs. 10,000
Wages Rs. 5,000
Carriage Inward Rs. 3,000
Rent Rs. 5,000
Electricity Rs. 2,800
Telephone Rs. 2,200

27-4-2008 Payments made by Petty Cash

Conveyance Rs. 500
Postages Rs. 300
Staff Welfare Rs. 200
Stationaries Rs. 200
Answer
Stock Group
i. Raw Materials
ii. Finished Goods

Unit of Measure

Symbol Formal Name Number of Decimal Places

Nos Numbers 0
Ltr Litres 0
Mt Meters 3

Stock Items

Item Name Under Units Purchase Price Selling Price

Asphalt Raw Materials Mt 5000
HSD Raw Materials Mt 5000
SMT Raw Materials Mt 4000
Waste Paper Raw Materials Mt 3000
Red Oxide Raw Materials Ltr 20
6 feet Roofing Sheets Finished Goods Nos 80
4feet Roofing Sheets Finished Goods Nos 70
4 feet Plain Sheets Finished Goods Nos 70
3X2 Plain Sheets Finished Goods Nos 50

33
Balance Sheet

34
 Inventory Only

Inventory Details in Vouchers

Tally inventory vouchers perform the same function in the inventory system as
accounting vouchers in Tally accounting, i.e., they are the means by which we enter
transactions. In this case, the vouchers record the receipt and issue of stock, the transfer
of stock between godowns, and physical stock adjustments.

Pure Inventory Vouchers

Pure Inventory vouchers are those that do not affect financial records. They affect stocks
and stocks will rise or fall when such vouchers are entered.

The different pure inventory vouchers are:

1. Receipt Note – Alt + F9 (Purchase Account)

2. Delivery Note – Alt + F8 (Sales Account)
3. Rejection In – Ctrl + F6 (Sales Return)
4. Rejection Out – Alt + F6 (Purchase Return)
5. Stock Journal – Alt + F7 (Godown Transaction)
6. Physical Stock – Alt + F10 (Suspense Account)

To activate the following options:

Company creation  Maintain  Accounts with Inventory

F11  Inventory Features

Maintain Multiple Godowns - Yes
Use Tracking Numbers (Delivery/Receipt) - Yes
Use Rejection Inward/Outward Notes - Yes

F12 Select Accts/Inv. info from the menu

Allow Std. Rates for Stock Items - Yes

Receipt Note Voucher

For recording goods received. For example, the company receives new stock from a
supplier.

Description Records Receipt of new stock from suppliers.

Reference, ledger account, supplier’s name and address, name of stock
Details Recorded item, godown, quantity, rate, amount, narration.

35
Delivery Note Voucher
For recording goods delivered to a customer. For example, the company delivers goods
from stock to a customer.

Description Records the delivery of goods to customers.

Reference, ledger account, customer’s name and address, name of stock
Details Recorded
item, godown, quantity, rate, amount, narration.

Rejection-in Voucher
For recording goods received back that was rejected by the customer. For example, the
company takes back into stock items rejected by a customer.

Description Records returns of goods by customers.

Reference, ledger account, customer’s name and address, name of stock
Details Recorded
item, godown, quantity, rate, amount, narration.

Rejection-out Voucher
For recording of goods that are rejected and returned to a supplier. For example, the
company returns items that had previously been taken into stock to the supplier.

Description Records return of goods to suppliers.

Reference, ledger account, supplier’s name and address, name of stock
Details Recorded
item, godown, quantity, rate, amount, narration.

Stock Journal Voucher

For recording stock transfers from one location to another. For example, the company
transfers items of stock from the warehouse to the shop.

Description Records the transfer of stock from one Godown to another.

Names of from and to godowns, name of stock item, quantity, rate,
Details Recorded
amount, narration.

Physical Stock Voucher

For recording actual stock as physically verified or counted. For example, stock found on
conducting a stock-check. It is not unusual that the company finds a discrepancy between
the actual stock and the computer stock figure.

Description Records the Physical stock count as the new stock balance
Details Recorded Name of stock item, godown, quantity.

36
Sum: 1
JC Computer Supplies Inventory Transactions
Information need to create the stock items.

Stock Cost W’House On-site Total Value Retail

SYSTEMS
P133 750 7 1 8 6000 940
P166 MMX 900 13 2 15 13500 1130
P200 MMX 1030 10 2 12 12360 1290
PARTS
Motherboards
MBP 133 240 0 2 2 480 320
MBP 150 285 0 6 6 1710 380
MBP 166 335 0 10 10 3350 450
CD-ROM Drives
Eight Speed
Gold-8 45 0 2 2 90 60
Silver-8 55 0 4 4 220 70
Bronze-8 60 0 4 4 240 80
Ten Speed
Gold-10 75 0 25 25 1875 100
Silver-10 95 0 20 20 1900 130
SOFTWARE
Ace
Database – A 175 0 10 10 1750 250
Spreadsheet – A 155 0 15 15 2325 220
King
Database – K 100 0 7 7 700 150
Spreadsheet – K 140 0 8 8 1120 200
Queen
Database – Q 210 0 10 10 2100 300
Spreadsheet – Q 70 0 4 4 280 100
50000

Date Transaction Details

6/5/2008 Delivered 1* P200MMX computer system from On-site stock to Sharma
& Son’s.
7/5/2008 Took delivery of 2 * Database-A from Ramjilal Shyamdas
9/5/2008 Transferred 2*P200MMX computer systems from the warehouse to
On-site
13/5/2008 Returned 1*Gold-10 CD-ROM Drive (faulty) to Ramjilal Shyamdas.
15/5/2008 K.Singh & Co. Returned 1*Spreadsheet-Q Which was ordered incorrectly.
16/5/2008 Stock check reveals physcial stock of MBP133 is only 1.

