TALLY PRIME

SHOBHA M
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M
SHOBHA M

CONTENTS

1. Accounting

a. Meaning of Accounting

b. Purpose of using Accounting

2. Types of Accounts

a. Real a/c

b. Personal a/c

c. Nominal ac

3. Tally Prime

a. Meaning of Tally Prime

b. Advanced feature of Tally Prime

4. Ledger & Accounts Information’s

5. Company creation and ledger creation

6. Accounting vouchers

a. Meaning of voucher

b. Types of voucher

c. Problems on based vouchers & practical problems

7. Stock and cost creation

a. Meaning of stock summary

b. Problems on stock creation

c. Problem on cost creation & practical problems

8. Inventory vouchers

a. Meaning of inventory voucher

b. Types of inventory voucher

c. Problems related to inventory voucher

9. Cost Center and Cost Category

a. Creation of Cost Center and Cost Category

b. Posting Entries on Cost Center in Payment Vouchers

c. Viewing the Cost Category Summary Reports

10. Payroll in Tally Prime

11. Goods and Service Tax

1
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M 12. Other Financial Reports

ACCOUNTING

Meaning of Accounting

Accounting is a science or art; it has certain basic principles of its own such as
recording, Classifying, and summarizing to get correct results and also the
practical application of knowledge in maintaining the proper books of accounts.

Accounting principles board says that “The information primary as

financial nature about economic entities, that is needed to be useful in making
economic decisions”

Purpose of using the Accounting

By using accounting information and reports, can be easily find out that is a
person who is running business is going in profit or loss? What he owns? What he
owes? Current financial position, money to give sundry creditors future business
position etc.

Here you 8 branches types of accounting such as

1. Financial Accounting: It is mainly confined to the preparation of financial

statements like Profit & Loss A/c, Balance Sheet, Financial reports,
Graphs, Ratios etc., for the use of outsiders like Shareholders. Creditors,
Debenture holders, Companies, banks, finance companies etc.,
2. Management Accounting: Here the accounting is based on management.
The accounts which provides important information to the management.
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

2
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M production. The objective of cost accounting is to help the management fix
the prices and control the cost of production. It also pinpoints any wastages,
leakages, and defects during manufacturing and marketing processes.

4. Auditing: Auditing is a branch of accounting where an external certified

public accountant known as an Auditor inspects and certifies the accounts
of the business for their accuracy and consistency. Sometimes internal
auditing is also practiced where an employee of the same company or an
external personnel audits the accounts regularly and aids the management
keep accurate records for audit purposes.

5. Tax Accounting: Tax Accounting deals with taxation matters. Its functions

include the preparation and filing of various tax returns and dealing with
their legal implications. Tax accountants aid in minimizing tax payments and

also help financial accountants in preparing financials for tax reporting to

various authorities. Tax accounting involves consultancy regarding the effect
of taxes on different aspects of business, minimizing tax through legal ways,
and also verifying consequences of tax payable on business. We usually call
this practise as tax planning. There are big difference between tax planning
and tax evasion. Broadly, tax planning means trying to minimize tax liability
within the legal boundaries. Whereas tax evasion is a crime. When a
company enters into practises to evade tax, the tax authorities may put
them in trouble.

6. Fund Accounting: It deals with keeping records for funds of non-profit

business entities. Most importantly, separate fund accounts are maintained
for separate works like welfare schemes of different nature to ensure proper
funds utilization. If such an entity has raised ‘x’ funds for helping educate
children and ‘y’ fund for widow womens. Fund accounting ensures that the
funds for the designated causes are utilized for same purpose without any
deviations.

3
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M
7. Government Accounting:This branch of accounting is prevalent in Central

Government (National Government) and State Government budget

allocations and utilization. Keeping records ensures proper and efficient
utilization of the various budget allocations and safety of public funds.

8. Forensic Accounting: Forensic Accounting, also known as legal

accounting, enables calculating damages or settling disputes in legal
matters. It involves deep investigations, carrying out recalculations to
evaluate the accounting. Such accounting techniques normally comes into
play when there are suspects of fraud, mismanagement inside an entity.

9. Fiduciary Accounting: It is the accounting and evaluation of a third party’s

business, and property maintained under the guardianship of another
person. To further clarify, assume there is a company which has filed for
bankrutcy. In such situations, whole of the function of accounting goes
under the guardianship of a person or set of person who are not directly
related to the company. We are referring such a branch of accounting as
fiduciary accounting.

4
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

TYPES OF ACCOUNTING

There are 3 types of accounts known as

1. Real account

2. Nominal account

3. Personal account

The transaction in the journal is recorded on the basis of the rules

of debit and credit, above the categories of these accounts.

