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T a ll y

TABLE OF CONTENTS
Lesson: 1 Basic of Accounting ............................................................................................... 5
1.1 Transactions ..................................................................................................................................... 5
1.1.2 Recording transactions................................................................................................................. 5
1.1.2 Types of Accounts......................................................................................................................... 6
Double entry system: ............................................................................................................................. 7
1.2 Rules of Accounting ......................................................................................................................... 7
1.3 Mode of Accounting ......................................................................................................................... 7
1.3.2 Trial Balance .................................................................................................................................. 8
1.4 Financial Statement.......................................................................................................................... 8
1.4.1 Trading Accounts .......................................................................................................................... 8
1.4.2 Profit and Loss Accounts: ............................................................................................................ 8
1.4.3 Balance sheet................................................................................................................................. 8

Lesson: 2 Business Organizations......................................................................................... 9


2.1 Service Organizations ...................................................................................................................... 9
2.2 Trading Organizations...................................................................................................................... 9
2.3 Manufacturing Organizations ........................................................................................................ 10

Lesson: 3 Accounting on Computers....................................................................................11


3.1

Accounting System................................................................................................................... 11

3.2

Benefits of Accounting on computers .................................................................................... 11

Lesson: 4 Tally Fundamentals ...............................................................................................12


4.1 Features of Tally ............................................................................................................................. 12
4.2.1 Switching between screen Areas............................................................................................... 12
4.2.2 Quitting Tally................................................................................................................................ 13
4.3 Creations setting up of company in Tally .................................................................................... 13
4.3.1 Creations of a company .............................................................................................................. 13
4.4 F11 Company Features .................................................................................................................. 15
4.5. F12: Configure ............................................................................................................................... 16
4.5.2 Voucher Configurations.............................................................................................................. 17

Lesson: 5 Processing Transactions in Tally .........................................................................18


5.1 Ledgers and Groups....................................................................................................................... 18
5.2 Accounting Vouchers: ................................................................................................................... 18
5.2.1 Contra Voucher ............................................................................................................................ 18
5.2.2 Payment Voucher ........................................................................................................................ 18
5.2.3 Receipt Voucher .......................................................................................................................... 19
5.2.4 Sales Invoice ................................................................................................................................ 19

5.2.5 Purchase Invoice ......................................................................................................................... 19


5.3 Recording Transactions of Sample Data ..................................................................................... 19
5.3.1 Transactions for April 2009 ........................................................................................................ 19
5.3.2 Transactions for May 2009.......................................................................................................... 22
5.3.3 Transactions for June 2009 ........................................................................................................ 22
5.3.4 Transactions for JULY 2009 ....................................................................................................... 23
5.3.5 Transactions for August 2009 .................................................................................................... 23
5.3.6 Transactions for September 2009 .............................................................................................. 24

Lesson: 6 Introductions to Trading Organizations...............................................................24


6.1 Trading Organizations.................................................................................................................... 24
6.1.2 Differences between Trading and Services Organizations:.................................................... 24
6.1.3 Introductions to Inventory .......................................................................................................... 24
6.1.4 Kinds of Inventory ....................................................................................................................... 24

Lesson: 7 Purchases and Sales.............................................................................................25


7.1 Cash and Credit purchase ............................................................................................................. 25
7.1.1 Cash and Credit Sales................................................................................................................. 25
7.1.2 Price Levels .................................................................................................................................. 26
7.1.3 Debit note: .................................................................................................................................... 26
7.1.4 Credit note:................................................................................................................................... 26
7.1.5 Bills Receivable and Bills Payable............................................................................................. 26
7.2. Duties and taxes ............................................................................................................................ 27
7.2.1 Vat ................................................................................................................................................. 27
7.2.2 Vat Tax Classification................................................................................................................. 27
7.3 F11 Features.................................................................................................................................... 28
7.4 F12: Configure ................................................................................................................................ 29
7.5 Master configurations .................................................................................................................... 29
Transactions for April 2009 ................................................................................................................. 31
Transactions for April 2009 ................................................................................................................. 35
7.6 Bank Reconciliations ..................................................................................................................... 38
7.7 Cheque Printing .............................................................................................................................. 38

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Lesson: 8 Manufacturing Organization .................................................................................39


8.1 Manufacturing Organizations ........................................................................................................ 40
8.2.1 Accounting and commercial terms associated with manufacturing ..................................... 40
8.3 Cost Centres ................................................................................................................................... 41
8.3.1 Analysis using Cost Centres ...................................................................................................... 41
8.4 Fiscal Environment of a Manufacturing Organisation................................................................ 42
8.4.1 Direct Taxes ................................................................................................................................. 42
8.4.2 Indirect Taxes.............................................................................................................................. 43
1.

Central Excise Duty: ..................................................................................................................... 43

2.

Custom Duties:.............................................................................................................................. 43

3.

