accounting software package - tally

1 | Accounting Software Package – Tally www.alrahiman.com

Learning Objectives:

After studying this chapter, you will be able to use Tally Accounting software for

• Creating Books of Accounts

• Print Profit and Loss Account

• Print Balance sheet

• Prepare Bank Reconciliation Statement

• Print MIS Reports on Accounting

Tally is a windows based accounting software. This is the most commonly used and powerful accounting

package. It is developed by Tally Sollutions Pvt Ltd.

Startup Tally

If Tally icon is displayed on the desktop, double click on it or click Start Button on the Task bar

Start � Program � Tally

Structure of Tally Screen

Tally screen has four components. The tally Start Up screen will be displayed as shown below

Chapter – 5

Accounting Software Package - Tally


1. Title Bar / Product Info : It displays Software Name, Version etc

2. Work Area : It is just below the title bar and the largest area. It is divided into two parts, On the

right hand side it displays Menus and accept the option we select. On the left hand side list of

selected companies, current period and current date are displayed.

3. Calculator/ODBC Server : It is used for arithemetical functions and ODBC Server functionality.

To activate calculator press Ctrl+N.

4. Buttons Tool Bar : It is the small vertical screen area shown on the right hand side. It shows

several buttons with function keys to provide quick and direct access to various options and

tasks.

Current Period

In the current period user enters starting date of the financial year and clowsing date of the financial

year. To change current period press Alt+F2

Current Date

It is the date of your last working . To change current date press F2

Active Company

When you have selected multiple companies the last selected company becomes the active company

Steps of Accounting in Tally

The various steps required for entering transactions and preparing final accounts

1. Start the Accounting Package

2. Create Company

3. Create the Accounting group, if needed

4. Create Ledger Accounts

5. Create additional vouchers, if needed

6. Enter the transactions using proper vouchers

7. Display the reports.

Create Company

To create a Company from Gateway of Tally go to Company Info menu and select Create Company

Gateway of Tally � Company Info � Create Company ( GT�Alt+F3�C)

The company creation screen contains different fields like Directory, Name, Mailing Name, Income Tax

No, Financial Year etc. We have to enter the relevant information in the respective fields. The fields such

as Name, Maintain, Financial Year from and Books Beginning from are compulsory fields to be filled. On


completing the information Tally seeks your confirmation to save company profile by asking Accept? Yes

or No. To save the information select Yes otherwise No.

Illustration

Create a company with the following detaisl

Name : Universal Industries Ltd

Addres : MG Road, Ernakulam

Email Address : [email protected]

Income Tax No : ITK233P

Maintail : Accounts with Inventory

Fianancial year From : 01/04/2015

Books beginning from : 01/04/2015

Use Security Control : No

Steps:--

1. Press Alt+F3 or Click on ‘F3-Company Info’ button on Button Panel

2. In Company info Menu select ‘Create Company’ or Press ‘C’

3. Enter the deatails in Company creation screen

4. Press ‘Y’ or ‘Enter’ to accept the company creation.


Alteration of a Company

To modify the details of a company choose Alter Option in Company info menu


2. In Company info Menu select ‘Alter’ or Press ‘A’

3. Select the company to make alterations

4. Edit the details in Company Alteration screen

5. Press ‘Y’ or ‘Enter’ to accept the company Alteration

Deletion of a Company


2. In Company info Menu select ‘Alter’ or Press ‘A’

3. Select the company to be deleted

4. In Company Alteration screen press Alt+D

5. Press ‘Y’ or ‘Enter’ twice to accept the company Deletion

Accounting Groups Grouping of Account is done for the purpose of classifying and identifying ledger accounts according to

their nature. Tally provides 28 pre-defined accounting groups.

Creating account groups In addition to the pre-defined groups, we can create as many groups as we needed. The following

sequence is followed to create additional groups.


Gate way of Tally � Accounts Info � Group � Create

Creating Ledger Accounts A ledger is the actual account head to which you identify a transaction. Tally provides two ledgers by

default viz. Cash A/c and Profit and Loss A/c. I addition to these we can create any number of ledger

accounts that you require. The following sequence is followed to create additional ledge

Gate way of Tally � Accounts Info � Ledgers � Create ( GT�A�L�C )

Display Ledger Accounts

To display the ledger accounts already created, use the following sequence

Gate way of Tally � Accounts Info � Ledgers � Display ( GT�A�L�D )

Alter Ledger Accounts

To alter the ledger accounts already created, use the following sequence

Gate way of Tally � Accounts Info � Ledgers � Alter ( GT�A�L�A )

Delete Ledger Accounts

To delete the ledger, use the following sequence

Gate way of Tally � Accounts Info � Ledgers � Alter � select the ledger � Press Alt+D

Illustation


We have already created a Company named Universal Industries Ltd. Below is given the transactions of

that company during the month of January 2015.