1. REAL A/C = IT INCLUDES

Purchases of any goods or fixed assets

Sales of any goods or sale of fixed asset

Purchases returns - goods or asset you purchased , which you will return back

Sales returns - goods which you sold , if it comes come back to you

Rule of Real Account

Debit – what comes in

Credit – what goes out

FOR EXAMPLE
1. purchased furniture for RS.500000
2.purchased goods for 25000, on credit from abc and co.
3.purchased goods from anuradha industries for cash 150000
4.purchased goods returned to abc and co 5000
5 sold goods for cash of Rs. 150000
6.sold goods to xyz and co for 75000 on credit
7.sold goods returned back from xyz and co. 10000

5
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Accourding to the rule of Real a/c

Debit What comes IN furniture a/c

credit what goes out cash a/c

Debit What comes IN purchase a/c

credit what goes out abc and co

Debit What comes IN purchase a/c

credit what goes out cash a/c

Debit What comes IN abc and co

credit what goes out purchase return a/c

Debit What comes IN cash a/c

credit what goes out sales a/c

Debit What comes IN xyz and co

credit what goes out sales a/c

Debit What comes IN sales return a/c

credit what goes out abc and co

6
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Date
/Sl.No Particulars Debit Credit

1 Furniture A/C Dr 500000

To Cash A/C 500000

(Being Furniture Purchased)

2 Purchase A/C Dr 25000

TO Abc And Co A/C 25000

(Purchased Goods From Abc
And Co On Credit)

3 Purchase A/C Dr 1500000

To Cash A/C 150000

(Breing Goods Purchased
Goods From Anuradha
Industries For Cash
4 Abc And Co Dr 5000

To Purchase Return A/C 5000

(Being Purchased Goods
Returned Back)
5 Cash A/C Dr 150000

To Sales A'c 150000

(Being Goods Sold For Cash)

6 Xyz And Co A/C Dr 75000

To Sales A/C 75000

(Being Goods Sold To Xyz And
Co)

7 Sales Return A/C Dr 10000

To Xyz And Co 10000

(Being Sold Goods Are
Returned Back)

7
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

2. PERSONAL ACCOUNTING

Personal Means

It Is Individual Person
It Is Organisation
It Is Corporatebodies
It Is Joint Stock Company

Rule Of Personal Accounting

DEBIT – THE RECEIVER

CREDIT - THE GIVER

Note : Every Transactions In Accounts Will Be Taken As 2 Nature Of Accounts

1 Real A/C & Real A/C Purchase And Sales

One Entry Will Be For Personal And Other Entry Will Be

2 Real A/C And Personal A/C
For Real A/C

3 Personal And Personal A/C 2 Entries Also Will Be For Personal

One Entry Will Be For Nominal A/C And Other Entry Will
4 Nominal And Real A/C
Be For Real A/C
Accourding To This Nature Of Accounts, You Have To Prepare Journal Entries In Books

EXAMPLES OF PERSONAL A/C

1, Deposited Money In Bank 20000
2,Amount Received From Any Person Or Any Company
3,Amount Paid To Any Person Or Any Company
4,Funds Transferred From One Person To Another Person Or From One Company
To Another Company Or From One Bank To Another Bank
5,Withdraw Amount From Bank

8
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Nature Of Account
1 Question
Personal Account Deposited Money In Persoanl A/C & Real A/C
Rule Bank
Personal Account Who Is The Receiver Bank A.C Debit

Real A/C What Is Going Out Cash A/C Credit

Jounal Entry

PARTICULARS DEBIT CREDIT

Bank A/C Dr 2000
To Cash A/C 2000
(Being Money Deposited
In Bank)
NATURE OF
2 QUESTION ACCOUNT
Amount Received From Any Person Or Any
Ex Company Persoanl A/C & Real
Question AMOUNT Received FROM Mr.Akash 50000 A/C

Personal
Account Who Is A Giver Mr.Akash A/C

Real A/C What Comes In Cash A/C

Jounal Entry

Particulars Debit
Cash A/C Dr 5000
To Akash A/C
(Being Amoiunt Received From Mr.Akash)

9
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M 3 Question Nature Of Account
EX Amount Paid To Any Person Or Any Company Persoanl A/C & Real
Question Amount Paid To Abc And Co 50000 A/C

Personal
Account Who Is Receiver Abc And Co

Real A/C What Goes Out Cash A/C

Jounal Entry

Particulars Debit
Abc And Co A/C Dr 50000
To Cash A/C
(Being Cash Paid To Abc And Co)

