I

FC5 B08
COMPUTERISED ACCOUNTING WITH TALLY

BA ISLAMIC FINANCE
WITH COMPUTER APPLICATION
Module I:
INTRODUCTION TO ACCOUNTING
Accounting 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 results thereof".

Important Accounting Terms

Business
It includes any activity undertaken for the purpose of earning profit.
Proprietor
Proprietor is the owner of the business. He is the Investor.
Transactions
Transactions are events that have affected the business.
The transactions may be Cash transactions or Credit Transactions.
Drawings
The cash or goods taken away by the proprietor from the business for his
personal use are called drawings.
Purchases
Goods purchased are called purchases.
Purchases Return
If goods purchased are found defective or unsatisfactory, they are sometimes
returned to the seller.
Sales
Goods sold are called Sales.
Sales Return
If a buyer finds that goods are defective or unsatisfactory and returns them,
are called Sales return or returns inwards.
Trade Discount
It is a rebate or allowances from the scheduled price granted by the seller to
the buyer when sales are made in bulk.

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Cash Discount
It is a deduction or allowances allowed by creditor to a debtor. If a person
pays his debt before the due date of payment.
Commission
It is a form of remuneration for services rendered by one person to another.
Expenditure
Expenditure takes place when assets or services is acquired.
Expenses
It means an expenditure whose benefit is finished or enjoyed immediately
such as salaries, rent etc
Account
A Summarized record of transactions relating to persons or thing is called an
account.
Debtor (Account Receivables)
A person who owes money to another is a debtor
Creditor (Account Payables)
A person who pays out something or to whom money is owing is a creditor.
Assets
An asset is a property of value owned by a business.
Liabilities
They are the debt due by a business to its proprietors and others.
Voucher
Any written evidence in support of a business transactions is called a
voucher.
Goods (Merchandises)
It includes all merchandise commodities which are purchased by the
business for selling.
Stock (Inventory)

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Goods or merchandise on hand, that is goods remaining unsold is called
Stock, Stock in trade.
Equity
A claim which can be enforced against the assets of the firm is called Equity.
Capital
Capital, also called net worth, is the wealth in the form of money or other
assets owned by a person or organization or available for a purpose such as
starting a company or investing.
Journal
A journal is a record in which all business transactions are entered in a
chronological order. A record of a single business transactions is called a
journal entry.
Ledger
A Ledger is a book which contains all the accounts whether personal, real or
nominal, which are entered in journal or subsidiary books.
Chart of Accounts
A Chart of accounts is a list of all accounts used by an organization.
Posting
Posting is the process of transferring the entries recorded in the journal or
subsidiary books to the respective accounts opened in the ledger.
Accounting Period
An accounting period is a period of time that covers certain accounting
functions, which can be either a calendar or fiscal year, but also a week,
month, or quarter, etc.

TRAIL BALANCE
A trial balance is a list of all the general ledger accounts contained in the
ledger of a business. This list will contain the name of each nominal
ledger account and the value of that nominal ledger balance. Each

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nominal ledger account will hold either a debit balance or a credit
balance.

FINANCIAL STATEMENTS
Financial statements are a collection of summary-level reports about an
organization's financial results, financial position, and cash flows. They
include the income statement, balance sheet, and statement of cash
flows.
Financial statements normally include
1. Trading Account
2. Profit and Loss Account
3. Balancesheet
Trading Account
Trading account is a statement which is prepared by a business firm. It
shows the gross profit of business activities during a specific period. It is
a part of the final accounts of the entity. In other words, the trading
account gives details of total sales, total purchases and direct expenses
relating to purchase and sales.

Gross Profit = Net Sales – Cost of Sales.

Profit and Loss Account

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A profit and loss account are prepared to determine the net income
(performance result) of an enterprise for the year/period. This is the most
significant information to be reported for decision making.

Balance sheet
The balance sheet displays the company’s total assets and how the
assets are financed, either through either debt or equity. It can also be
referred to as a statement of net worth or a statement of financial
position.