Sales Tax:....................................................................................................................................... 44

Lesson: 9 Purchase, Sales and Manufacturing ....................................................................44


9.1 Processes in Manufacturing.......................................................................................................... 44
9.2 Purchases........................................................................................................................................ 44
9.2.1 Types of purchases in Manufacturing Organization................................................................ 45
9.2.2Recording of Purchases .............................................................................................................. 45
9.3 Sales................................................................................................................................................. 45
9.3.1Types of Sales in Manufacturing Organization ......................................................................... 45
9.3.2 Recording of Sales ...................................................................................................................... 45
9.4 Manufacturing/ Stock Journal ....................................................................................................... 46
9.4 Reorder level ................................................................................................................................... 47
Transaction for November 2009 .......................................................................................................... 49
Transaction for December 2009 .......................................................................................................... 50
Transaction for January 2010.............................................................................................................. 52
Transaction for February 2010 ............................................................................................................ 55
Transaction for March 2010 ................................................................................................................. 58

Lesson: 10 Payroll ..................................................................................................................63


10.1 Payroll Introduction...................................................................................................................... 63
10.2 Payroll Info. ................................................................................................................................... 66
10.3 Voucher Types in Tally.ERP 9 Payroll ........................................................................................ 72
10.4 Statements of Payroll ................................................................................................................... 74

Lesson: 11 Excise in Tally......................................................................................................77


11.1 Introduction ................................................................................................................................... 77
11.2 Excise Transactions ..................................................................................................................... 78

Lesson: 12 Budgeting Systems, Scenario Management and Variances Analysis .............80


12.1 Budgets-Definition and Types: ................................................................................................... 80

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12.1.1 Advantages of a Budget............................................................................................................ 80


12.1.2 Types of Budgets....................................................................................................................... 80
12.1.3 Treatment of Budgets................................................................................................................ 81
12.1.4 Budgets in Tally ......................................................................................................................... 81
12.1.5 Variance Analysis:..................................................................................................................... 82
12.1.6 Scenario Forecasts.................................................................................................................... 82
12.1.7Scenario management in Tally .................................................................................................. 82
12.2 Security control ............................................................................................................................ 84
12.3 Created users and Passwords .................................................................................................... 85

Lesson: 13 Tally.ERP 9...........................................................................................................88


13.1 Advantage of Tally.ERP 9 ............................................................................................................ 88
13.2 Remote Access ............................................................................................................................. 88
13.3 Tally .NET....................................................................................................................................... 89
13.4 Introduction to TDL Server DLL Component ............................................................................. 90
13.5 Control Centre............................................................................................................................... 90
13.6 Support Centre.............................................................................................................................. 91

Lesson: 14 Ratio Analysis......................................................................................................91


Lesson: 15 Cash Flow and Fund Flow Statement.................................................................92
15.2 Objectives...................................................................................................................................... 92
15.2.1 Limitations.................................................................................................................................. 93
15.2.2 Preparation of Cash Flow Statement....................................................................................... 93
15.2.3 Fund Flow statement................................................................................................................. 93
15.3 Objectives...................................................................................................................................... 93
15.3.1 Limitations.................................................................................................................................. 93
15.3.2 Preparation of Fund Flow Statement....................................................................................... 94

Lesson: 16 System Administrator and Other Utilities ..........................................................95


16.1 Consolidation of Accounts .......................................................................................................... 95
16.2 Split Company Data...................................................................................................................... 95
16.3 Export and Import of Data............................................................................................................ 96
16.2 Import of Data ............................................................................................................................... 96
16.3 ODBC Compliance........................................................................................................................ 97
16.3.1 Using ODBC in Tally.................................................................................................................. 97

Lesson: 17 Display and Report ..............................................................................................99

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Lesson: 1 Basic of Accounting


Introduction
Accounts is a finance Support System that
Records Transactions.
Classifies Transactions on Events.
Expresses Transactions in Monetary terms.
Helps to Monitor the Financial Performance and Condition of the Business
Helps to evaluate the business
Helps to establish control for the Business
Accounts helps to arrive at the financial Position of an organization at any point of time the
organizations financial status as one Particular date is Captured in the balance sheet, while financial
Performance for the year is summarized in Profit & Loss Statement.

1.1 Transactions
A Transaction is an event that changed the organizations financial position and /or earnings.
For Example:
When you deposit cash in the bank your cash balance reduces and bank balance increases; when
you sell goods for cash balance increases and your stock reduces. Transactions can be classified as
follows:
Receiptscash or bank
Payment-cash or bank
Purchase
Sales

1.1.2 Recording transactions


The essential function of accounting is to record transactions to ascertain the financial of a company
as on a particular date.
The usual transactions of a business are:
Purchase of goods either as raw material for further good for resale.
Payment of exp. incurred towards business.
Sale of goods or services.
Receipts in cash or via cheque.
Other payment, in cash & cheque.