4 Question

4,Funds Transferred From One Person To Another

Person Or From One Company To Another
Ex Company Or From One Bank To Another Bank
Funds Trasnferred From Anuradha Industries To
Question Abc And Co 250000

Personal
Account The Receiver Abc And Co A/C
Personal
Account The Giver Auradha Industries

Jounal Entry

10
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M Particulars Debit
Abc And Co A/C Dr 250000
To Auradha Industries
(Being The Funds Transferred From Anuradha
Industries To Abc And Co)

5 Question

Ex Withdrawn Money From The Bank

Question Withdrawn Money From The Canara Bank 20000

Personal
Account The Giver Canara Bank

Real A/C What Comes In Cash A/C

Jounal Entry

Particulars Debit
For Cash A/C Dr 20000
Office
Canara Bank A/C
Use
(Being The Funds Transferred From Anuradha
Industries To Abc And Co)

Withdrawn Amount From Bank For Personal Use

Nominal Drawings A/C Dr Expenses

A/C
To Cash A/C

Nominal A/c
It includes with expenses and losses , incomes and gains , any expenses you do
it is nominal and incomes you get again it is a nominal
Rule of Nominal A/C
DEBIT : ALL EXPENSES AND LOSSES
CREDIT : ALL INCMOES AND GAINS
11
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Examples
salaries paid 25000
rent paid 400000
wages paid 10000
electriccity bill paid 5000
interest recevied 120000
commission received 18000
discount received 50000

Profit And Loss (Nominal A/C)

(DR)Particulars Amount Particulars (CR) Amount
Salaries A/C 25000 Interest Recevied A/C 120000
Commission Recevied
Rent A/C 40000 A/C 18000
Wages A/C 10000 Discount Received A/C 50000
Electricity Bill A/C 5000 Net Loss Xxxx
Net Profit 108000

Total 188000 Total 188000

0

QUESTION

Travelling Charges 100 & Washing Charges 500

Mechanics Service Charge

Journal Entry

Particulars Debit Credit

Travelling Exp A.C Dr 100
Washing Charges Dr 500
To Cash A/C 600

If Is Paid By Cheque Then Consider As A Bank

12
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

TALLY PRIME

TallyPrime is a business management software that provides a complete business

solution to manage the growing needs of small and medium businesses. Using
TallyPrime, you can manage invoicing, accounting, inventories, banking, taxation,
payroll and much more. The robust features understand your business needs and
simplifies the lives of business owners through simple to use software, insightful
reports, multi-task capability and much more.

With a wide range of features, the all-new TallyPrime can be your perfect business
companion. Here is the list of TallyPrime’s features:

• Simplified Interface
• Insightful Business Reports
• Invoicing & Accounting
• GST / Taxation
• Inventory Management
• Cash Flow Management
• Multitasking Capabilities
• Go To feature
• Access business data Online
• Secured Data

13
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

COMPANY CREATION AND LEDGER CREATION IN TALLY PRIME

Maintaining your business transactions on a day-to-day basis is critical to

your business. To keep a record of all your business transactions, you need to
first create a company in TallyPrime. Through the company, you can also view
and update all your transaction entries, as needed, and go through the
financial reports based on the transactions that you maintain.

TO CREATE A COMPANY

CLICK ON COMPANY OPTION ( ALT K )

CLCIK ON CREATE

14
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

0NCE YOU CLCIK ON CREATE YOU WILL COMAPANY CREATION SCREEN JUST
LIKE BELOW

FILL THE DETAILS AND ACCEPT, FURTHER DON’T DO ANY CHANGES AT PRESENT,
NO NEED TO CONFIGURE THE OPTIONS NOW JUST DO ENTER AND ACCEPT.

ALTER: This option is used to do any modifications in the company details

SHUT: This option is used to shut the company (ctrl F3)

SELECT: This option is used to select the company (Alt F3)

SECURITY: This options is used to give password protection to your company

LEDGERS AND GROUPS

The actual accounts heads are called ledger. In Tally Prime the ledger is profit & loss a/c &
cash a/c will be created automatically.

A ledger is an book, in which all the a/c’s are maintained, it is books of final entry, in the
since that all the transaction are final recorded in its ledger, from the ledger debit are
closing balance in each a/c is reflected in the Trial Balance which should be Tallied. If any
difference is there. It means there is any mistake in any of the a/c, which needs to be

15
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Steps to ledger creation

Gateway of tally > Masters > Create

Accounting Masters > Ledgers > Create

LEDGERS & ACCOUNTS INFORMATION’S

1. Capital account:

This is a primary to hold the capital & reserves of the co. accounts like

partners capital, proprietors etc., belong to his group.

a. Reserve & surplus:

This is a sub group of capital account, accounts like capital reserve,

depreciation, reserves etc., this group is also called as retained earnings.