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Double Entry System of Accounting
Double-entry bookkeeping is a method of recording transactions where
for every business transaction, an entry is recorded in at least two
accounts as a debit or credit. In a double-entry system, the amounts
recorded as debits must be equal to the amounts recorded as credits.
The double entry system of accounting can be broadly divided into the
following three stages.
1. Original records (Journal or subdivision of journal)
2. Classification (Ledger accounts)
3. Summary (Final Account)

Accounting Equation > (Assets = Liabilities + Equity)

Rule of Accounting
Nature or Types Debit Credit
of Accounts
Personal Account The Receiver The Giver
Real Account What comes in What goes out

Nominal Account All Expenses and All Incomes & Gains

Losses

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 Account Increased by Decreased by

Asset Debit Credit

Liability Credit Debit

Incomes Credit Debit

Capital Credit Debit

Expenses Debit Credit

DEBIT CREDIT

EDA
If Increases

CLIC
Expenses Assets Liability Incomes
Capital

BASIC ACCOUNTING CONCEPTS

1. ACCRUALS CONCEPTS
Revenue and Expenses are recorded when they occur and not
when the cash is received or paid out.
2. MONEY MEASUREMENT
The money measurement concept states that a business
should only record an accounting transaction if it can be
expressed in terms of money.
3. DUAL ASPECT CONCEPT

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 The dual aspect concept indicates that each transaction made
by a business impacts the business in two different aspects
which are equal and opposite in nature.
4. CONSISTENCY CONCEPT
The consistency principle states that business should maintain
the same accounting methods or principles throughout the
accounting periods, so that users of the financial statements or
information are able to make meaningful conclusions from the
data.
5. BUSINESS ENTITY CONCEPT
The business entity concept states that the business is
separate from the owner(s) of the business. Therefore, the
accounting records for even the simplest business, the sole
trader, must be kept separate from the personal affairs of the
owner or owners.
6. GOING CONCERN CONCEPT
The going concern principle is the assumption that an entity
will remain in business for the foreseeable future.
7. MATCHING CONCEPT
Matching concept states that expenses that are incurred in an
accounting period should be matching with the revenue earned
during that period.

8. MATERIALITY CONCEPT
Materiality concept in accounting refers to the concept that all
the material items should be reported properly in the financial
statements
9. ACCOUNTING PERIOD CONCEPT
Accounting period concept refers to the theory of recording
accounting transactions in equal time intervals, which are
known as accounting periods.
10. REALISATION CONCEPT
The realization principle is a concept in accounting that states
that revenue should be recognized once it is earned.

BRANCHES OF ACCOUNTING
1. Book keeping
Bookkeeping is the process of recording your company's financial
transactions into organized accounts on a daily basis.
2. Financial Accounting

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 Financial accounting is a systematic method of recording any
business transactions according to accounting principles. It is
the original form of the accounting process. The primary
purpose of financial accounting is to calculate the profit or loss
of a business during a period and provide an accurate picture
of the business’s financial position as on a particular date.
The Trial Balances, Profit & Loss Accounts, and Balance Sheets
of a company are based on the application of financial
accounting principles.
3. Cost Accounting
Cost accounting deals with evaluating the cost of a product or
service offered. It calculates the cost by considering all factors,
including manufacturing and administrative, that contribute to
the output production.
The objective of cost accounting is to help the management fix
the prices and control the cost of production.
4. Management Accounting
This branch of accounting provides information to
management for better administration of the business. It helps
in making important decisions and controlling of various
activities of the business.
The management can make decisions efficiently with the help
of various Management Information Systems such as Budgets,
Projected Cash Flow and Fund Flow Statements, Variance
Analysis reports, Cost-Volume-Profit Analysis reports, Break-
Even-Point calculations, etc.

MANUAL ACCOUNTING
A manual accounting system is a bookkeeping system for recording
business activity transactions, where financial records are kept without
using a computer system with specialized accounting software.
Advantages of Manual Accounting:
1. Cheaper:
It is much economical than installing computerised systems and
software.
2. Less expenditure on employees:

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 As the manual accounting system doesn’t require personnel with
specialised knowledge in computers and software, companies
have to spend less on accountants.
3. Less complicated:
Not all people are at ease with computers or software. Instead, a
pencil and paper make them more efficient when it comes to
accounting.
4. Not dependent on electricity:
Unlike Computerised accounting, Manual accounting can be done
even when there is no electricity.
5. No duplication or corruption of data:
Unlike in Computerised accounting, there is no risk of data
duplication or corruption.

6. Detection of potential errors:

Manual accounting system entails double-entry accounting that is
entering of credits and debits in two different accounts. This
method provides a natural way of detecting errors as the entered
debits and credits are compared in a trial balance. During the trial
balance, if the debits are found not matching the credits, an error is
detected.