37
9/6/2008 Delivered 4 * P166MMX computer systems from warehouse stock to
Sharma & Son’s
17/6/2008 Took Delivery of 5 * MBP133 from Ramjilal Shyamdas
18/6/2008 Returned 1 * MBP133 (damaged) to Ramjilal Shyamdas
1/7/2008 Took delivery of 4 * Gold-8 CD-ROM Drives from Ramjilal Shyamdas
15/7/2008 Delivered 2 * P200MMX computer systems from On-site stock to
K.Singh & Co.
24/7/2008 Stock Check Reveals physical stock of Spreadsheet-A is 13
29/7/2008 Sharma & Son’s Returned 1 * Spreadsheet - Q
30/7/2008 Transferred 2 * P200MMX computer systems from the warehouse to
On-site.

Answer
Stock Group

Systems

Parts
Mother Board
CD-Rom Drives
Eight Speed
Ten Speed
Software

Ledger Name - Under

Purchase - Purchase Account
Sales - sales Account
Sharma & Sons - Sundry Debtors
Ramjilal Shyamdas - Sundry Creditors
K.Singh & co - Sundry creditor

38
 Stock Summary

Shortcut keys in Tally

 Function Key Combination

Windows Functionality
F1 To select a company
F2 To change the current date
F3 To select the company, To copy stock group, Units, Stock items, ledgers
from one company to another
F4 To select the Contra voucher
F5 To select the Payment voucher
F6 To select the Receipt voucher
F7 To select the Journal voucher
F8 To select the Sales voucher
CTRL+F8 To select the Credit Note voucher
F9 To select the Purchase voucher
CTRL+F9 To select the Debit Note voucher
F10 To select the Reversing Journal voucher
CTRL+F10 To select the Memorandum voucher
F11 To select the Functions and Features screen
F12 To select the Configure screen

39
 Special Key Combination

Windows Functionality
ALT + 2 To Duplicate a voucher
ALT + A To Add a voucher
ALT + C To create a master at a voucher screen. When working within an amount
field, press Alt + C to act as a Calculator
ALT + D To delete a voucher / To delete a master
ALT + E To export the report in XML format
ALT + I To insert a voucher - available in Ledger vouchers in Display screen
ALT + P To print the report
ALT + R To remove a line in a report
ALT + S To bring back a line you removed using ALT + R
ALT + X To cancel a voucher
ALT + L To configure the user interface language
CTRL + A To accept a form
CTRL + Q To abandon a form – wherever you use this key combination, it quits that
screen without making any changes to it.

 Special Function Key Combination

Windows Functionality
ALT + F1 To close a company, To view detailed report (Balance Sheet)
ALT+ F2 To change the period
ALT + F3 To select the company info menu
ALT + F4 To select the Purchase Order Voucher Type
ALT + F5 To select the Sales Order Voucher Type
ALT + F6 To select the Rejection Out Voucher Type
ALT + F7 To select the Stock Journal Voucher Type
ALT+ F8 To select the Delivery Note Voucher Type
ALT + F9 To select the Receipt Note Voucher Type
ALT + F10 To select the Physical Stock Voucher Type

 Key Combination used for navigation

Windows Functionality
PgUp Display previous voucher during voucher entry/alter
PgDn Display next voucher during voucher entry/alter
ENTER To accept anything you type into a field
To accept a voucher or master
To get a report with further details of an item in a report.
ESC To remove what you typed into a field
To come out of a screen
SHIFT + ENTER To explode a line into its details
CTRL + ENTER To alter a master while making an entry or viewing a report

40
 Cost Categories and Cost Centres

Cost categories have been introduced for organization requiring allocation of resources to
parallel sets of cost centre. A cost center is any unit in an organisation to which costs or
expenses can be allocated. Cost categories and cost centres are created to allocate
expenses department wise.

Some examples of Cost Centres are

 Departments of an organisation - Finance, Manufacturing, Marketing, and so on.

 Products of a company.
 Individuals such as Salesman A, Salesman B.

To activate the following options:

Company Creation  Maintain  Accounts Only

F11  Accounting Features
Maintain Cost Centres - Yes
More than one cost category - Yes

To create Cost Category

Accounts Info  Cost Categories  Single  Create

Specify Yes to Allocate Revenue Transactions (eg., Sales, Purchase, Expenses and
Income) to cost centre that we will create under the cost categories; Specify No if we
wish to allocate Capital/Non-Revenue items only to the Cost Centre under the Cost
Category. Allocate Revenue items affect our Net Profit.

41
To create Cost Centre
Accounts Info Cost centre  Multiple Cost Centre  Create

To create Voucher Entry

Press F5  Payment and enter the following entry.

42
 Cost Centre Class

The purpose of Cost Centre Classes is to facilitate predetermined allocation of ledger

accounts (like expenses and incomes) to cost centres during voucher entry.

In cost centre class the percentage of allocation should be specified for each cost centre.
Based on the percentage the Expenses are divided automatically.

Cost centre classes affect all voucher types. In voucher entry, the allocation screen would
not appear, but allocation would be made automatically.

To activate the following options:

F11  Accounting Features

Use Pre-defined Cost Centre Allocations during entry - Yes

To create Voucher Entry

Press F5  Payment and enter the following entry.

Dr: Salary 1,00,000

Cr: Cash 1,00,000

To view the Expenses Allocation

Display  Daybook  Select the Payment Entry  Press Enter Key

43
To view the Allocation of Expenses under different cost centre:
Display  Statement of Accounts Cost Centres  Category Summary.