2. Current assets:

This is a primary group. All assets of the Company is placed under this group.

a. Bank account:

This is the first sub group of current assets. Any bank savings or current

accounts for example SB a/c, current a/c can be placed under this
16
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M group.

b. Cash-in-hand:

This is the second sub group of current assets, this will hold cash a/c

only, and cash a/c is automatically created in this group, when a

company is crested.

c. Deposits:

This is the third sub group of current assets fixed deposits,

recurring deposits and rental deposits etc., can be created in this

group.

d. Loans and advances:

This is a fourth sub group of current assets, accounts

related to advances against salaries, work contracts, advances to

purchases of fixed assets etc., can be created in this group.

e. Stock –in-hand:

This is the fifth sub group of current assets, this used to hold

the opening and closing stock figures of certain accounts like Raw

materials, work in progress, finished products etc.,\

f. Sundry debtors:

This is the sixth sub group of current assets, this group is

used to create the accounts for our customers (all parties to whom

credit sales are made)

3.Current liabilities:

This is a primary group to hold the outstanding and statuary

liabilities of the company such as ESI, PF, TDS etc. It has 3 sub

groups

17
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

a. Duties and taxes:

This is the 1st sub group in current liabilities, accounts

of trade duties and

b. Provisions:

This is the 2nd sub group of current liabilities. It is used to hold tax,

provision in this group for example provisions for depreciation,

provision for depreciation, provision of taxation.

c. Sundry creditors:

This is the 3rd sub of the current liabilities, this group is used to create

a/c for our suppliers call parties to whom credit purchases are made.

4.Fixed assets:

This is a primary, accounts like building, land, furniture, machinery

etc., can be credited under this group.

5.Investments:

This is a p4rimamry group it holds the accounts of overall investments

like shares, bonds, debentures government securities.

6.Loans:

This is a primary group. a/c’s of loans taken by the company are

created in this group, it has three sub group.

a. Bank over draft:

This is the 1st subgroup of loans a/c’s of loans, over draft accounts

of a bank like hypothecation accounts, bill discount a/c’s etc., can be

opened under this group.

18
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

b. Secured loans:

This is the 2nd sub group of loans a/c’s of loans taken by the co.

from financial corporation for example sundanram fiancé, ashok

Leyland financial, banks etc., against its fixed assets are created

under this group

c. Unsecured loans:

This is the third sub group of loans, a/c’s of loans taken by the co.

unconditionally from outside parries including debtors and partners can

be created under this group

7.Suspense account:

This is a primary group, a/c of money received or paid by the

co. in suspense, if an advance amount like traveling expenses is paid to

marketing executive is come under the suspense a/c. this is a balance

sheet item.

8.Miscellaneous expenses:

Preliminary and preoperative expenses which have been

capitalized to the extent of not writing them off in the profit and loss

a/c will fall under this group it is rarely used.

9.Sales account:

This a group, a company sales come under this group like sales a/c,

like computer sales, cement sales, tyre sales, car sales, bricks sales.

10.Purchases account:

This is a primary group, a co. purchases come under this group like

purchases a/c like machinery purchase, printer purchases, furniture

purchases, etc.,

19
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

11.Direct income:

This is a primary group it holds the account of the direct income like

income due to sales of goods.

12.Indirect income:

This is a primary group, the a/c’s of indirect income like rent

received, interest received, commission received etc., can be

created under this group.

13.Direct: expenses:

This is primary group. The account related to

payments of wages, freight, collie, carriage, electricity bill, water bill

etc., can be created under this group.

14.Indirect expenses:

This is a primary group. The a/c’s like payments

made for advertisements, maintenance of vehicles, salary paid to

staff, depreciation of fixed assets. Traveling expenses etc., can be

created under this group.

15. Branch division

This is a primary group, a/c’s of branches, divisions sister

concerns, subsidiaries etc., of the existing co. can be created under

this group.