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Figure 1.1 parties dealt with in a business Process

1.1.2 Types of Accounts


The three type of accounting maintain for transactions with parties are
1) Real Accounting
2) Personal Accounting
3) Nominal Accounting

1) Real Accounts are maintained for assets owned or possessed by the business. Examples
Include:
Buildings
Furniture
Cash
2) Personal Accounts are the accounts of personal whom the business is required to deal
with.
Examples include
Suppliers
Customers
Lenders
3) Nominal Accounts are accounts where income & Exp are recorded.
Examples Include
Assets
Liabilities
Capital
Revenue
Expenses

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Double entry system:


Double entry accounting is a system of recording transactions in a manner that maintains the
equality of the accounting equation .this accounting technique recorded each transaction as a
debit & a credit, where every debit has a corresponding credit & vice versa.

Figure 1.2 Double Entry Systems

1.2 Rules of Accounting


Debit
Credit

Real A/c
What comes in
What Goes out

Personal A/c
The Receiver
The Giver

Nominal A/c
Exp and Losses
Income and Gains

1.3 Mode of Accounting


1.3.1 Journal and Ledgers
A Journal is a book which business transactions are entered in Chronological
onological Order .A record of
single business transactions is called a Journal entry. Every Journal entry supported by a voucher,
evidencing the related transactions..
A voucher is document containing the details of a financial transactions Example: Includes sales
invoice, Purchase invoice, payslip, Rent receipt and so on
on.
An account is a statement of transactions affecting any particular assets, Liability
Liability, expense or
income. A ledger is the in a/c which all the acco
accounts are maintained. A chart of Accounts is a list of all
accounts titles used by an organization. The chart of accounts of the business shows the
Categorizations and grouping of its accounts.
ac

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1.3.2 Trial Balance


A Trial Balance is a list of the Balance of all Ledgers of all Ledger accounts. It is prepared after all the
transactions are entered in a journal entries posted to the ledger and accounts balanced It is the sum
of balance of all real & nominal accounting of the Organization. A Detailed Trail Balance has columns:
Accounts name
Debit Balance
Credit Balance

1.4 Financial Statement


A Financial statement is a periodic report prepared from the accounting records of a company
financial statement including the profit & loss statement the Balance sheet and cash flow statement.
Financial statements are usually compiled on a quarterly basis or an annual basis.
For Reporting convenience, the Profit & loss Statement is divided into
Trading accounts
Profit & Loss A/c
The profit & Loss statement can be further classified into two levels:
Gross Profit: Gross Profit is arrived at, after considering the core activities of the company. It is
expressed as
Gross Profit=Net sales cost of sales
Net Profit: Net Profit is arrived at after considering the other administrative costs incurred for the
Period .It is expressed as
Net profit = (Gross Profit + other Income)-(Selling and Administrative Expenses+ Depreciation+
Interest +Taxes + Other Expenses)

1.4.1 Trading Accounts


The trading accounts is Prepared so as to arrive the gross profit earned by an organization over a
specified period. This helps the Organization to arrive at the cost its core activity and calculate the
direct profit from its Operation.

1.4.2 Profit and Loss Accounts:


The Profit & loss accounts give the net profit earned by a company after considering all other Incomes
and Expenses incurred over a period. This helps the company to monitor and control the costs
incurred and improve its efficiency. In other words the profit and loss statement shows the
performance of company in terms of profit or losses over a specified period.
All revenue and expense accounts are closed once the profit & loss account is prepared. They will not
have an opening balance for the next accounts cycle.

1.4.3 Balance sheet


The balance sheet is a Statement that summarizes the assets and Liabilities of a business. The
excess of Assets over Liabilities is the net worth of a business.
The Balance sheet provides information that helps in assessing
A companys Long terms financial strength.
A companys Efficient day to-day working capital management
A companys Assets Portfolio.A companys Sustainable Long term performance

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Lesson: 2 Business Organizations


Introduction
Business organization Perform a variety of transactions and can classified as:
1. Services Organizations
2. Trading Organizations
3. Manufacturing Organizations

2.1 Service Organizations


An Organizations providing services is called a services Organizations.
Services are defined as work done for other in lieu of a payment or prices.
prices Services
ervices do not have a
physical form or substance.

2.2 Trading Organizations


An Organization involved in the process of buying & selling is called a Trading-Organization
Trading Organization. Trading
is defined as exchange of goods for a fixed market price or a perceived value. Traders act as
channels that provide goods produced by the manufacturers at a convenient place,
place price pack
(quantity) and time to the consumers.
consumers

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Business process in a Trading Organization

2.3 Manufacturing Organizations


Manufacturing is a process of transforming raw materials (input) into finished goods (outputs) for
consumers or for further processing by other in the channel. The success of organization depends on
its ability to carry out this process profitable.
profitable As compared to services & trading organization, a
Manufacturing Organization must consider more factors to define its style of function.