Exercise:

Cost Category Sales Man Products Branches

Bala Keyboard Bangalore
Cost Centre
Siva Mouse Chennai
Using cost centre and Cost category
1. Purchase Goods from Vishnu Traders for Rs. 15,000
Cost Allocation
Bangalore Branch – 5,000
Chennai Branch – 10,000
Mouse – 7,000
Keyboard – 8,000
2. Sold Goods on cash Rs. 20,000
Cost Allocation
Bangalore Branch – 7,000
Chennai Branch – 13,000
Mouse – 9,000
Keyboard – 11,000
3. Paid Cash to Vishnu Traders Rs.15,000
4. Paid Salary Rs.3,000
Cost Allocation
Bala – 1,600 Siva – 1,400

44
Answer:
Accounts Info  Cost Categories  Create
1. Salesman 2. Products 3. Branches

Accounts Info  Cost centre  Create

Salesman Products Branches

 Bala  Keyboard  Bangalore
 Siva  Mouse  Chennai

Result
Display  Statement of Accounts  Cost Centres  Category summary.

45
 Bill -Wise Details

Normally the transactions with suppliers and customers are numerous and repeating. In
most cases credit is available for some period and payment become due after credit days.
Payment is made when bill becomes overdue. Sometimes instead of making full payment
of a bill, pay part of a bill or pay a lump sum amount against outstanding bills and then
settle the account periodically.

To activate the following options:

F11: Accounting Features

Maintain Billwise details - Yes
For Non - Trading Accounts - No

Type of Reference
 Advance
 Against Ref
 New Ref
 On Account

1. New Ref: when a new bill is entered or when duplicate payment / receipt for already
cleared bill comes up – treated as New Ref.
2. Against Ref: When payment is received or made against any existing bill or a bill is
raised against earlier advance, it is entered as against reference which reduces the
outstanding amount to the extent of the adjusted amount.
3. Advance: when we make a receipt or payment as advance against a future sales/
purchases, enter as advance.
4. On Account: when payment is received or made but not against specific bill. It will
not appear while entry sales or purchase voucher.

Exercise:
1-4-2008 Ramesh Started business with cash Rs.10,000
1-4-2008 Purchase goods from kumar&co for Rs.15,000
(Pay money in 3 installment with in 15 days)
2-4-2008 Purchase goods Rs.8000 on cash
2-4-2008 Sold goods to Rathna exports for Rs.20,000
(Day will give the money into the installment with in week)
4-4-2008 Sold goods for Rs.5000 on cash
5-4-2008 Received cash from Rathna exports Rs.7,500
6-4-2008 Paid money to Kumar&co Rs.7,500
12-4-2008 Sold goods on cash Rs.5000
Result
Display  Exception Reports  Overdue Receivables/Overdue Payables

46
 Exercise Sum (Different Method)
Sum :1
From the following balances of Mr. Ramesh prepares Trading Account for the year
ending 31-03-2008

Opening Stock 1-1-2008 - 12,000

Purchases - 28,000
Carriage Inwards - 200
Sales Returns - 1,200
Purchase Returns - 1,200
Sales - 40,000
Wages - 1,500
Stock on hand on 31-12-2008 - 14,000

Profit & Loss A/c

Sum :2
From the following balances of Mr. Kumar prepares Trading Account for the year ending
31-03-2008
Capital - 20,000
Interest (Dr) - 750
Rent - 325
Tax, Insurance - 75
Machinery - 10,000
Sundry Debtors - 20,000

47
Loan on Morgage - 15,000
Wages - 15,300
Stock (01-01-2008) - 4,500
Salaries - 3,600
Bills Payable - 2,000
Loose Tools - 500
Bank Balance (Cr) - 3,450
Bills Receivable - 1,500
Sundry Creditors - 10,000
Business Premises - 20,000
Purchases - 21,000
Cash in hand - 500
Stationeries - 250
Office Expenses - 350
Sales - 48,200
Closing Stock - 4,000

Profit & Loss A/c

Sum :3
From the following balances of Mr. Kumar prepares Trading Account for the year ending
31-03-2008
Stock as On 31-3-2008 - 10,000
Capital - 40,000
Interest - 1,500

48
Rent - 650
Insurance - 150
Machinery - 20,000
Sundry Debtors - 40,000
Cash at Bank - 2,000
Bills Receivable - 3,000
Sundry Creditors - 20,000
Land - 40,000
Purchases - 42,000
Loan on Mortgage - 30,000
Wages - 30,000
Salaries - 7,200
Bills Payable - 4,000
Loose Tools - 1,000
Cash in Hand - 1,000
Stationeries - 1,200
Office Expenses - 700
Sales - 96,400

Profit & Loss A/c

49
 Currencies

 Many Organisations have transactions in more than one currency. Such transactions
have to be recorded either in the base currency or in the foreign currency.
 Tally makes it easy to manage multiple currencies, automatic calculations of
exchange rates, automatic conversion of any currency used to record a transaction to
the currency of the account, etc.
 The Balance Sheet and Profit & Loss Account of the company is maintained in the
base currency. The Default Currency is Rs.

To activate the following options:

F11  Accounting Features

Allow Multi Currency - Yes

To create a foreign Currency

Accounts Info  Currencies  Create

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

50
Rates of Exchange
Rates of Exchange is a feature wherein you can enter the rate of foreign currency for a
specific date. Foreign exchange variations occur every day with different selling and
buying rates. Rates of Exchange helps you apply the rate for the given date in your
transactions.

Accounts Info  Currencies  Rates of Exchange

To create Voucher Entry

Press F9  Purchase and enter the following entry.

Dr: Purchase $50

Cr: Cash $50

51
 Use Different Actual & billed Quantity

Normally, the billed and actual quantity is same. However the quantity delivered/received
may be different from quantity billed in some case as:

 Free Items are received or given. (For Example, 1 box of surf Excel is given free
on every 5 box of surf excel)

To activate the following options:

F11  Inventory Features
Use different actual and billed quantity – Yes

Consequently during transaction entry, we will be prompted to enter 2 quantities (Actual,

Billed). Actual quantity will update stock and Billed quantity will be used to compute
transaction value.