Classification of ledgers

Deposits Duties and taxes Indirect incomes

Fixed deposit Current Sales tax Income tax Commission received

deposit Savings Commercial tax Interest received
banking Dividends
Discount received

20
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M
Currents
Fixed assets Current assets Direct expenses
liabilities
land & building
sundry debtors
plant & machinery
Stock Car expenses
fixtures Bills
Pre-paid House hold
good will motor payments
expenses expenses Wages
car furniture Sundry
Bills receivable Packages Driver
investments creditors
Stock-in-trade Carriage inward
fitting Book draft
Book debts Pre- Fright charges
Tools
paid insurance
Land

Indirect expenses

Rent Donation
Telephone Repairs
Telegram Interest on deposits in a bank
Postage Entertainment allowances
Stationery Allowed discount
Brokerage Commission paid
Office expenses Interest paid
Salaries Audit fee
Charities General expenses
Gift ton relatives Sundry expenses
Drawings Accountancy work
Depreciation Carriage outward
Legal expenses Interest on capita
Financial consultancy Water bill & light bill
service

21
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Accounting Voucher

A vouchers is a basic recording documents, daily business transaction are entered in

tally through vouchers, it is a key to all business transaction through vouchers called
vouchers entry, tally as per defined vouchers like.

Types of vouchers

1. Contra voucher F4

2. Payment voucher F5

3. Receipt Voucher F6

4. Jounal voucher F7

5. Sales voucher F8

6. Purchase Voucher F9

7. Credit Note Alt F6

8. Debit Note Alt F5

Explanation inDetail

1. Contra voucher : Banking transactions like depositing Money into bank, withdrawing
money from one bank. Fund transfers from one bank to another is entered under
Contra voucher.

2. Payment voucher: All direct and indirect expenses are entered under payment
vouchers, amount paid to any person is also entered under payment voucher.
Purchase of fixed assets is entered under payment voucher.

3. Receipt voucher: All direct and indirect incomes are entered under receipt vouchers,
amount received from any person is also entered under receipt voucher. Sale of fixed
assets is entered under receipt voucher.

4. Journal voucher: Adjustment transactions like depreciation and appriciation on fixed

assets are entered under journal voucher, entries like fund transfers from one
company to another company are entered under journal entries.

22
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

5. Sales voucher: Cash sales and credit sales of goods are entered under sales voucher.

6. Purchase Voucher: Cash purchase and credit purcahse of goods are entered under
purchase voucher.

7. Credit Note Voucher: Cash and Credit sales returns are entered under credit note
vouchers

8. Debit Note Voucher: Cash and Credit purchase returns are entered under debit note
vouchers

PROBLEMS BASED ON VOUCHERS

I) From the following transaction prepare a receipt Voucher entries for

the Akash and co.

1) 2000/- The amount received from Mr. Akash

2) 2000/- Cheque and Rs 500/- cash given by Arun and co..
3) 1500/- Commission received by cash.
4) 1000/- Sold furniture for cash
5) 2500/- Interest received by cheque

II From the following transaction prepare a payment voucher entries for

the Anitha industries.

1) 4700/- Cash paid for bonus

2) 15000/- Salary paid by cheque
3) 4500/- Paid for Rent
4) 5000/- Paid for electronic charges by Karnataka bank cheque
5) 7000/- Purchased on raw materials. Here 3500/- paid by SBM
cheque and 3500/- Paid by cash.
6) 4500/- Paid to kavya

23
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

III From the following transaction prepare a contra voucher sentries

for the Saritha and co.

1) 15000/- Cash withdrawn from canara bank for office use.

2) 10000/- State bank cheque given to canara bank for fund transfer.
3) 20000/- Canara bank cheque and cash 2500/- deposit to state bank.
4) Cash deposited into canara bank of 50000/-

5) Demand draft of canara bank deposited into Karnataka bank of

17000/-
IV) From following transaction prepare a journal voucher and credit note
and debit note voucher

2) Depreciation 0f 2500/- on furniture and 300 on machinery is to be

entered.
3) Anuradha & co. returns the purchased goods worth 5000/- as

damaged goods.
4) 12000/- worth goods purchase return to Akash and co. due to late in

delivery.
5) Fund transferring is made for adjustment in business by barrowing

3500/- from Akash and co. and given to Anuradha and co.
6) 7000/- worth of sold goods return back form the Anitha industries

V) From the following transaction prepare a purchase voucher

1) Purchased goods for cash 15000/-

2) Purchased goods on credit from Mr. Praveen 20000/-

3) Purchased goods for cash from Saritha 7000/-

4) Purchased goods for cash 5000/-

24
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M
VI) From the following transaction prepare a sales voucher