Disadvantages of Manual Accounting

1. Labour intensive:
Manual accounting is an uphill task and requires a lot of
patience, time, and appropriate accounting knowledge.
Therefore, the recruitment of financial accountants is
necessary for this accounting method.

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 2. Time-consuming:
Unlike Computerised accounting, manual accounting is a
slow and time-consuming process.
3. Potential of human error:
One cannot dismiss the chances of possible human error
in data entry when it comes to Manual accounting.
4. Loss of hard copies:
Disasters do not give a warning before arriving. Physical
documents like ledgers and journals are prone to theft,
loss, fire, water and the like. Producing and storing
duplicates is indeed a tedious job.

COMPUTERIZED ACCOUNTING SYSTEM

Computerized accounting refers to carrying out accounting functions or

processes using computers. It involves recording and analysing financial
transactions electronically over accounting software.

Features

1. Digital Storage of Data: The recording of data is in

a digital form in this system. It provides convenience
in data modification, retrieval and removal.
2. Quick Updation: The changes in stock are reflected
simultaneously with data entry.
3. Integrated System: It is an integrated system that is
faster and simple to use.
4. Avoids Monotony of Work: The accountants usually
get bored by monotonous work.

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 Computerized accounting is programming based.
Thus, one only has to track the accounts after
recording.
5. Prompt Decision Making: The representation of
accounting information is in a simplified form. So,
decisions making is prompt and efficient.
6. Transparency: The record of day-to-day activities is
systematic and organized. Leading to transparency
and control over the business.
7. Customization: The accounting software isn’t rigid.
Organizations can go for customized software based
on their requirements.
8. Scalability: Computerized accounting can be
updated according to the company’s structure.
It is capable of managing even a large volume of
transactions.

 Error-Free Accounting
A computerized accounting system uses artificial
intelligence. The reports generated consider every
minute detail of the transactions.
 Less Manpower
Preparing accounts over software requires less human
resources. The requirement of personnel is only for
data entry and analysis.
Rest every processing takes place automatically on
the software.
 Consistency in Records
This accounting system has consistency in record

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 maintenance. The system has a systematic pre-
defined structure to store and display data.
 Automation
The organizations have to feed the data inside the
software. The software automatically creates Ledger,
Trial Balance, Income Statements and Balance Sheet,
etc.
 Time Efficient
The software’s are easy to use and consume less time
in record maintenance.
The design and development of the software are,
especially for accounting purposes. Hence, save time
and costs for the organizations.
 Management and Control
Compared with manual accounting, managing and
controlling financial data is easy.
 Accessibility
We can access and retrieve information saved with a
single click. This accounting system also provides
security to the data.
Only authorized persons can access the companies
accounts.
 Improved Efficiency
Automation of accounting systems helps in improving
efficiency.
It enables optimization of time and
resources along with accuracy in account
maintenance.
 Attractive and Quality Reports
Report generation is automatic in this system. It
utilizes the information saved by the user.
These reports analyze information. And depict it in a
consolidated form using visual tools as per user
requirements.
 Security
A computerized accounting system facilitates
protection to the companies accounts.
The accounting software is password protected. And
only allows authorized users to access the data.

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 Data Corruption
The data stored in the software may get corrupted.
The internal and external users can hamper the
data in the software.
It also has a threat from the hackers who may access
and leak companies crucial information.
 Unemployment
The installation of the computerized accounting
system leads to unemployment. Because of the
automation, there is less need for personnel.
 System Failure
A computer is a machine and may have system
failures. Consequently, the accounting process will
stop until it is fixed. In the meantime, the accounts
are manually managed or re-entered if required.
 Technology Obsolescence
There is continuous technological advancement in the
current scenario. The accounting system will get
outdated after a while.
Thus, one needs to reinvest to get the updated
version. It unnecessarily consumes companies
precious time and resources.
 Incorrect Data Input
In a computerized accounting system, the data entry
is manual. Hence, there can be errors at the time of
data entry. It will result in inaccurate data and
unidentifiable errors.

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  Skilled Staff
This system demands specified skills for software
operation. The organization needs to hire skilled
personnel for operating the accounting software.
 Addition to Cost
Acquiring, installing and maintaining software is an
expensive affair. Small firms may not afford these
costs. And hence, continue to use manual accounting.
 Programme Based
This accounting system is programme based and
follows pre-defined instructions. It may not foresee
unknown errors in the statements.