To create Voucher Entry

Press F9  Purchase and enter the following entry.

Track Additional Costs of Purchase

Normally in case of purchase, taxes etc, are also considered to be part of purchase and we
may wish to debit purchase account only for the entire cost. With this feature, without
debiting separate account, we may get breakup of basic price as well as additional cost
incurred, resulting into the effective rate in various inventory reports.

To activate the following options:

F11  Inventory Features

Use different actual and billed quantity - Yes
Track Additional Costs of Purchase - Yes

52
Example Transactions:
1. Purchase from Royal Textiles
Item Name Quantity Rate
T-Shirt 20 300

2. Purchase from Kishore Textiles

Item Name Quantity Rate
T-Shirt 40 275
Packing Charges – Rs.100/-

3. Purchase from Santhosh Textiles

Item Name Quantity Rate
T-Shirt 50 320
Packing Charges – Rs.150/-
Discount - (-5)%

Answer:
Pass Purchase entry for all the above 3 in voucher method

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Result
Display  Inventory Books  Movement Analysis  Stock Item Analysis

Item Movement Analysis now shows Basic Rate as well Effective Rate of each source
that helps us to find out the most economic source.

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 Order Processing

Order processing is the placing of orders with suppliers for purchase to be made from
them or receive orders from customers for the purpose of selling. In Tally, Order
Processing is linked to Inventories. Sales order entry is exactly like the Purchase Order
Entry.
Purchase Order – Alt+ F4
Sale Order – Alt+F5

To activate the following options:

F11  Inventory Features

Allow Purchase Order Processing – Yes
Allow Sales Order Processing – Yes

Example Transactions:
1. Purchase Order made to Nisha Fan House (No: 124)
Item Name Quantity Rate
Ceiling Fan 50 3000

2. Sales Order received from Anjali Traders (No: 1)

Item Name Quantity Rate
Ceiling Fan 50 3500

3. Purchase invoice raised for Order No: 124 (Quantity – 25 Nos)

4. Sales invoice raised for the Order No: 1
Answer:
To create Voucher Entry
Press Alt+F4  Purchase Order and enter the following entry.

Result
1. Display  Inventory Books  Purchase Orders Book
2. Display  Day Book
3. Display  Statement of Inventory  Purchase order summary

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 Price List

Price Lists are useful for orders and invoices. An up-to-date price list helps in decision-
making even at the lower levels of the organization and quickens the sales process. Tally
assists in creating quantity based pricing with complex discount structure.

Before you begin to create Price Lists, you should decide whether you want different
price levels. You might want different price levels for various purposes, such as different
types of customers like wholesale customers, retail customers, export customers and so
on. Each customer type could have a different discount structure.

To activate the following options:

F11  Inventory Features
Separate Discount Column on Invoices - Yes
Use Multiple Price Levels - Yes

Type out the price levels, one by one, in the Company Price Levels screen.

The Price List option appears in the Inventory Info.

Example Transaction:
1. Export Price
Chudithar Less than 20 Nos Rs. 1500
20 to 50 Nos Rs. 800 2%
More than 50 Nos Rs. 500 5%
2. Retail Price
Chudithar Less than 20 Nos Rs. 900
20 to 50 Nos Rs. 500 2%
More than 50 Nos Rs. 900 10%
3. Whole sale
Chudithar Less than 20 Nos Rs. 950
20 to 50 Nos Rs. 550 1%
More than 50 Nos Rs. 350 7%

4. Sold to Balaji Traders chudithar 100 Nos (whole sale Customer)

5. Sold to Leena Exporters chudithar 50 Nos
6. Sold to Anitha & co chudithar 25 Nos (Retail Customer)

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Answer:
From Gateway of Tally select Inventory Info and click on Price List. Select the price
level from the pop – up for example export customer and enter the data from which our
price list is applicable.

Similarly we can also set Price list for Whole sale customers and Retail customers. These
prices will automatically appear while making an invoice once the price level is specified.

To Create Voucher Entry

Goto F8  Sales and enter the example transactions.

Zero Valued entries in Voucher

Zero valued entries in vouchers are sometimes required, for example, zero rated tax, or
when we need to raise an invoice for free samples. This only means that the amount of
the entry will be zero.

To activate the following options:

F11  Inventory Features

Allow 0 valued entries in Voucher - Yes

Create a ledger account “Samples” under Sales account

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To Create Voucher Entry
Press F8  Sales and enter the following entry.

Result
1. Display  Account Books  Sales Register
2. Display  Day Book

Definition of Group Company, Split Company, Back Up, Restore

Group Company
Accounts of different companies belonging to the same management are normally
required to be consolidated to present the financial position of the group of companies as
a whole. A group company is an identity given to the merged accounts of constituent
companies of the group.

A group company can be created only for companies that have already been loaded.
Hence, we must first load two or more companies whose accounts are to be grouped.

Split Company
Split option to be selected from Company info menu. On selecting the company, Split
company data screen prompts to enter the data from which we wish to split the company.
The data we enter here would be the financial year from date for the second company. As
tally progress with split the data files, progress status is shown on the screen. Wait till the
process is over.

Back Up
The data we enter is stored on Hard Disk. A copy of the data should be kept in other
media like Floppy, CD for safety purpose. We can even store in a Hard Disk. This
process of keeping another copy of the data in another place is termed as Back Up.