1) Sold goods for cash 45000/-

2) Sold goods to kavya and co. 100000/-

3) Sold goods to Saritha and co. on credit 150000/-

4) Sold goods to Varun 35000/- for cash

PRACTICAL OR ASSIGNMENT PROBLEMS

I Journalize the following problems transaction

2. Saritha started business with cash 100000/-

3. Purchased goods for cash 20000/-

4. Purchased goods on credit from Anand 10000/-

5. Sold goods for cash 50000/-

6. Sold goods on credit to Chandra 1000/-

7. Chandra returned goods 1000/-

8. Deposited cash in bank 25000/-

9. Took loan from mohan 15000/-

10. Gave charity 150/-

11. Gave loan to kavya 5000/-

12. Received commission 1000/-

13. Paid salaries 45000/-

II Journalize the following transactions in the books of m/s chaitra

1. Commenced business with cash 150000/-

2. Opened a bank a/c in Mysore bank and deposited 10000/-

3. Purchased goods for cash 40000/-

4. Sold goods for cash 6000/-

5. Purchased from Vinay 5000/-

6. Paid traveling expenses 2000/-

7. Paid office rent and factory rent 5000/-

8. Paid stationery 1500/-

25
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

III) Journalize the following transactions in the books of saritha

1. Started business with 500000/-

2. Deposited in canara bank 15000/-
3. Purchased goods for cash 10000/-
4. Purchased furniture and machinery 30000/-
5. Received commission 5000/-
6. Received discount 2500/-
7. Withdrawn from bank for personal use 10000/-
8. Paid interest 3000/-
9. Sold goods on credit to chaitra 40000/-
10. Paid salary 6000

IV) Journalize the following transaction in books of Mr. shashank

1. Shashank started business with 150000/-

2. Paid for insurance 50000/-
3. Paid office rent 4500/-
4. Paid for electronic charges 2500/-
5. Received amount from customer 15000/-
6. Discount allowed 2500/-
7. Paid for stationery for 5000/-
8. Paid salary 900

26
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

27
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

COST ACCOUNTIG AND COST CENTERS

Meaning of cost:

The term cost means expenditure that is the amount of expenditure

incurred on or attributable to a given thing. Thus cost refers to expenditure
incurred in the manufacture of a product and or service.

Elements of cost:

1. Prime cost = Direct Material + Direct labor + Direct Expenses

2. Factory cost = Prime Cost + Factory Overheads

3. Cost of Production = Factory Cost + Administrative Overheads

4. Total Cost = Cost of Production + Selling & Distribution Overheads

The difference between the total cost and total sales represents Profit or
Loss. All these terms are explained in detail.
Direct Material: Direct material is that material which can be conveniently identified
with a particular cost unit. Direct material becomes a part of the f finished product.
For example: cotton used in textile mills, steel used in manufacture machines,
Timber used in manufacturing furniture, etc.

Direct Labour: Direct Labour is a labour who is directly engaged on productive

jobs or which can be directly identified with jobs. In other words, it is the wages
paid to workers engaged in production.

Direct Expenses: All expenses other than direct material and direct labour that
are specially incurred for a particular product or process treated as direct expenses.

Factory Overhead: It includes all the indirect expenses incurred in connection

with manufacturing operations. For example factory rent, repairs of plant and
machinery, factory lighting, depreciation on plant and machinery.

28
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M Administrative Overheads: This is the expenses incurred in formulation of
policies, planning and controlling the functions directing and motivating the
personnel of an organization in the attainment of its objectives.
For example: office staff salary, office rent, office lighting, depreciation on
furniture.

Selling & Distribution Overheads: These are the expenses incurred in

connection with promotion of sales and distribution of goods. For example:
advertising, salesman salary, travelling expenses, delivery van maintenance,
warehouse charges.

COST CENTER AND COST CATEGORY

Cost center

Cost center is defined as a location, person or items of equipments for

which costs may be ascertained and used for purpose of cost control. In simple
words int is a part of an enterprise to which costs can be charged.

Cost category:

It is a type of category in which cost centers are incurred,

Payments belonged to the cost category and cost centers

29
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M Cost category Cost center
Bus BTS bus
KSRTC bus
Volvo bus
Telephone Airtel
BSNL
Reliance
Vodaphone
Salary Anitha
Saritha
Kavya

I) Paid for Bus 20000/-

BTS 5000/- KSRTC 5000/-
Volvo 10000/-

II) Paid for Telephone bill 18000/-

Airtel 5000/-
BSNL 7000/-
JIO 3000/-
Vodaphone 3000/-

III) Paid for Salary 60000/-

Anitha 20000/- Saritha 20000/- Kavya 20000/-

30
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

To enable cost center and cost category

Click on Company

Go to F11 features

Show more features: Yes

Show more Features Yes

Enable cost center: Yes

Accept

Steps involved in cost category.