Business process in a Manufacturing Organizations

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Lesson: 3 Accounting on Computers


Introduction
This chapter discusses the connective between Information systems and accounting systems in as
Organizations and explains the benefits and Challenges of accounting on computer.
3.1

Accounting System

Information teaching has change the way as business is conducted. An effective accounting
system must support the management in marking Strategic business decisions quickly. Thus as
the process of decision Making Changes the accounting system must also change and evolve to
meet both internal and external needs.
3.2

Benefits of Accounting on computers

As an Organization grows, maintaining accounts manually becomes a timeconsuming and costly


process. Several people must be employed to maintain accounts, possibly at different locations
there may not be consistency quality of accounting. The generations of consolidated reports are
long drawn out and expensive. Thus information that is vital for quick strategic decisions is usually
delayed or not available.
Accounting on computers resolves this issued as it results in a generation of timely report in
desired formats and resolves real time enquiry needs quickly and accurately to enable faster
decision making.
It facilitates knowledge, sharing between accounts across different locations of an Organizations
supports financial tools such budget and performance report which in turn facilitate control.

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Lesson: 4 Tally Fundamentals


4.1 Features of Tally
Basic Accounts

Basic Inventory

Complete book-keeping

Stock categories

Books, register and statement of accounts

Stock query by stock group, or stock category

General ledger

Multiple godowns

Accounts receivable and accounts payable

Stock transfer to godowns and branches

Flexible voucher numbering

Multiple Stock valuations method

Flexible classifications of accounts heads

Batch-wise / Lot-wise, including expiry date handing

Panoramic view

Alternate units of measure and tail units

Drill down display

Tracking thought receipt notes /Deliver notes/ rejections


out wards.

Databases repotting

Additional Costs incurred on purchase

Voucher and cheque printing

Movement Profitability analysis Party wise/Item wise


/stock Group-wise

Columnar Reporting

Customizable sales invoices using price lists with multiple


Prices

Bank reconciliation

Sales and Purchase Order Processing

Advance Accounts

Advance Inventory

Multiple Companies

Stock Items Classified as raw Materials, work-inprocess, finished goods

Multi Currency

Bill of material with autoadjustment of stocks

Multiple financial years

Job-work Concept, including subcontracting

Company of data using multi- columnar repotting

Additional Cost of manufacturing with narrations, value


and presenting

Memo Vouchers

Excise / VAT/Central sales tax(CST)/tax Collected at


Sources (TCS) related transactions and reports

Postdata voucher

Modvate supports

User-define voucher

Reorder levels

Sales and purchase extract

Stock ageing analysis

Cash flow statement

Batch related stock reports

Daily balance and transactions values/ Interest

Point of sales (pos)

4.2.1 Switching between screen Areas


When Tally first loads, the Gateway of tally screen display to toggle between this screens. The
Calculators/ODBC server area at the bottom of the screen press Ctrl +N or Ctrl +M as indicated on
the Screen. A green bar highlights the active area of the Screen.

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4.2.2 Quitting Tally


You can exit the Program any Tally Screen, but Tally Requires all Screen to be closed before it shuts
down. To quit working on Tally
Press Esc until you see the message Quit? Yes or No? Press Enter or Y, or Click yes to quit
Tally.
Alternatively to exit without Confirmations, press Ctrl+ Q from Gateway of Tally.
You can also exit, while the options Quit is selected from Gateway of Tally

4.3 Creations setting up of company in Tally


The first step towards understand Tally is to Create a company in Tally .Create a company using the
company creation screen.

4.3.1 Creations of a company


Go to Gateway of Tally > company info > Create company.
The company creations Screen display as shown-

Company Creations BIT (Baroda Institute of technology)


Field descriptions
Data to entered
Directory: Tally assumes that the company is to Accepts what display on data the Screen
be created in the data path given in the tally .INI
file, which is displayed by default. However ,you
can change this path on the Screen so Tally
saves the data to a different directory
Name :Enter the name the company
BIT (Baroda Institute of technology)
Mailing Name :Usually ,company name and
BIT (Baroda Institute of technology)
Mailing name are the same ,but tally allows a
different mailing name if needed
Address: Fill in the company address details
No
Note: Tally picks up the mailing Name and Address details in any report such as balance sheets
statement of accounts and so on which needs to have the company name and address
Statutory company for: Select the appropriate
Selected India from the list of countries displayed
country the list of countries
State: Selected the appropriate state from the
Selected Gujarat from the List of state displayed

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list of state
PIN code : Enter the PIN code specified
560019
address (This field is optional)
Telephone NO:
25547770
E-Mail Address: E-Mail Address is used to EBIT 25@Gmail.com
mail document reports and data from tally.
Currency Symbol: Tally displayed Rs by default Rs.(Per-defined)
this cannot be modified at the time of the creation
of the company
Maintain :This field is used to specify which
Accounts only
sections of tally your company would like to use
tally displayed two options Accounts only and
Accounts with inventory
Maintain
Options
Descriptions
Accounts Only
Only financial accounts of the company
Accounts with-Inventory
Both financial accounts and inventory records of
the company
Financial year from: this field is used to Specify
1-4-2009
the financial year (FY) for the company. Tally
consider 12 months from the months from date
which is given hear as the financial year for
st
example, if you give 1 April 2009 your FY will
be April 1.2009 to March 31,2010
Books beginning from: The date given for
1-4-2009
financial Year from automatically displayed this
can be charges to be the actual date on which
the books of accounts are opened
Tally Vault Password (If any )Tally vault is a
Skip field do not enter any details
Facility to keep the data protected using a
password Once the password is set data is
Maintained permanently in an encrypted form
this field is optional
Note: the Tally vault password Feature needs to be used with care .If the password is lost ,all data
Maintained in tally is irrecoverable
Press Enter or Y to accepts the screen and compete creation of the company, BIT (Baroda Institute of
technology)
Tally will take you the Gateway of tally Screen that display as shown