Restore
Restore literally means “to bring back”. If the original data stored in the Hard Disk gets
damaged or deleted, in such situation we can copy back the data kept in Floppy or CD.
The process of getting back the earlier data in the working disk is known as Restoration
of Data. Obviously, we can restore only if we have taken Backup earlier.
Import and Export of Data

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Export of statements and Data is sometimes required by companies to carry Tally’s data
into other systems like spreadsheets and database. Import of data will cover only import
of Tally data and not data from other systems.

We might need to export information for different purposes.

 To re-import into another company run on Tally.

 To Export out for use by other programs.

To export data for re-import to Tally, we would export masters and then data.

Steps Involved

1. Create a new company & Select already existing company.

2. From Gateway of Tally  Display  List of Accounts.
3. Press Alt +E  Export. The following Screen appears.

4. In output filename, by default “Master.xml” appears, if needed change the name.

5. Export  Yes
6. Gateway of Tally  Display  Daybook
7. Press Alt +E Export. The following Screen appears.

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 8. In output filename, by default “DayBook.xml” appears, if needed change the
name.
9. Export  Yes
10. Select a new company into which the masters and data are to be imported.
11. Gateway of Tally  Import of Data  Masters. The following screen appears

12. Type the Import File Name “Master.xml” and select the necessary option under
Treatment of entries already existing.
13. All the ledgers are imported to the new company.
14. Gateway of Tally  Import of Data  Vouchers. The following screen appears.

15. Type the Import File Name to “Daybook.xml”

16. All the Voucher entries are imported to the new company.

Security Control

Tally has a very customizable security system. You can set up authority levels and users
who are placed at these levels. The authority levels or Types of Security decide the rights
of the users.

Tally has two security types already setup one is Owner and the other Data Entry.
Owner has full access and rights to all parts of Tally, except Tally Audit, which is
reserved for the administrator alone. Data Entry restricted rights. We are allowed to
create other security types based on these predefined types.

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 Tally Audit

Tally Audit is helpful for the Administrator to find out if any changes or additions have
been made after his last Tally Audit. The administrator can decide whether to accept or
reject the changes. It is best to take a printout before accepting the changes.

To activate the following options:

Company Creation Window

Use Security Control - Yes
Use Tally Audit Features - Yes

Only Administrator can access the Tally Audit reports. Tally Audit monitors major
changes in the following areas and logs it.
1. Vouchers
2. Ledgers
Minor changes like change in Narration etc., are ignored.

Steps Involved:
1. Set Owner & Data entry level password.
2. Create ledgers, Vouchers in different security level.
3. Go to Display  Statements of Accounts  Tally Audit  Vouchers
4. Press F12  and set the option “Show Entered/Altered By – Yes” (The name of
the user who passed this entry is shown. This enables the Administrator to
identify the person who passed the entry.

5. Press F7  Accept One

(This would accept the voucher as valid and removes from the list)
6. Press ALT + F7  Accept All
(If we are satisfied that all the vouchers are valid then click on this option)
7. To change the data in any user (Eg: Data entry level) and view the Tally Audit List.

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62
 Statutory & Taxation

VAT

 VAT is the abbreviated form for “Value Added Tax”

 The Value Added Tax is to be understood as “the value that a producer adds to his
raw materials or purchases before selling the new or improved product or service”.
 The present TamilNadu Government Sales Tax (TNGST) act is to be replaced by
TamilNadu Value Added Tax from 1-1-2007.
 It is the tax paid by the producers, manufacturers, retailers or any other dealer who
add value to the goods and that is ultimately passed on to the consumer.
 There are 550 categories of goods under the VAT system. They are classified into the
following four groups, depending on the VAT rate:
1. VAT @ 1%
2. VAT @ 4%
3. VAT @ 12.5
4. Exempted from VAT (0%)

VAT @ 1% - This is for a specific category of goods like gold, silver, etc.,
VAT @ 4% - The largest number of goods (270) comprising of basic necessity items
such as drugs and medicines, agricultural and industrial inputs (like fiber, seeds, etc.,),
capital goods (like plants, machinery, equipments, furniture etc.,) and declared goods
(like iron, steel, etc.,) are under 4% VAT rate.

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VAT @ 12.5% - The remaining commodities are under the general VAT rate of 12.5%.
Example: TV, mixie, lottery tickets, petroleum products, etc.,
Exempted from VAT - The exempted commodities include natural and unprocessed
products, goods of social importance (Example: newspapers, national flag, slates, pencils,
education books, etc.,)
 Input Tax - This is a tax paid on purchases.
 Output Tax - This is a tax charged on sales.
 VAT Payable = Output Tax charged – Input Tax paid

VAT in Tally

The computation of VAT in Tally is very easier and flexible. The steps to be followed
regarding Vat are:
1. In Company creation window, select the State for which VAT is calculated.
2. F11: Features  Statutory & Taxation
Set Enable Value Added Tax (VAT) - yes
Set/Alter VAT Details - Yes
On enabling Set/Alter VAT Details to Yes, Tally will prompt with VAT Details Screen.

3. Create the following ledgers under different groups for Vat (Accounts info 
Ledgers  Single Ledger  Create)

Ledger Name Under Used in VAT Returns VAT/TAX Class

Purchase @ 4% Purchase Account Yes Purchase @ 4%
Sales @ 4% Sales Account Yes Sales @ 4%
Input Vat @ 4% Duties & Taxes Input Vat @ 4%
Type of Duty/Tax - Vat
Output Vat @ 4% Duties & Taxes Output Vat @ 4%
Type of Duty/Tax - Vat
Ravi Traders Sundry Creditors
Kumar Traders Sundry Debtors

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4. In Accounting Vouchers we pass a Purchase, Sales entry for 4%.