GOT > Master > Create > Click on Show More > Cost Category > Create New

Name: Bus
Allocate revenue items: Yes
Allocate Non revenue items: No
Accept

Steps involved in cost category.

GOT > Master > Create > Click on Show More > Cost Center > Create New

31
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M Cost center

Category: Bus

Name: BTS Under: Primary

Accept

After creating cost center and category you need to do journal entries in
payment voucher

GOT > VOUCHERS > PAYMENT VOCUHER

1. Travelling Expenses A/c Dr

To Cash A/c

32
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

2. Telephone bill a/c Dr

To Cash A/c

3. Salary a/c Dr
To cash a/c

33
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

After Passing The Entries In Payment Vocuher

To See The Display Of The Entries Click On Daybook from GOT(Gate of TALLY)

Clcik Alt F1 – To see Indepth

To See The Category Summary of Cost

GOT > Display More Reports > Statement of Accounts > cost Centers > category
Summary

Practical problem

Cost category Cost center

2.
Purchases Purchase of materials
Carriage inwards
Indirect wages
Rent and Rates – f actory
Factory Overheads Salary – f actory
Factory Expenses
Indirect Material
MD’s Remuneration – f actory
Of f ice and Adm Overheads Rent and Rates – of fice
Salary – of f ice
Of f ice expenses
Director’s f ee
MD’s Remuneration - of fice
Selling and Distn Overheads Selling expense
MD’s Remuneration – selling
Advertisement
Travelling expenses
Van and service charges

34
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

INTRODUCTION TO INVENTORY

CREATING PURCHASE INVOICE

Inventory information of stock summery

Stock summery in tally gives the report of various stock items under their
respective stock group.
The stock summery gives the quantity of stock items, rate & their value
of amount.
To see the stock summery of stock group follow the below steps..

Stock group Stock categories Stock items Units

Oil Sunf lower

Gold winner
Apple
Fruits Grapes Liters
Mango Kg
Foods Carrot Kg
Vegetables Beans Liters
Potato
Sof t drinks
Drinks Hot drinks

Computers Mouse
Keyboard Numbers
Monitor
Electronic
Washing machine LG Numbers
Samsung
IFB

Books Classmate Bundles

Chandra’s
Stationery Naveen

Pens Reynolds Pieces

Cello
Parker

35
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

To enable stock group and categories

Click on Company

Click on F11 Features

Show More Features: Yes

Showe All Features: Yes

ACCEPT
Steps involved

GOT > MASTER > CREATE > CLICK ON SHOW MORE

Stock Group

Name: Foods Under: primary

Accept

Stock category

Name: Oil

Under: primary
Accept

36
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Stock items

Name: Sunflower Under: Foods Category: Oil Units: liter

To create units press Alt+c

Give the name and formal name of units and accept.

After creating all the stock Iteams

Goto Purchase invoice (F9)

Create a Purchase for all stock items

37
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Practical problem

Create the stock groups, stock category according to the table

Stock Stock category Stock item Units

group

Kids wear Frock

Baby suits

Meters
Salvar
Textiles Ladies wear Sarees Or

numbers

Gents wear T-shirts

Jeans
Pants

38
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

INVENTORY VOUCHERS

Inventory vouchers records the receipt and issues of goods stock, the transfer
of stock from location to another location.This inventory voucher may also
perform their functions in the inventory system as accounting voucher in the
accounting system.

There are 7 types of inventory vouchers

1. Stock journal voucher

2. Purchase order

3. Sales order

4. Rejection In voucher

5. Rejection Out voucher

6. Receipt Note voucher

7. Delivery Note voucher

Stock journal voucher:

Movement of goods from location to another location related entries are recorded in
Stock Journal Voucher.

To create Stock Journal Voucher

GOT > VOCUHERS > UNDER THE DROP DOWN OF JOURNAL > STOCK JOURNAL
(ALT F7)

Enter The Stock Item Name, Godown Name, Quatities And Rate Per Unit.

Both The Side Consumption And Production Same Details Should Be Entered Excpet
A Godown Name. Only The Godown Name Will Be Different

39
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

I) Create a stock journal voucher by the help of items given below,

that were transferred from the head office to its branch office.

Item Quantity Rs
Monitor 50nos 5000/-
Mouse 45nos 350/-
Hard disk 38nos 2000/-
Key board 20nos 2500/-
Mother board 25nos 3000/-
Television 15nos 15000/-
Washing 2nos 20000/-
machine
Furniture 5nos 12500/-

40
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Purchase order:

When the order is placed with the suppliers for the supply of goods, the items,
quantities, date of receipt, and so on, details are given with the Purchase Order
Number. Later, when these goods are received, the Purchase Order is tracked for
the Order Details either in the receipt note or in the purchase Invoice.