Difference between Computerized and Manual Accounting

BASIS COMPUTERIZED ACCOUNTING MANUAL ACCOUNTING

Meaning In this, the accounting function takes In this, the accountants

place in a computerized accounting manually perform accounting

system. functions.

Speed The speed is faster because the The speed of accounting is

accounting is digital. Only data entry slow. As humans have a

is manual, and the accounting limited capacity to do a certain

software does the rest. job.

Data In this, the recording of data is In this, the recording of data is

Storage inside the software. It can keep a on the papers and files. It is

large volume of data. challenging to keep a large

volume of data.

Computerized Accounting with TALLY

BASIS COMPUTERIZED ACCOUNTING MANUAL ACCOUNTING

Error The software display alerts right at The accountant may overlook

Detection the time of the wrong entry. some errors.

Data The data is highly secured. The data is less secured.

Security

Data Entry The personnel dedicated to The accountant enter

operating the software inputs the manually in the books of

data. accounts.

Knowledge Basic knowledge for correctly In-depth knowledge is

recording financial transactions is required.

required.

Adjustment No need to pass separate entries for The accountant needs to pass

Entries rectification. entries for rectification of

errors.

Backup The software keeps a backup of the Data once lost cannot be

data and can recover it if lost. recovered.

ACCOUNTING PACKAGES (Types Computerized Accounting Software)

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Readymade Software

These are the accounting software already available in the

market. It is developed to meet the requirements of the
users in general. Companies can buy this software and do not
require expertise to use it.

Example:- Tally, Professional Accountant and Busy, etc.

 It is feasible for small companies as it is less costly.

 There is no requirement for special skills to operate
the software.
 Suitable for the organization will low volume
transactions.
 The data is less secured and sensitive to accounting
frauds.
 Inter-connectivity with other software is minimum.
 A limited number of users can work on the software
simultaneously.

Customized Software

Here, the modifications are made to the existing software.

These modifications are in accordance with the special
requirements of the user. The companies have to pay
additional charges for the modification.

 Suitable for medium and large-sized companies.

 It is comparably costly than the readymade software.
 Capable of managing a large number of financial
transactions.
 Companies have to train employees to operate the
software.

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  The software can be linked to the companies
Management Information System(MIS).
 Data is more secured in the customized software.
 Some specified number of users can get authorized
access.
Tailor-made Software

It refers to the software’s design and programming based

on user-specific requirements. Large organizations with
units at scattered geographical locations opt for this software.

 It focuses on high data security at the time of

development.
 Software installation and maintenance is quite
expensive.
 Many users can access it at different locations.
 Training of the users is a must at every unit.
 Softwares are tailor-made, so they are inter-linked to
the company MIS.
 It is comparably more complex.

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 Module II:
ACCOUNTING WITH TALLY

Computerized Accounting with TALLY

What is Tally?

ERP 9 is one of the most popular accounting software used in India. It is complete
enterprise software for small & medium enterprises. Tally. ERP 9 is a perfect
business management solution and GST software with an ideal combination of
function, control, and in-built customisability.

There are only 2 types of Tally software. One is Tally. ERP 9 Single user (Silver) and
the other is Tally multi-user (Tally Gold).

The latest version of the software is Tally Prime released in November 2020 & Tally
ERP 9, which was released in 2009.

The term “ERP” stands for Enterprise Resource Planning in very technical terms.
The term means, the user can manage their entire business in Tally all by
themselves, as it is very user-friendly software.

Features of Tally

 Simplicity: Tally.ERP9 accounting software is easy to set up, simple to use

and is designed to simplify the complex day to day activities associated in an
enterprise
 Remote Access: Tally.ERP9 provides its users with remote capabilities to
access the data from any location whatsoever at any point in time.
 Power: Tally.ERP9 allows users to maintain multiple companies and with
unlimited levels of classification & grouping capabilities.
 Accounting without Codes: Tally.ERP9 allows accounting with the regular
names without any account codes.