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4.4 F11 Company Features


The F11 buttons is used to modify the Various Feature of company. This buttons is available in most
applications of tally. The Company Features are specific to the current company only thus each
company may have different Features activated.
F11: company Features is divided into Accounts Features and Statutory Taxations

Press Enter or the Hotkey A to go the accounting Fractures screen.


The Accounting Features Screen displayed as shown:

By default, Maintain Bill- wise Details? Is activated set this Option to NO & ensure that your screen
display as shown.
From the computer Screen. Press Hotkey S to go the Statutory & Taxations Screen the Statutory &
taxations Screen display as shown.

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4.5. F12: Configure


F12: Configure is used to configure setting for various applications available in tally .Before starting
work on the company configure it by pressing the F12: Configure button.
Configurations setting affect all company maintain in the same data directory. Setting the
configurations for one company affects other companies in that data directory.

4.5.1 Master configurations


Master Configurations is used to set the details that should display in the accounts masters. This is
availed in the accounts and inventory master Screen thought the F12: configure buttons and can be
modify as per the requirement. Go to Gateway of tally > F12: Configure >Accts /Inv Info.
Set the Master Configurations as shown:

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4.5.2 Voucher Configurations


Voucher Configurations used to configure features during voucher entry
Go to Gateway of tally F12: configure >voucher entry

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Lesson: 5 Processing Transactions in Tally


5.1 Ledgers and Groups
All Financial Entries are made using ledger accounts heads. Even transactions /voucher can be
related to a ledger accounts head to which it belongs. Ledgers which have transactions of the same
natures are classified under one group.
A group is collections of ledger which have similar transactions. For Example all ledger accounts
heads relating to the fixed assets of company are grouped under Fixed Assets primary group in tally.
Using classifications you can generate reports which are meaningful and compliant with statutory
requirements.
Tally offers flexibility in relation to building a chart of accounts. Ledger accounts can be grouped
together to create multiple ledger accounts. A single ledger accounts can be created. Reports and
statements reflect the classification which has been made while creating the chart of accounts.
At the highest level, accounts are classified into capital and revenue accounts, and then specifically,
into assets, liabilities, income and expenditure. Based on mercantile accounting principles, tally
provides a set of 28 pre-defined groups under which ledgers can be classified.
Primary group-15
Sub groups-13
Out of the 15 pre-defined groups,
Nine primary groups, which are capital in nature, display in balance sheet.
Six primary groups, which are revenue in nature, display in the profit and loss account.
All the 13 sub-groups are classified under the nine primary groups that are capital in nature and they
appear in the balance sheet. Tally has pre-defined ledger for cash (under cash-in-hand group) and
profit and loss account (under primary group).

5.2 Accounting Vouchers:


Tally is pre-programmed with a variety of accounting vouchers, each designed to perform a specific
function. The standard vouchers are
Contra voucher
Payment voucher
Receipt voucher
Journal voucher
Sales voucher
Purchase voucher

5.2.1 Contra Voucher


As per accounting rules, contra entry is a transaction which indicates the transfer of funds from
Cash account to bank account.
Bank account to cash account.
One bank account to another bank account.
Go to Gateway of tally > accounting vouchers > F4: contra to display the contra voucher.

5.2.2 Payment Voucher


Payment transactions are accounted using Tallys payment voucher.
Go to Gateway of tally > accounting vouchers > F5: payment to display the payment voucher.

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5.2.3 Receipt Voucher


Transactions involving receipt of money are entered in the receipt voucher.
Go to Gateway of tally > accounting vouchers > F6: receipt to display the receipt voucher.

5.2.4 Sales Invoice


When goods/services are sold, a voucher, which the customer (debtor) can use as proof of purchase,
needs to be created. This document is called as invoice according to business requirements.
Go to Gateway of tally > accounting vouchers > F8: sales to display the sales invoice.

5.2.5 Purchase Invoice


Purchase invoice is a bill issued by the supplier for the purchases made by the customer. Tally has
the facility to generate purchase invoices.
Go to Gateway of tally > accounting vouchers > F9: purchases to display the purchase invoice.

