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Tally

Oct 23, 2014

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Basics of AccountingTally is an Accounting Software that helps you in maintaining Accounts and Inventory of your office.

General AccountingWhat is AccountingAccounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are in part, at least, of a financial character, and interpreting the result thereof American Institute of certified public accountants.

Methods of AccountingThere are two types of Accounting Systems. 1. American Method or Single Entry System. 2. English Method or Double Entry System.

1.

American Method or Single Entry System.

It has further five types of accounting. I. II. III. IV. V. Assets Accounts Liabilities Accounts Capital Accounts or Owners Equity A/c Revenue or Income Accounts Loss or Expenses A/c

Methods of RecordingI. II. III. IV. V. Debit the Increase in the Assets and Credit the Decrease in the Assets. Credit the Increase in the Liabilities and Debit the Decrease in the Liabilities. Credit the Increase in the Capital and Debit the Decrease in the Capital. Credit the Increase in the Income and Debit the Decrease in the Income. Debit the Increase in the Expenses and Credit the Decrease in the Expenses.

2.

English Method or Double Entry System.

Classification of Accounts 1. Personal Accounts: These accounts are those accounts which areopened by a name of a person, firm, company, society or organization.

Rules: Debit the Receiver and Credit the Giver.Types of Personal Accounts: I. Natural Personal Accounts: a) MAHESHs Accounts b) Owners Capital Accounts c) Owners Drawing Accounts d) Debtors Accounts e) Creditors Accounts II. Artificial Personal Accounts a) Firms a) b) c) d) e) f) Accounts Companys Accounts Organization Accounts Bank Accounts Club Accounts Insurance Company Accounts Government Sector accounts

III. Representative Personal Accounts a) b) c) d) Outstanding Salary Due to Staff account Prepaid Insurance Account Accrued Income Account Unearned Commission Account

3. Real Accounts: Those Business assets which can be measure in the term of money their accounts are called Real Accounts.

Rules: Debit what comes in and Credit what goes out.

Types of Real Accounts:I. Tangible Real Accounts: These accounts are those assets account which can be touched.

a) b) c) d) e)

Cash Account Stock Account Furniture Account Land Account Building Account

II. Intangible Real Accounts: Those accounts are those assets account which cant touch but can be measured in the term of money.

a) b) c) d)

Goodwill Accounts Patents Accounts Trade Mark Accounts Copy Right Accounts

4. Nominal Accounts: Income and Expenditure accounts of a business are called nominal accounts.

Rules: All the Expenses are debited and Incomes are credited.Types of Real Accounts: I. Expenditure Accounts: a) Salary Paid Accounts b) Rent Paid Accounts c) Bed Debts Accounts d) Commission Paid Accounts II. Income Accounts: a) Salary Received Accounts b) Rent Received Accounts c) Commission Received Accounts d) Interest Received Accounts e) Bed Debts Recovered Accounts

Steps for working in the Tally1. Create Company: In Tally this is the First task or primary task to create a company. For this Purpose we have to select the Create Company option from menu Gateway of Tally. After selecting the option we have to fill up the details for the Company like Company Name, Address, Started Date, and Income Tax No etc. 2. Creates Groups: Groups are created for same type of Ledger A/cs. In Tally There are many groups which are used for making ledgers. So in the rare cases we have to create groups. These are the main groups in the tally. I. Reserve and Surplus (Retained Earning): You can use this group heads like Investment Allowance Reserve, Select Ledger and other such reserve accounts. a) Current Assets: This is the primary group that has all the current assets accounts. It has Six Sub Groups under it. b) Bank Accounts: It is used to hold all accounts of banks. c) Cash in hand: It is used to hold ledger account of cash. d) Deposits: It is used to hold assets like security deposits, rental deposits and all other deposits made by the company. e) Loan and Advances: It is used to hold all advances and loans of non trading nature given by the company. f) Stock in hand: It is used to hold certain special accounts like raw material, finished goods and work in progress. g) Sundry Debtors: It is used to hold accounts of companies and individuals that give goods on credit to the company. III. Current Liabilities: This is a primary group and is used to hold outstanding and statuary liabilities of the company. The group has three sub groups under it which are as follows. a) Duties and taxes: It consists all types of taxes and duties like Excise, Local Sales tax, Central Sales Tax, VAT etc. b) Provisions: It is used to hold other tax provisions like Income tax, depreciation in it. c) Sundry Creditors: It is used to hold accounts trade creditors of the company.