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  Real-time processing: Real-time processing allows immediate posting and
updating of books of accounts as soon as the transactions are entered,
thereby facilitating instant statements and reports. It also facilities a real-time
and multi-user environment.
 Multi-lingual capability: Tally.ERP9 offers its users with the exclusive
capability of maintaining their accounts in any Indian language, viewing them
in another language and printing them in yet another Indian language.
 Flexibility: Tally.ERP9 comes with a flexible option to generate instant
reports for any given period, either month or a year or at any given point of
time besides providing the facility to switch between Accounting & Inventory
reports of the same company or between companies.
 Speed: Tally.ERP9 provides the capability to generate instant and accurate
reports, which assists the management to take timely and correct decisions
for the overall productivity and growth of the organization.

STARTING TALLY

Click on Start > Programs > [Link] 9 or

Double click on Tally ERP 9 icon from computer desktop.

The welcome screen [Link] 9 – Power of Simplicity appears while the software
[Link] Tally start up screen appears as shown [Link] is the place where we
start our accounting operations. This is known as The Gateway of Tally

Gateway of Tally is the place where everything in Tally starts and it is the same
place where everything Tally ends when you want to finish the work.

Tally Screen Components

The home screen of Tally ERP 9 contains the following components

1. Title Bar: It displays the Tally software that you are using.

Computerized Accounting with TALLY

2. Horizontal Button Bar: It helps to choose Language, Keyboard settings,
Control centre, support centre and Help.
3. Close Button: By click on this button or Ctrl+M, tally window closes
4. Task Bar: Displays the task of Tally ERP 9
5. Gateway of Tally: It displays menu, screen, reports. The GoT is divided into
two areas: Left-hand side area and Right-hand side.
6. Info Panel: Information panel displays the tally version, license details and
configuration details
7. Calculation Area:(Ctrl + N) Calculation area will be used for calculation
functions.
8. Buttons Tool Bar: It displays the buttons that enables for immediate
interaction with [Link] 9. It displays only the buttons that are applicable
to the current task.
9. Date and Time: Displays current data and time.

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COMPANY CREATION

Step 1: Gateway of Tally > Company Info > Create company

Step 2: Entering Company Information

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 1. Directory: It is a path where the company date will be stored on system. You
can change the path as per your requirements.
2. Name: Update the name of company that identifies in Tally ERP 9.

Primary Mailing Details

1. Mailing Name: The mailing name of company will be automatically updated

as per the given name of company, however the mailing name can be
changed as per the requirements.
2. Address: Update the complete address details of company
3. Statutory Compliance for: Choose the country name as India from the
given list of countries.
4. State: Choose the state from the given list of states.
5. Pin Code: Update the Pin Code of company, where it is located.

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Contact Details

1. Telephone No: Update Company landline/ Telephone number

2. E-Mail: Update the company e-mail id
3. Mobile No: Mobile number for contacting
4. Fax no: Update the Fax number
5. Website: Update the official website address of company

Books and Financial Year Details

1. Financial Year From: Update the financial year starting date, all Indian
companies financial year start from 1st April and ends on 31st March. Tally
considers the 12 months from the date given for financial year.
2. Books Beginning from: Specify the books beginning date.

Security Control

1. Tally Vault Password: By enabling Tally vault password, the company data
is secured in an encrypted form. The data is not accessible without the
password, if you lost the password that will be not recovered.
2. Use Security Control: Enabling securing control helps only authorized
users are allowed to enter/edit/delete the vouchers on Tally.

Base Currency Information

1. Base Currency Symbol: [icon name=”inr” class=”” unprefixed_class=””]

2. Formal Name: INR (India Rupees
3. Suffix Symbol to Amount: No
4. Add spaces between the amount and symbol: Yes
5. Show amount in Millions: Yes
6. Number of decimal Places: 2
7. Word representing amount after decimal: Paisa
8. No of decimal places for amount in words: 2

After updating all the required details of company, choose Yes to save the
entered details in Tally.

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Alter Company in Tally
Gateway of Tally >> Press Alt+F3 > Alter

Delete Company in Tally

Gateway of Tally > Alt+F3 > Alter > Alt+D.

Shut Company in Tally

Gateway of Tally > Alt+F3 > Shut Company
Shut a company in tally does not mean that delete a company, it means close.
After you work with company, press Alt+F1 if you choose more than one
company or choose Quit button to close the present company.