5.3 Recording Transactions of Sample Data


The following example shows you how to record transaction in tally.
Ms. Pooja Patel, an MBA from Bangalore, worked in software and financial service organization for
15 years. She then started her own enterprise called BIT on April 1, 2005, to provide management of
consultancy services.
Ms. Patel wants to maintain her accounts using Tally 9. She maintains the books of account under the
accrual system of accounting.
The transactions are recorded for BIT is as follows.

5.3.1 Transactions for April 2009


S.L NO.
1)

Date
1-4-2009

2)

2-4-2009

3)

5-4-2009

4)

10-4-2009

5)

15-4-2009

Transactions
Patel Pooja Stared BIT by bringing in cash of Rs 3, 00,000.
Pooja Patel capital A/c
Dr=3,00,000
Cash
Cr=3,00,000
(F6 receipt)
Ms. Patel paid Rs 22,500 in cash to Purchase a computer with Preloaded
Tally Erp9. The computer does not have any disposal value at the end of its
useful life of four year. All assets are to be depreciated using Straight Line
method.
Computer
Dr=22,500
Cash
Cr=22,500
(F5 payment)
Ms. Patel opened a bank accounts with HDFC bank Gujarat for the firm by
depositing cash 1,00,000.
Cash
Cr=1,00,000
HDFC
Dr=1,00,000
(F4 contra)
Ms. Patel rented an office space for Rs 2500 per month on April 01, 2009.
She paid the security deposing of Rs 25,000 by cheque.
Security depositing (deposit
Dr=25000
Assets)
HDFC
Cr=25000
(F5 payment)
Ms. Patel issued cheque and purchase the following fixed assets
A cell phone for office use for Rs. 6000
Furniture for Rs. 20,000

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6)

17-4-2009

7)

20/4/2009

25/4/2009

27/4/2009

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28/4/2009

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29/4/2009

An air conditioner for Rs. 20,000


Electrical fitting for Rs. 15,000
(F5 payment)
Ms. Patel obtained a mobile phone Subscription from Planet
telecommunications Ltd. by paying a deposit of Rs. 3,000 in cash.
Security depositphone(deposit
Dr=3000
Assets)
Cash
Cr=3000
Ms. Patel Purchased stationery Consumables worth Rs. 12,500 from
Global House on credit.
Stationary exp(In.exp)
Dr=12500
Global house (S.creditors)
Cr=12500
(F7 Journal )
Ms. Patel Signed a contract with silver services to provide consultancy
services at an agreed prices of Rs. 75,000 she received an advance of
Rs. 25000 by cheque.
Advance consulting Revenue
Cr=25000
HDFC
Dr=25000
Advance from customer (groups creation)
(F6 Receipt)
Ms. Patel received invoices for Rs. 6000 from INK and paper publisher for
printing offices stationery.
Stationary exp
Dr=6000
INK and paper publisher(sun.cr)
Cr=6000
(F7 Journal)
Ms. Patel withdrew Rs. 7500 cash for personal use.
Withdrawals (Capital A/c)
Dr=7500
Cash
Cr=7500
(F5 payment)
Ms. Patel paid Rs. 750 in cash toward offices maintenances charges for
April 2009.
Offices Maintenances exp(in Exp)
Dr=750
Cash
Cr=750
(F5 payment)

Opening Balances (01/4/2009) leave the field blank

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Accounting Voucher creations Receipt voucher

Accounting Voucher creations Payment voucher

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Accounting Voucher creations contra voucher


Example:

5.3.2 Transactions for May 2009


S.L NO

Date

Transactions

1)

2-5-2009

Ms. Patel paid Rs. 6000 in cash in Ink and Paper Publisher.

2)

3-5-2009

Ms. Patel paid Rs. 2500 by cheque towards Offices rent for April 2009.

3)

5-5-2009

4)

10-5-2009

5)

12-5-2009

Ms. Patel Paid Salaries thought Cheque For April 2009 to


Maya NairRs. 6500
Vijay PatelRS. 3900
Ms. Patel received and paid her mobile phone bill amounting to Rs. 1250 in
cash for April 2009.
Ms. Patel issued a cheque of Rs. 12,500 Global house.

6)

19-5-2009

Ms. Patel paid Rs. 1100 in cash towards electricity Charges for April 2009.

7)

20-5-2009

8)
9)
10)

22-5-2009
23-5-2009
25-5-2009

11)

27-5-2009

12)

28-5-2009

Ms. Patel Received a Further Advance of Rs. 25000 from silver services by
cheque.
Ms. Patel Reimbursed conveyances bills amounting to Rs. 650 to Vijay Patel.
Ms. Patel Paid Rs. 150 in cash towards miscellaneous offices expenses.
Ms. Patel Received Rs. 15000 as consulting miscellaneous revenue in cash
from omega InfoTech.
Ms. Patel raised an invoice for Rs. 75000 on silver Services after completions
of the Services. Silver services paid the Balances amounts of Rs. 2500 in cash
after deducting the advance.
Ms. Patel withdraws Rs.6, 000 cash for personal use.