To create a purchase order

GOT > VOCUHERS > UNDER THE DROPDOWN OF PURCHASE > PURCHASE ORDER
(CTRL F9)

Enter the Party's A/c Name . under Sundry Creditors

3. Enter the Order No .

4. Select the Name of Item from the List of Stock Items , or press Alt+C to
create a new stock item.

5. Enter the Quantity of the item, as required.

6. Enter the Rate of the item.

41
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

PRACTICAL QUESTION

Item Quantity Rs
Monitor 50nos 5000/-
Television 15nos 15000/-
Furniture 5nos 12500/-
Key board 20nos 2500/-
Dust covers 5nos 2500/-
Mother board 40nos 300/-

AFTER DOING THIS IN PURCHASE ORDER DO THE SAME IN PURCHASE

INVOICE (F9)

Sales Order

A sales order is a document generated by the seller upon receiving a purchase

order from a buyer specifying the details about the product or service along with
price, quantity, buyer details like the shipping address, billing address, mode of
payment and terms and conditions.

In general practice, businesses follow the steps below.

1. The seller sends a quote to the customer.

2. If accepted, the customer sends the seller a purchase order.

3. The seller creates a sales order based on the purchase order.

4. The customer may request a sales order to view the exact details of the
products, price, terms and delivery dates. Most businesses usually skip this
test.

42
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

5. After the seller ships the products, they create an invoice from the sales
order.

To create a sales order

GOT > VOCUHERS > UNDER THE DROPDOWN OF PURCHASE > SALES
ORDER (CTRL F8)

Enter the Party's A/c Name . under Sundry Debtors

1. Enter the Order No .

2. Select the Name of Item from the List of Stock Items , or press Alt+C to
create a new stock item.

3. Enter the Quantity of the item, as required.

4. Enter the Rate of the item. The Order Voucher Creation screen appears
as shown below:

43
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

PRACTICAL QUESTION

Item Quantity Rs
Monitor 50nos 8000/-
Television 15nos 12000/-
Furniture 5nos 1500/-
Key board 20nos 3500/-
Dust covers 5nos 250/-
Mother board 40nos 8000/-

AFTER DOING THIS ONE IN SALES ORDER DO THE SME IN SALES INVOICE ALSO.
(F8)

REJECTION IN VOUCHER

Tally records goods received back that is the goods rejected

by a customer (sales return). The co. takes stocks back from the customer
and that entries are entered in Rejection Note Voucher.(CTRL F6)

TO CREATE REJECTION IN VOUCHER

GOT > VOUCHERS > UNDER DROPDOWN OF THE RECEIPTS > REJECTION IN (CTRL
F6)

44
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Rejection-out-voucher:

Tally records of goods that are rejected by a supplier

(purchase return). The co. takes stocks back from the supplier and that entries
are entered in Rejection-out-voucher. (CTRL F5)

TO CREATE REJECTION IN VOUCHER

GOT > VOUCHERS > UNDER THE DROP DOWN OF PAYMENT > REJECTION OUT (CTRL
F5)

45
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M

Create Rejection in & Rejection out voucher.

1. Return any of goods for the reason of damaged or shortage of goods or

late in delivery from customer i.e. treated as sales return.

2. Return any of goods for the reason of damaged or shortage of goods or

late in delivery from supplier i.e. treated as purchase return.

Receipt Note voucher:

Tally records the receipt of goods in receipt note

voucher. When a co. receives a new stock from the supplier it must be recorded
in this voucher.

46
 SHOB TALLY PRIME NOTES (XL ONLINE TUTORING)
SHOBHA M
To create a Receipt Note voucher

GOT > VOUCHERS > UNDER THE DROPDOWN OF PURCHASES > RCEIPT NOTE (ALT
F9)

1. Enter the Party's A/c Name . under Sundry Creditors

2. Select the Name of Item from the List of Stock Items , or

press Alt+C to create a new stock item.

3. Enter the Quantity of the item, as required.

4. Enter the Rate of the item.

Create a Receipt note voucher with the help of items given below

Items Qty Rs
Wireless mouse 15nos 450/-
Wireless keyboard 5nos 1500/-
Floppy disk 20nos 2000/-
Mother board 40nos 300/-
Dust covers 5nos 2500/-
USB pen drives 32GB 10nos 50/-
Processor[p4] 10nos 300/-
Monitor 5nos 5000/-
CD drives 5nos 350/-

47