Configurations in Tally ERP 9

Gateway of Tally –> Press function key F12 or click on F12:Configure

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The configuration screen contains multiple settings that helps to configure the
required information for master creation, voucher entry, banking, printing, etc.
The important settings that available on configurations screen are
General: Under General configuration screen, you can configure the details of
country, name style, format of dates, format of number, Table configuration,
Import/export configuration and other options.
Numerical Symbols: Numerical symbols contains configurations of

 Symbols to use for positive numbers

 Symbols to use for negative numbers
 Symbols to use for debit amount
 Symbols to use for credit amount

Accts/ Inventory Info: Accounts and Inventory information contains the

configuration details of

 Master data
 Accounts and
 Inventory

Voucher Entry: Voucher entry contains the configuration details of

 Accounts
 Inventory
 Statutory

Invoice / Order Entry: Invoice and order entry contains the configuration
details of voucher entry for

 Accounts
 Inventory
 Statutory

Payroll Configuration:Payroll configuration contains the details of

 Add notes for employees

 Show statutory details
 Provide passport and visa details

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  Provide contract details
 Show resigned/retired employees
 Show employee display name

Banking Configuration: It contains the configuration details of

 Show all reconciled transactions in BRS till date

 Remove bank date on altering reconciled voucher
 Location of new bank statements
 Location of imported bank statements
 Location of payment instructions
 Show details before export/upload
 Allow reset on the upload transactions
 Location of new intermediate files
 Location of imported intermediate files

Printing: This configuration helps to configure the printing screens for

 Purchase transaction
 Payment Vouchers
 Sales transactions
 Receipt Vouchers
 Journal / Contra
 Debit / Credit note
 Reminding letters
 Confirmation statements
 Payment advice configuration
 Payroll
 Advanced configurations

E-Mail: This configuration helps to setup the e-mail server of company.

Data configuration: This configuration helps to define

 Location of data files

 Location of export files

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  Load companies on start up
 Select companies to preload on startup
 Location of language file
 Location of configuration file

Advanced Configuration: This configuration helps to define the client /

server configuration such as

 [Link] 9 acting as
 Enable OBDC server
 Port number
 Connection Configurations
 Log Configuration
 [Link] 9 configuration
 [Link] server proxy configuration
 Gateway proxy configuration

Licensing: This configuration helps to update the details of Tally license

 Activate License
 Reactivate License
 Configure existing License
 Get a Rental License

F11: COMPANY FEATURES

By pressing F11 key we can change the Company Operation Alteration.

Company features include Accounting features, Inventory features, Statutory

and Taxation, [Link] features and Add-On-Features.

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Accounting Features in Tally (F1: Accounts)

To open accounting features in Tally ERP 9, use any one of the following
methods.

 Path: Tally > Gateway of Tally > F11: Features > Accounting Features
 Function key: F1: Accounts (Press function key F1 from your keyword)

Accounting features is further divided in to 6 sections,

1. General
2. Outstanding Management
3. Cost/ Profit Centre Management
4. Invoicing
5. Budgets/ Scenarios Management
6. Other Features

The following screen displays after executing the accounting features in Tally

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Inventory Features in Tally ERP 9
Inventory features in Tally consists configurations / functions related to
inventory transactions and reports.
Inventory features in tally are furthered sub-divided into 7 functions, such as

1. General
2. Storage and Classification
3. Order processing
4. Invoicing
5. Purchase Management
6. Sales Management
7. Other features

How to start inventory features in Tally ERP 9

 Path: Tally > Gateway of Tally > F11: Features > Company Features >
Inventory Features or click on F2: Inventory.

F2: Inventory Features screen is displayed as shown below:

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Statutory & Taxation in Tally ERP 9
The statutory & taxation company features consist configuration and functions
related to statutory compliance for company in Tally ERP 9. The statutory
features are related to country specific and depends upon country during
the company creation in [Link] 9.

The following are the features that are available for statutory and taxation

 Goods and Service Tax (GST)

 Excise
 Value Added Tax (VAT)
 Tax deducted at Source (TDS)
 Tax collected at source

Gateway of Tally –> F11: Features –> Company Features –> Statutory
Taxation or press function key F3

The Screen is displayed as shown below:

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ACCOUNTING GROUPS

Group is a collection of ledgers of the same natures.

Tally software automatically create 28 groups which are used in the chart of
account. Out of 28 predefined groups in tally, 15 groups are primary groups
and 13 groups are Sub-groups.

The different types of groups are

1. Primary Groups
2. Sub Groups

Primary Groups:

Primary Group in Tally is main group, Groups are structured as hierarchical

organization. At the top of hierarchy are primary groups. Among 15 primary
groups, 9 groups are balance sheets items and 6 groups are profit and
loss a/c items.