5.3.3 Transactions for June 2009


SL.NO

Date

Transactions

1)

3-6-2009

Ms. Patel paid Rs. 2,500 in cash towards office rent for May 2009.

2)

4-6-2009

Ms. Patel paid salaries by cheque for May 2009.

3)

5-6-2009

4)

9-6-2009

Ms. Patel received an invoice for Rs. 5,500 form Raj travels. This includes Rs.
2,300 towards cab hiring charges and Rs. 3,200 towards outstation tours.
Ms. Patel received Rs. 35,000 in cash as consulting revenue from Eateries Food
Chain.

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

5)

10-6-2009

Ms. Patel received Rs. 30,000 in HDFC Bank.

6)

15-6-2009

Ms. Patel paid mobile phone bill amounting to Rs. 1,350 by cheque for May
2009.

7)

16-6-2009

Ms. Patel reimbursed conveyance bills amounting to Rs. 750 in cash to Vijay
Patel.

8)

20-6-2009

Ms. Patel paid Rs. 1,250 in cash towards electricity bill charges for May 2009.

9)

21-6-2009

10)

23-6-2009

Ms. Patel paid Rs. 750 in cash towards office maintenance charges for May
2009.
Ms. Patel paid Rs. 3,000 in cash as salary advance to Maya Nair.

11)

27-6-2009

Ms. Patel withdraws Rs. 6,000 cash for personal use.

5.3.4 Transactions for JULY 2009


1)

3-7-2009

Ms. Patel raised an invoice for Rs. 65,000 on Alfatech Solutions for services
provided.

2)

6-7-2009

Ms. Patel subscribed for the Management Consultant Journal paying Rs.
2,400 by cheque. The subscription period is from July 2009 to Jane 2011.

3)

7-7-2009

Ms. Patel paid salaries for Jane 2009 by cheque. Salary advance paid to Maya
Nair is against the salary paid.

4)
5)
6)

10-7-2009
15-7-2009
18-7-2009

Ms. Patel paid office rent by cheque for June 2009.


Ms. Patel received Rs. 35,000 by cheque from Alfatech Solutions.
Ms. Patel paid Rs. 750 in cash towards office maintenance charges for June
2009.

7)

19-7-2009

Ms. Patel paid Rs. 850 in cash towards electricity charges for June 2009.

8)
9)
10)

20-7-2009
25-7-2009
28-7-2009

Ms. Patel paid Rs.1, 650 by cheque as mobile phone bill charges for June 2009.
Ms. Patel reimbursed conveyance bills of Rs. 550 in cash to Vijay Patel.
Ms. Patel withdraws Rs. 6,500 cash for personal use.

5.3.5 Transactions for August 2009


1)

1-8-2009

Ms. Patel paid by cheque Rs. 6,000 for insurance of fixed assets. The period
of insurance is from August 1, 2009 to July 31, 2008.

2)

2-8-2009

3)
4)
5)
6)
7)

5-8-2009
10-8-2009
12-8-2009
14-8-2009
15-8-2009

8)
9)

16-8-2009
18-8-2009

10)

22-8-2009

11)
12)
13)

23-8-2009
25-8-2009
29-8-2009

Ms. Patel received Rs. 30,000 in cash as consulting revenue from Worlds
Multimedia.
Ms. Patel paid salaries for July 2009 by cheque.
Ms. Patel paid office rent for July 2009 by cheque.
Ms. Patel withdraws Rs. 25000 from HDFC Bank.
Ms. Patel Paid Rs. 750 in cash towered offices charges for July 23, 2009.
Ms. Patel raised invoices for Rs. 50,000 on Media Live Productions for
services provide. The terms of credit are 30 days.
Ms. Patel paid Rs. 950 in cash toward electricity Charges for July 2009.
Ms. Patel Paid Rs. 2100 by cheque toward Mobile phone bill charges for July
2009.
Media live Productions settled the bill for final amounts of Rs. 48,000 by
Paying Rs. 20,000 in cash and Rs. 28,000 by cheque.
Ms. Patel withdraws Rs. 7000 cash for Personal use.
Ms. Patel received Rs. 30,000 by cheque from Alfatech Solutions.
Ms. Patel reimbursed conveyance bills amounting to Rs. 1200 in cash in Vijay
Patel.

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

5.3.6 Transactions for September 2009


1)

1-8-2009

2)

2-8-2009

3)
4)

5-8-2009
10-8-2009

5)

12-8-2009

6)

14-8-2009

7)
8)

15-8-2009
16-8-2009

9)
10)

18-8-2009
22-8-2009

11)

23-8-2009

Ms. Patel paid Rs. 3800 in cash for repairs and Maintenances of offices
Premises.
Ms. Patel paid salaries for August 2005 by cheque. As Maya Nair was on lever
for 15 days. She was paid Half-months Salary.
Ms. Patel Paid offices rent for August 2005 by Cheque.
Ms. Patel received invoices for Rs. 7600 from Raj Travels. This includes Rs.
3150 towards cab hiring charges and Rs. 4450 towards outstations tours.
Ms. Patel paid Rs. 750 in cash toward offices Maintenances charges for
August 2009.
Ms. Patel revised Rs. 25000 in cash as consulting revenue from cam and cut
productions.
Ms. Patel paid Rs. 1300 in cash toward electricity charges for August 2009.
Ms. Patel reimbursed conveyance bills amounting to Rs. 500 in cash to Vijay
Patel.
Ms. Patel paid Rs. 10,000 by cheque to Raj Travels.
Ms. Patel Rs. 1750 by cheque towards mobile phone bill charges for August
2009.
Ms. Patel withdraws Rs. 5500 cash personal use.