Rs.

01/01/2015 Started business with cash 5,00,000

01/01/2015 Opened a Bank A/c with SBT 25,000

01/01/2015 Purchased Machinery 25,000

01/01/2015 Purchased goods from Standard Traders 55,000

01/01/2015 Sold goods to Ameen Traders 70,000

01/01/2015 Returned goods to Standard Traders 5,000

01/01/2015 Returned goods by Ameen Traders 2,000

02/01/2015 Withdrew cash from Bank 5,000

02/01/2015 Sold goods for Cash 14,000

02/01/2015 Purchased goods for cash 50,000

02/01/2015 Withdrew cash by the proprietor for personal use 4000

02/01/2015 Purchased furniture from Furniture Land 6,000

31/01/2015 Paid cheque to Standard Traders 10,000

31/01/2015 Interest Received 1,000

31/01/2015 Paid wages 2,000

31/01/2015 Paid Salary 8,000

31/01/2015 Paid Rent 5,000

Based on the above example, we have to create the following ledger accounts under appropriate groups

as given below

Gate way of Tally � Accounts Info � Ledgers � Create

Sl.No Name of Ledger Group

1 Capital Capital Accounts

2 SBT Bank Accounts

3 Machinery Fixed Assets

4 Purchases Purchase Accounts

5 Standard Traders Sundry Creditors

6 Sales Sales Accounts

7 Ameen Traders Sundry Debtors

8 Purchase Returns Purchase Accounts

9 Sales Returs Sales Accounts

10 Drawings Capital Accounts

11 Furniture Fixed Assets

12 Furniture Land Sundry Creditors

13 Interest Indirect Income

14 Wages Direct Expense


15 Salary Indirect Expense

16 Rent Indirect Expense

Voucher Entry After creating ledger accounts you have to make voucher entries. In computerized Accounting the term

Voucher Entry is used instead of Journal entry. Tally is programmed with a variety of Accounting

Vouchers.

The default vouchers and their corresponding function keys to activate the vouvher entry screen are

given below.

Sl.No Voucher Name Purpose Function

Key

1 Contra Voucher To record transactions in which accounts placed under

the groups cash in hand and Bank Accounts are involved

F4

2 Payment Voucher To enter cash and bank payments F5

3 Receipt Voucher To record all cash and bank receipts F6

4 Journal Voucher This is an adjustment voucher used for non cash

transactions

F7

5 Sales Voucher To enter Sale of goods F8

6 Purchase Voucher To enter purchase of goods F9

7 Credit Note Voucher To record Sales Returns Ctrl+F8

8 Debit Note Voucher To record Purchase Returns Ctrl+F9

Illustration

We have already created necessary ledger accounts for the transaction of Universal Industries Ltd. Now

let us examine how to record these transactions using appropriate vouchers.

Steps for entering Vouchers

1) To start voucher entry select Accounting Vouchers in Gate way of Tally or Press ‘V’.

2) Change the current date by pressing F2

3) Select appropriate Vouchers by pressing the relevant Function Keys

4) Select the debit item and credit item and enter the amounts

5) Press ‘Y’ or ‘Enter’ on confirmation window.


By following the above steps enter all the transactions as given below:

Sl.No Date Accounts Involved Dr / Cr Voucher Function Key

1 01/01/2015 Cash

Capital

Debit

Credit Receipt F6

2 01/01/2015 Bank

Case

Debit

Credit Contra F4

3 01/01/2015 Machinery

Cash

Debit

Credit Payment F5

4 01/01/2015 Purchase Account

Standard Traders

Debit

Credit Purchase F9

5 01/01/2015 Ameer Traders

Sales Account

Debit

Credit Sales F8

6 01/01/2015 Standard Traders

Purchase Returns

Debit

Credi Debit Note Ctrl+F9

7 02/01/2015 Cash

Bank

Debit

Credit Contra F4

8 02/01/2015 Cash

Sales

Debit

Credit Sales F8

9 02/01/2015 Purchase Accounts

Cash

Debit

Credit Purchase F9

10 02/01/2015 Drawings

Cash

Debit

Credit Payment F5

11 02/01/2015 Furniture

Furniture Land

Debit

Credit Journal F7


12 31/01/2015 Standard Traders

Bank

Debit

Credit Payment F5

13 31/01/2015 Cash

Interest

Debit

Credit Receipt F6

14 31/01/2015 Wages

Cash

Debit

Credit Payment F5

15 31/01/2015 Salary

Cash

Debit

Credit Payment F5

16 31/01/2015 Rent

Cash

Debit

Credit Payment F5

Display Trial Balance :