Sub Groups:

Sub groups are part of primary group, sub groups can be divided into 13
groups.

List of Primary Groups and Sub groups in Tally

1) Capital Account
i) Reserves and Surplus (Retained Earnings)
2) Current Asset
i) Bank Accounts
ii) Cash in hand
iii) Deposits (Asset)
iv) Loans& Advances (Asset)
v) Stock in hand
vi) Sundry Debtors
3) Current Liabilities
i) Duties and Taxes
ii) Provisions
iii) Sundry Creditors

Computerized Accounting with TALLY

4) Fixed Assets
5) Investments
6) Loans (Liabilities)
i) Bank OD Accounts (Bank OCC Accounts)
ii) Secured Loan
iii) Unsecured Loan
7) Suspense Account
8) Miscellaneous Expenses (Asset)
9) Branches/Divisions
10) Sales Account
11) Purchase Account
12) Direct Income
13) Indirect Income
14) Direct Expense
15) Indirect Expense

Tally ERP 9 follows the single ledger concept of accounting and this leads to
direct contrast to subsidiary ledger accounting. So, all financial entries are
performed using ledgers or account heads. You can group all ledgers and
financial statements can be drawn according to requirements of company.
CREATING A GROUP

Step 1: Go to Gateway of Tally > Accounts Info

Step 2: Under Accounts info, choose the option Groups.
Step 3: Under Single Group menu, choose the option create to create single
group in Tally ERP 9
Step 4: On Group creation screen, update the following details.

 Name: Enter the name of group and press enter to continue

 Under: Choose the group name from list of groups as Sundry debtors (You
can move to group name pressing upper or lower key).

After entering the required details, press enter or Ctrl+A / A:Accept to save the
details.
Note: After creation of new group in Tally, created group displays under the
list of groups

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Display a Group in Tally
After groups are created in Tally ERP 9, you can display all the created
groups with details. However, in display mode, users are not allowed to edit/
alter the data.

Step 1: Path: Gateway of Tally > Accounts Info > Groups.

Step 2: Click on the option display under single group to displays groups in
Tally.

Step 3: Under list of groups names, choose the required group name and
click on that particular group to display on the screen.

Alter Group in Tally ERP 9

After groups are created in [Link] 9 application, the details can be altered
as per the requirements. To modify/ alter group in tally, refer below steps:

Step 1: Go to Gateway of Tally -> Accounts Info –> Groups.

Step 2: Under single group, click on alter option.
Step 3: You can search the group from the given search field and click on that
group name to modify the details.
Step 4: On Group Alteration screen, update the required details and click A:
Accept to save the details.

Computerized Accounting with TALLY

CREATING A LEDGER

Tally. ERP 9 automatically creates two ledger accounts i.e., Cash in Hand and
Profit & Loss Account. We can create the ledger accounts as per
requirements of an organization. We cannot create another profit & loss
account in tally, and we can create any number of cash accounts with different
names (Petty Cash).

Create ledger account in Tally ERP 9

Path: Gateway of Tally –> Accounts Info –> Ledgers –> Single Ledger –>
Choose Create
Step 1: From Gateway of Tally Screen, click on accounts info
Step 2: In the next screen, choose “Ledger”
Step 3: In the next ledger screen, choose the option create under single
ledger
Step 4: On ledger creation screen, update the following details

 Name: Enter the name of ledger account, and the name should be unique.
 Under: Choose the group name from list of group, that pertains to ledger
account.

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Display single ledger in Tally
Path: Gateway of Tally –> Accounts Info –> Ledgers –> Single Ledger –>
Choose Display

Alter Single ledger in Tally

Path: Gateway of Tally –> Accounts Info –> Ledgers –> Single Ledger –>
Choose Alter
On select ledger screen, choose the ledger account from the list of ledgers
Now modify/ alter the required details for ledger account and click on A:Accept
to save the changed details in Tally ERP 9.

Create Ledgers in Tally (Multiple Ledgers)

Step 1: Goto Gateway of Tally and Choose Accounts Info.
Step 2: Under account info, choose the option Ledgers
Step 3: Click on create under multiple ledgers option to create multi ledgers in
Tally
Step 4: On multi ledger creation screen, enter the following details
Under Group: Choose the Bangalore Debtors
under the list of groups, however you can search group by entering the group
name in the given under group text field.