5. To View the VAT reports

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 Display  Statutory Repots  VAT Reports  VAT Computation

6. Suppose there is Purchase Returns to Ravi Traders and Sales Return to Kumar
Traders, pass a Debit Note and Credit Note as follows,

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7. Now View the VAT Computation.

8. Similarly create ledgers, vouchers in VAT @ 1%, 12.5%, Exempted from VAT.

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 TDS

 Tax Deducted at Source (TDS) is one of the modes of collecting income tax.
 The buyers (Corporate and Non-Corporate) make payments (such as Salary, Rent,
Interest on securities, Dividends, Insurance Commission, Professional Fees,
Commission on Brokerage, Commission on Lottery Tickets, etc) to the sellers
(Services) and deduct the requisite amount from such payments towards tax.
 Example: Indirect Expenses (Fees for Professional or Technical Services)
Manohar is a technical consultant for automobiles. He inspects used cars and
prepares a report. Manohar (seller of the service) receives Rs.500 for inspection of
one car. He inspects five cars in January 2007. So he has to receive Rs.2500 as
service charges. Company 'A' pays him Rs.2250 towards service charges and pays
Rs.250 to any Bank or IT counter towards TDS.

TDS in Tally

To compute TDS in Tally is very easy and the different rate for different heads is inbuilt
in Tally.

1. In Company creation window, select the State.

2. F11: Features  Statutory & Taxation
Set Enable Tax Deducted at Source - yes
Set/Alter TDS Details - Yes
Once when the above option is set to yes we get a new screen where we should fill the
TDS Deductor Details.

3. F11  Accounting Features

Maintain Bill - Wise details - Yes
For Non - Trading A/c also - Yes

4. To View the TDS Nature of Payments

Display  Statutory Info  TDS Nature of Pymts.

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5. Create the following ledgers under different groups in Single Mode.

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6. Booking the TDS Expenses
Accounting Vouchers  F7 - Journal (This voucher enables you to book the
expenses directly and helps you to deduct the TDS and pay the amount to the party for
their services.)

7. Journal Voucher Using TDS Deduction Button

F7  Journal  Press ALT + S – TDS Deduction (You can pass a Journal
voucher using this button to record all the Tax ledger transactions for a particular party
who provides services.)
Dr: ABC enterprises – we get a new screen as TDS Details
Cr: TDS on Technical Services

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After accepting the Voucher entry, press “Page Up” we get the following screen,

8. Payment of TDS using the TDS Helper button

In Voucher entry screen  Press F5 – Payment  ALT + S to bring the TDS Helper.

Note: The TDS Helper button is enabled if Use Single Entry Mode for Pymt/Rcpt/Contra
in F12: Configure is set to Yes.

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9. Payment of TDS to a party in Tally

10. Result
Display  Statements of Accounts  TDS Outstandings  TDS Computations

11. Similarly we can create TDS for Rent, TDS for Salary, TDS for Advertising.

TCS

 Tax Collected as source (TCS) means collection of tax at source by the seller from
the buyer of the goods.
 Goods and transactions classified under TCS are listed below:
1. Alcoholic liquor (1%)
2. Tendu leaves (5%)
3. Timber obtained under a Forest Lease (2.5%)
4. Timber obtained other than Forest Lease (2.5%)
5. Any other forest produce not being Timber or Tendu (2.5%)
6. Scrap (Scrap means waste and scrap from the manufacture or mechanical
working of materials which is usable as such because of breakage, cutting up,
wear and tear and other reasons) (1%)
7. Licensing or leasing of Parking Lot, Toll Plaza (2%)
8. Mining and quarrying (2%)

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 TCS in Tally

Tally supports TCS and is a simple and easy-to-use feature. The complexities of TCS are
handled by Tally making it easier for you to maintain records and file TCS returns.

1. In Company creation window, select the State.

2. F11: Features  Statutory & Taxation
Set Enable Tax Collected at Source - yes
Set/Alter TDS Details - Yes
Once when the above option is set to yes we get a new screen where we should fill the
Company TCS Collector Details.

3. F11  Accounting Features

Maintain Bill - Wise details - Yes
For Non - Trading A/c also - Yes
4. Create the following ledgers under different groups in Single Mode.

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5. Create a Stock Item
Inventory Info  Stock Items  Create (Example: Item Name – Timber)
6. To create Sales Vouchers with TCS details

TCS is calculated automatically

and displayed.

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7. Pass a Receipt Entry as cash received from “Customer TCS”

8. Result
Display  Statements of Accounts  TCS Outstandings  TCS Payable

9. To create a TCS payment voucher manually

FBT
 FBT - Fringe Benefit Tax
 The term Fringe Benefits means ‘any consideration for employment provided by way
of any privilege (benefit), service, facility provided by the employer to the
employees’.
 Fringe Benefit Tax is in the nature of presumptive tax. In other words it assumes that
certain amount of little expenditure would have gone to the Personal Enjoyment of
the Employees. So they have identified certain Expenditures on which Fringe Benefit
Tax (FBT) is to be paid.

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 Examples: The employee uses the office phone for his personal use also, The car
given by the company in the official capacity is used to some domestic(home) travel
also, etc.,
FBT in Tally

The calculation of Fringe Benefit Tax in Tally is very simpler and easy to understand.

1. In Company creation window, select the State.

2. F11: Features  Statutory & Taxation
Set Enable Fringe Benefit Tax - yes
Set/Alter FBT Details - Yes
The Company FBT Assesse Details sub form appears as shown.

3. F11  Accounting Features

Maintain Bill - Wise details - Yes
For Non - Trading A/c also - Yes
Accounting Voucher  F12  Use Single Entry mode for Pymt/Rcpt/contra – Yes

4. To view the FBT Category

Display  Statutory Info  FBT Category (To view the percentage of Tax)

5. An Example Transactions For FBT

Transaction - 1
Conveyance Expenses of Rs.5600 paid to the Officer by cheque.