IV. Fixed Assets: This is used to keep accounts of all the fixed assets, patents, trade tights etc. V. Investment: This is used to hold ledger accounts of shares, bonus

and other securities of the company. VI. Loan Liabilities: This is used to keep track of loan taken by the company. This group has three sub groups which are as follows.a) Bank OD Accounts: It is used to hold all overdraft accounts with banks. b) Secured Loans: It is used to hold long/medium term loans taken by the company from financial companies and Banks etc. c) Unsecured Loans: It is used to hold the loans taken unconditionally by the company.

VII. Suspense Accounts: This is used by many companies to maintain a suspense ledger which keeps track of money received or paid by the companies, whose nature of transaction is not yet known. VIII. Miscellaneous Expenses: The loss of the company, which has not been written off but carried forward to the next year, should fall here. However, tally treats it as a negative profit and carries it to the profit and loss account. IX. Branches/Division: This is used to keep the names of all companies which may be branches, divisions of the company. X. Sales Account: It is used to all goods sales accounts of the companies. XI. Purchase Account: It is used to all goods purchase accounts of the companies. XII. Direct Income: It is used to hold ledger accounts of nontrade income accounts that affect gross profit. XIII. Indirect Income: This is used to hold ledger accounts of those expenses of the company that determine its gross profit. For example interest received and commission received. XIV. Direct Expenses: This is used to hold ledger accounts of those expenses of the company which determine its gross profit. Expenses like salary paid to labour, transportation, electricity bills etc. XV. Indirect Expenses:This is used to hold ledger account of those expenses of the company, which determine its net profit. Expenses like advertising, maintenance of vehicles, administrative expenses etc.

3. Create Ledgers: Ledgers are actual account heads to which the transactions are identified. You Make all voucher entries in these accounts. You have to classify all ledgers in to groups. 4. Voucher Entries: For Making the Voucher Entries first of all we have to set the voucher date by pressing F2 then enter the voucher date. There are various types of vouchers in tally. Those are describes as follows: I. Contra Voucher: This type of voucher is used for Cash to Bank, Bank to Cash and Bank to Bank Entries. Press F4 to select the voucher type. II. Payment Voucher: This type of voucher is used for the Cash Payment Entries. Press F5 to select the voucher type. III. Receipts Voucher: This type of voucher is used for the Cash Receipts Entries. Press F6 to select the voucher type. IV. Journal: This is used for the Journal Entries like debit of credit Entries. Press F7 to select the voucher type. V. Sales Voucher: This is used for the Goods Sales Entries. Press F8 to select the voucher type. VI. Purchase Voucher: This is used for Goods Purchase Entries. Press F9 to select the voucher type. VII. Memo: This is used to create Memorandum or Reverse Journal Voucher. Press F10 to select the voucher type. 5. Display Reports: There are several types of reports are generated by the tally like Trading and Profit and Loss Account, Balance Sheet, Inventory Reporting Ratio Analysis etc.

Introduction to TallyTally is a Financial and Inventory Management System. Tally is one of the acclaimed 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 software was developed by Mr.Bharat Goenka in the year 1988.

Features of Tally1. 2. Accounting wihtout codes Comprehensive Accounting. Maintains complete range of books of Accounts, Final A/cs like Balance Sheet , Profit & loss A/c, cash and fund flow , Trial Balance and others. Provides Multiple reports in Diverse formats Various options for interest Calculations Maintain multiple Godowns for stock management. Unlimited sub-classifications to get multi-dimensional analysis and comparatives. Allow accounts of multiple companies simultaneously. Multiple currencies in the same transaction and viewing all reports in one or more currency. Prints online. print daybook and balance sheet and ledger , trial balance and profit and loss a/c.

3. 4. 5. 6. 7. 8. 9. 10.

11. Backup and restore option 12. Tally is allow to cheque printing 13. Multi tax calculation like VAT, TDS, TCS, FBT, e t c . 14. Calculate Payroll calculation easily. 15. Use Security levels for audit purpose.

To start Tally :Start -> Programs ->Tally 9 -> Tally 9 Release 2 Or Double click on the Ta