Computerized Accounting with TALLY

Step 5: Under Group: Bangalore Debtors screen, update the following details.

1. Name of Ledgers: Enter the name of ledger that you like to create in Tally
2. Under: The under group field will be automatically filled by Tally as
Bangalore Debtors ( As we are creating ledgers under Bangalore Debtors).
3. After entering the details, press enter to continue. You will get messages
as Accept: Yes or No, choose Yes to accept the updated details in
[Link] 9.

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Display Multiple Ledgers in [Link] 9
Path : Gateway of Tally –> Accounts Info –> Ledgers –> Multiple Ledgers
(Display).

Alter multi ledgers in Tally ERP 9

Path: Gateway of Tally –> Accounts Info –> Ledgers –> Multiple Ledgers –>
Choose Alter
From the list of the groups, choose the required group name for alteration.
On multi ledger alteration screen, you can update the following details

 Add or delete the ledgers

 Opening Balance – Dr/Cr

ACCOUNTING VOUCHERS IN TALLY (Voucher Entry)

Voucher in Tally is a document having all the details of a financial transaction and is
required for recording them in the books of accounts. They can be easily created and
modified.

You can find types of Tally vouchers option in ‘Gateway of Tally’ under
‘Transactions’. There are few predefined vouchers in tally and can be viewed as

Computerized Accounting with TALLY

Gateway of Tally > Display > List of accounts > Ctrl V [Voucher types].

Types of vouchers in Tally

Voucher type Shortcut key

Sales F8
Purchase F9
Contra F4
Payment F5
Receipt F6
Journal F7
Credit Note Ctrl + F8
Debit Note Ctrl + F9
Physical Stock Alt + F10
Material In Ctrl + W
Material Out Ctrl + J
Delivery Note Alt + F8
Receipt Note Alt + F9
Sales Order Alt + F5
Purchase Order Alt + F4

Accounting vouchers in Tally can be further classified as under.

1. Sales Voucher

Whenever you sell a product or service, you record sales entries. In

tally, the sales are recorded through the sales voucher.

2. Purchase Voucher

Whenever you purchase a product or service, you record the

purchase entry. In tally, this is recorded through the purchase
voucher.

3. Payment Voucher

Various payments made by the company in cash and through the

bank are recorded in payment voucher.

4. Receipt Voucher

When you receive payment, you can record that transaction in the
receipt voucher.

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 5. Contra Voucher

Contra Voucher is used when either side of the entry has cash, bank
or multiple banks involved. Generally, any cash deposit, withdrawal,
transfer amongst different accounts is recorded in a contra voucher.

6. Journal Voucher

This voucher can be used for multiple reasons. Some use it for sales,
purchases, depreciation; any adjustment entry can also be done using
this voucher in Tally. This voucher is available in both accounting
and inventory vouchers in Tally. In inventory mode, the entry relating to the
movement of goods can be passed.

7. Credit Note Voucher

Credit Note entry is passed when there is a sales return transaction.

8. Debit Note Voucher

Debit Note entry is passed when there is a purchase return transaction.

Inventory vouchers in Tally can be further classified as under.

1. Physical Stock Verification

Generally, businesses count physical stock verification periodically and keep a record
of the same through this voucher

2. Material In and Material Out Voucher

This voucher is widely used for those businesses where workers are involved.

3. Delivery Note

This voucher is used to record the delivery of goods.

4. Receipt Note

This voucher is used to record the receipt of goods from the suppliers.

UNCONVENTIONAL / NON-ACCOUNTING VOUCHERS

1. MEMO VOUCHER ( Ctrl + F10)
This voucher is used in special cases where we want to record a
specific transaction but does not actually required to affect books of
accounts or cash book or balance of any ledger.

Computerized Accounting with TALLY

2. OPTIONAL VOUCHER
This is another non-accounting voucher. Optional voucher is not a
voucher type, but it is an option available in every other regular
voucher type like Contra, Payment, Receipt, Journal, Sales and
Purchases etc.

3. REVERSING JOURNAL
Reversing Journals are special journals that are automatically
reversed after a specified date.

4. POST DATED VOUCHER

While entering vouchers, we can post-date them, and Tally will not
update the ledgers until the date specified in the voucher.

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Computerized Accounting with TALLY