Transaction - 2
Entertainment Expenses of Rs.7500 incurred by the company.

Transaction - 3
The company received a bill from Sri Balaji Agencies for Rs.15600 being the Fuel
charges for the month.

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6. Create the following ledgers under different groups in Single Mode.

Leger Name Under Is FBT FBT Category

applicable
Conveyance Indirect Expenses Yes Conveyance, Tours and Travel
(Including Foreign Travel)
Entertainment Indirect Expenses Yes Entertainment
Fuel Charges Direct Expenses Yes Repair, Running and
maintenance of Motor Cars
Sri Balaji Sundry Creditors
Agencies
Canara Bank Bank Account

7. In Accounting Vouchers we pass a Payment (Transaction 1 & 2), Purchase

(Transaction 3) entry.
8. Result
Display  Statutory Reports  FBT Reports  FBT Computation
9. Transaction – 4
If the company had received an Invoice from Sri Balaji Agencies that Rs.1000 was
wrongly charged before making the payment then pass a Debit note as follows and then
the Payment.

10. Now view the FBT Computation.

(Display  Statutory Reports  FBT Reports  FBT Computation)

11. Transaction – 5

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The Company recovered Rs.1200 from its Officer towards Conveyance Expenses.

For the above transaction, Alter the voucher Type.

 Go to Accounts Info  Voucher Types  Alter  Journal
 Under Name of Class type “Recovery of FBT”
 We get another window, set “Use Class for FBT Recovery – Yes”.
To make the entry
Accounting Voucher  F7 - Journal (Select Recovery of FBT Under Name of class) and
pass the entry.

12. Now view the FBT Computation.

13. Transaction – 6
The Company Pays Fringe Benefit Tax for the quarter 1st April to 30th June.

To Create a Tax Ledger

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 Ledger Name Under
Fringe Benefit Tax Duties & Taxes
Type of Duty/Tax -FBT

To create a FBT payment voucher

F5 – Payment (press Alt + F – FBT Helper). The following screen appears.

Excise for Traders

 Excise duty or duty of excise is a tax on goods produced or manufactured in India.

 Excise duty is chargeable at the time of production or manufacture.
 The following dealers are covered under Excise for Traders.
First Stage Dealer
Second Stage Dealer
 The categorization of a dealer as first stage or second stage is not predefined. It is
decided during the purchase.
 Example: Cadburys manufactures Bournvita and hence Cadburys is the
“manufacturer”. Cadburys does the marketing through XYZ Industries. XYZ is the
“First Stage Dealer”. When XYZ Industries sells to a Wholesaler, the wholesaler is
the “Second Stage Dealer”.

Manufacturer First Stage Dealer Second Stage Dealer

Excise Duty in Tally

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 1. In Company Creation Window, select the state.
2. F11: Features  Statutory & Taxation
Set Enable Dealer Excise - yes
Set/Alter Dealer Excise Details - Yes
The Company Excise Details sub-form appears as shown below.

3. F11: Features  Statutory & Taxation

Set Enable Value Added Tax (VAT) - yes
Set/Alter VAT Details - Yes
4. Creating Purchase, Sales Voucher Type
Accounts Info  Voucher Types  Create

Name: Excise Purchase Name: Excise Sales

Type of Voucher: Purchase Type of Voucher: Sales
Use for Dealer Excise: Yes Use for Dealer Excise: Yes

5. Create the following ledgers under different groups in Single Mode.

Ledger Name: Carding Equipments Ledger Name: Dolphin Engineers

Under: Sundry Creditors Under: Sundry Debtors
Excise Details: Yes Excise Details: Yes
Default Nature of Purchase: Manufacturer Default Nature of Purchase: Second Stage Dealer

Ledger Name: Purchase @ 4% Ledger Name: Sales @ 4%

Under: Purchase Accounts Under: Sales Accounts
Used in VAT Returns: Yes Used in VAT Returns: Yes
VAT/Tax Class: Purchase @ 4% VAT/Tax Class: Sales @ 4%

Ledger Name: Input Vat @ 4% Ledger Name: Output Vat @ 4%

Under: Duties & Taxes Under: Duties & Taxes
Type of Duty: VAT Type of Duty: VAT
VAT/Tax Class: Input Vat @ 4% VAT/Tax Class: Output Vat @ 4%
Ledger Name: Harish Info Tech
Under: Sundry Creditors
Excise Details: Yes
Default Nature of Purchase: First Stage Dealer
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6. Create a Unit of Measure – Numbers (Nos)
7. Create a Stock Item

Item Name: Steel Rods

Units: Nos
Excise Details: Yes (We get the following Screen)

Notes: AED (GSI) – Additional

Excise Duty (Goods of Special
Importance)

8. In Accounting Vouchers we pass Excise Purchase (using Manufacturer, First

Stage Dealer), Excise Sales entry.
Example:

9. Result
Display  Statutory Reports  Dealer Excise Report  Excise Stock Register.

Service Tax

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 Service tax is an indirect tax levied on certain category of services provided by a
person, firm, agency, etc.
 The Government of India has marked a set of services as taxable under the service tax
structure.
 Currently, the rate of service tax on all the taxable services is 12%. Presently, service
tax is applicable on 97 categories of services.
 The government has given a deduction on the value to be considered for service tax
on a few categories of services. For Example: To prepare Food products.
 This deduction from the service charges to be considered for service tax is called
abatement. Example:

a. Charge on Service Rs.10, 000/-

b. If an abatement of 30% is applied, then abatement Rs.3, 000/-
c. Here, the assessable value is (a-b) Rs.7, 000/-
Therefore, service tax @ 10 % on Rs.7, 000/- Rs.700/-

Service Tax in Tally

1. In Company Creation Window, select the state.

2. F11: Features  Statutory & Taxation
Set Enable Service Tax - yes
Set/Alter Service Tax Details - Yes
When yes is set to the option, Tally displays another window where we can enter the
Service Tax Registration Details.