Gateway of Tally � Display � Trial Balance

Display Profilt & Loss A/c

Gateway of Tally � Profit and Loss A/c

10 | Accounting Software Package – Tally

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Display Balance Sheet

Gateway of Tally � Balance Sheet


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Know your Progress

Prepare Final Accounts of M/s Royal Agencies, Kozhikode from the following information.

2014 March 1 Started business with Cash Rs.3,00,000

2014 March 1 Opened Bank Account with Canara Bank 20,000

2014 March 1 Purchased Land& Building 50,000

2014 March 1 Purchased goods from Kairali Traders 75,000

2014 March 1 Sold goods to Hakeem Traders 1,00,000

2014 March 2 Paid Carriage 3,000

2014 March 2 Commission Received 300

2014 March 31 Paid Salaries 10,000

2014 March 31 Paid Insurance 3,200

A Small Project with Bank Reconciliation Statements (BRS) We already learned about the preparation of BRS manually in first year classes. We were

incurred lot of problems related with addition and subtraction from cash book and passbook balance

while preparing BRS manually. We can use computerised accounting system- tally software- to

overcome these difficulties. We can easily prepare BRS by enter the bank date under the reconciliation

menu in tally and there is no need of addition and subtraction from cash book and passbook balances.

After displaying bank book and its monthly summary, we have to press F5 (Reconciliation

button) for entering bank date and getting BRS

Bank date is the date at which the transaction is effective in bank. It should be enter the

reconciliation menu

We can see the following in reconciliation menu

Balance as per Company Books

Amounts not reflected in Banks

balance as per Bank

We can easily understand the pricedure for preparing BRS through the following illistration.

Prepare Bank reconciliation statement of Bathery Ltd.as on 31-12-2014.

Opening balance of PNB Saving Bank Account (1-12-2014) Rs. 40000.

1-12-2014 purchased goods and paid by cheque (Ch No. 231) Rs. 10000

1-12-2014 deposited into PNB Saving Bank Account Rs. 16000

2-12-2014 paid rent by cheque( Ch No. 232) Rs. 10000


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2-12-2014 paid salaries by cheque (Ch No. 233) Rs.6000

31-12-2014 Interest credited in the pass book Rs. 600

31-12-2014 Bank charges debited in pass book Rs. 150

Cheque No. 231 and 232 were presented in the bank on 31-12-2014. But Cheque No.

233 is not presented to the bank.All other transactions were entered in the pass on the same

day itself.

Procedure fpr Preparation of Bank Reconciliation statement

Steps

1. Company creation

GT->Company info->create

Name of company: Bathery Ltd

2. Change period

Press <Alt+F2>

3. Ledger creation

GT->A/C info>Ledger->create

(ledger created without entering opening balance except bank)

Sl

No

Name of ledger Under group Opening balance Dr/ Cr

1 PNB Bank 40000 Dr

2 Purchases Purchases - -

3 Rent Indirect expense - -

4 Salary Indirect expense - -

5 Interest received Indirect Income - -

6 Bank charges Indirect expense - -

5. Voucher entry

GT->Accounting vouchers

Date Voucher type Functional Key Debit A/C Credit A/C Amount

01-12-14 Purchase F9 Purchases PNB 10000

01-12-14 Contra F4 PNB Cash 16000


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02-12-14 Payment F5 Rent PNB 10000

02-12-14 Payment F5 Salary PNB 6000

31-12-14 Receipt F6 PNB interest 600

31-12-14 Payment F5 Bank charges PNB 150

6.Display of cash book and Preparation of BRS

GT-> Display->Account books->Ledger-> cash book->Press enter to get monthly wise

report->press F5-> enter Bank date-> Press F5

Picture from tally screen

Enter bank date as follows

Date Debit A/C Credit A/C Bnk date

01/12/14 Purchases PNB 31/12/14

01/12/14 PNB Cash 01/12/14

02/12/14 Rent PNB 31/12/14

02/12/14 Salary PNB -

31/12/14 PNB interest 31/12/14

31/12/14 Bank charges PNB 31/12/14

Picture from tally screen

accounting software package - tally

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