3. Display of Service Categories in Statutory Masters

Display  Statutory Info  Service Categories

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 4. Create the following ledgers under different groups in Single Mode.

Ledger Name: Service Tax Charted Accountant Ledger Name: Service Tax on Telephone Charges
Under: Duties & Taxes Under: Duties & Taxes
Type of Duty/Tax: Service Tax Type of Duty/Tax: Service Tax
Category Name: Charted Accountant Category Name: Telephone Service
Inventory values are affected: No Inventory values are affected: No

Ledger Name: Consultancy ABC & Co Ledger Name: Telephone Charges

Under: Sales account Under: Indirect Expenses
Inventory values are affected: Yes Inventory values are affected: No
Is Service Tax Applicable: Yes Is Service Tax Applicable: Yes
Category Name: Charted Accountant Category Name: Telephone Services

Ledger Name: XYZ & Co Ledger Name: BSNL

Under: Sundry Debtors Under: Sundry Creditors
Is Service Tax Applicable: Yes Is Service Tax Applicable: Yes

5. Create a Unit of Measure - Hours (Hrs)

6. Create a Stock Item (Item Name - Accounts)
7. Creating Sales Vouchers

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8. Creating a Journal Voucher for Expenses

9. Creating Receipts and Payments voucher

10. Result
Display  Statutory Reports  Service Tax Reports  Service Tax Payable
 Input Credit Form

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 11. Payment of Service Tax in Tally

Now view the Service Tax Payable report and Input Credit form. Both the reports show a
balance of “0”.
12. Have print preview of TR6 challan for the period from 1- 4 - 2008

Point of Sales (POS)

 Point of Sales is considered a one-step billing process.

 The POS (Point-of-Sales) Invoice feature allows you to create invoices at a point of
sales and to collect payment from your customers. For Example: Departmental Store,
Cake shop, Petrol Bunks, etc.,
 POS Invoice allows you to create invoices in seconds and also print the invoices.
 Small & Smart printed bills.
 Automated calculation of Tax, if any.

Point of Sales in Tally

1. Create a Company in Tally.

2. F11: Features  Statutory & Taxation
Set Enable Value Added Tax (VAT) - yes
Set/Alter VAT Details - Yes
3. Create the following ledgers under different groups in Single Mode.

Ledger Name: Sales @ 4% Ledger Name: Output Vat @ 4%

Under: Sales Accounts Under: Duties & Taxes
Used in VAT Returns: Yes Type of Duty: VAT
VAT/Tax Class: Sales @ 4% VAT/Tax Class: Output Vat @ 4%

Ledger Name: IOB Ledger Name: ICICI Ledger Name: Gift Voucher
Under: Bank Account Under: Bank Account Under: Sundry Creditors

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4. Create a Unit of Measure – Numbers (Nos)
5. Create a Stock Item (Item Name – Item 1)
6. To create a POS Invoice Voucher Type
Accounts Info  Voucher Types  Create

Name: Pos Invoice

Type of Voucher: Sales
Print after saving Voucher: Yes
Use for POS Invoicing: Yes
Print Message 1: Thank You
Print Message 2: Visit Again
Default Print Title: Welcome
Name of Class: POS

7. Creating a POS Invoice

Accounting Voucher  F8: Sales  Select “POS Invoice”

Notes: CTRL + P - Single Payment mode (or) Multi Payment mode.

“The Single Mode Payment will appear as below with the Cash and Cash
tendered field. The Multi Mode Payment button helps you to make the payment
through other mode like Gift voucher, credit card or by cheque.”

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8. Result
Display  Account Books  POS Register

Payroll in Tally

 Payroll is a process of maintaining the pay record of the employees under various pay
heads, deductions, attendance, absence records etc,.
 Tally Payroll enables users to set up and implement salary structures, ranging from
simple to complex, as per the organization’s requirements.

1. Create a Company in Tally.

2. F11  Accounting Features
Maintain Payroll - yes
More than one Payroll/ Cost Category - Yes
3. Once when the features are activated we get Payroll Info & Payroll Voucher in
Gateway of Tally.

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4. Select Payroll info from Gateway of Tally, the following screen appears:

5. Go to Employee Groups and create the Employee groups.

6. Next create the list of Employees giving full details as shown below.

Press F12 
Set Employee Configuration

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Similarly, we can enter the staff details. (To view the employees List, go to Payroll Info
 Employees  Multi Employees  Alter)

7. Create Units (work)

Type
Simple Compound
Days Days of 24 hrs
Hrs (hours) Month of 30 days
Month
8. Create Attendance/Production Types. There are 3 options under List of
Attendance Types.
 Attendance/Leave with pay
 Leave without pay
 Production

Name Attendance Type Period Type

Persent Attendance / Leave with Pay Days
Absent Leave Without Pay Days
Overtime Production Hrs

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9. Create the necessary Pay Heads

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10. To create Salary Details for an Employee Group, For example, Co - ordinator:

Similarly create a salary details for Faculty, Receptionist, and Employees.

11. Vouchers Types in Tally Payroll

 Go to Gateway of Tally  Payroll Vouchers  Ctrl + F5: Attendance

 Go to Gateway of Tally  Payroll Vouchers  Ctrl+F4: Payroll, Alt+A: Auto fill

we get the following screen.

Cash

The Salary amount is calculated automatically.

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12. To view the Payroll reports:
Display  Payroll Reports  Statements of Payroll  Pay Slip

Similarly view the Pay sheet for all Employees.

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