Lesson: 6 Introductions to Trading Organizations


6.1 Trading Organizations
Trading is an exchange of Goods for a Fixed Market prices or a perceived value. Traders act as
channels which provide goods products by the manufactures at a convenient place, prices quantity
and time to the consumers. Thus an Organization involved in the process of buying and selling is
called a trading Organizations.
Traders can be broadly classified:
Wholesalers: Wholesalers Purchased merchandise in bulk from manufactures and sell to retails.
Retailers: Retailers Purchased merchandise from wholesalers and sell to consumers.

6.1.2 Differences between Trading and Services Organizations:


Trading Organizations
Sells Goods
Maintains Inventory
Cost for trading Organizations is the cost of
Goods sold
Goods are Tangible

Services Organizations
Sells services
Does not have inventory
Cost for services Organizations is the cost of
providing services
Services are not tangible

6.1.3 Introductions to Inventory


Inventory consists of raw materials and other item available for sales or the process of being made
ready for In other words word inventory is the money invested by an Organization in raw materials
work-in process and finished goods for expected future sale. The funds invested in inventory cannot
be used for other purposes until cash is received on sale of goods. Inventory is current asset as it is
converted into cash sale.

6.1.4 Kinds of Inventory


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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Raw Materials are the items purchased to be used in the productions process. They are
Modified or transformed into the final product.
For example:
Rubber is the raw material for tyres.
WIP is an acronym for work-in-process. It is the value of party finished goods.
Finished goods inventory is the portions of goods in inventory which are manufactured and
available for sale.
Supplies are the item consumed in the normal functions of a firm. They are not a part of the final
product.

Lesson: 7 Purchases and Sales


7.1 Cash and Credit purchase
When payment is made on a purchase instantly either cash of cheque, it is known as cash purchase.
Example: National stores bought glass cups by paying Rs. 1000 at the time of purchase from Goblets
and sparkles. The accounting entry passed is as follows:
Purchases Accounts
Cash /Bank Accounts

Dr
Cr

1000
1000

When both parties involved in the transactions agree upon later date as the date of payment for the
goods purchased, it is known as credit purchase. If the goods are purchased in smaller units vendor
details are not record in the books however if the buyer orders on a regular basis, the transactions
are usually routed a vendor through accounts. This helps buyers to:
Record payment to be affected in future
Negotiate trade and cash discounts.
Bargain for greater credits periods
Example: National stores bought glass cups worth Rs. 1000 from KP Glassware Company and paid
after 90 days of purchase the entry the time of purchase is as follows:
Purchase Accounts
Dr
1000
KP Glassware company
Cr
1000
accounts
At the time of making payment, the entry passed is as follows:
KP Glassware company
Dr
1000
accounts
Cash/bank Accounts
Cr
1000
Note that KP Glassware company accounts are netted off and the second entry matches with the
earlier cash purchase entry.

7.1.1 Cash and Credit Sales


When payment is received for goods sold instantly, either by cash or cheque, it is Know as cash sales
Example: Mr. Dalwadi Traders sold glass cups to Abode Bazaar on immediate payment Rs. 1200 the
entry passed is as follows:
Cash/bank Accounts
Dr
1200
Sales A/c
Cr
1200
When both parties involved in the transactions agree upon a letter date as the date of payment for the
goods sold it is known as credit sales.
Example: KP Glassware Company sold glass cups worth Rs. 1200 to variety stores on credit of 60
days, the entry passed at time of sale is as follows:
variety stores A/c
Dr
1200
Sales A/c
Cr
1200
At the time of collecting the amounts the entry passed is as follows
Cash/bank Accounts
Dr
1200

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

variety stores A/c

Cr

1200

7.1.2 Price Levels


Products are sold in different marks for different prices and to different customers segments based on
the demand for and supply of the products and competition from other dealing in similar products. The
diversity followed in assigning different values for the same products setting up of prices levels.
The prices level feature in tally allows the setting up of different prices lists for the same Item. You can
prepare invoices with ease for different customers for the same products with different prices lists
based on customers or market segmentations.

7.1.3 Debit note:


Is a note which an accounts for an accounts owed by a person or company.
A debit note is prepared showing the date of return, name of the supplier to whom the goods have
been returned details of the goods returned and retuning the goods. It informs the supplier that his/her
accounts have been debited with the value of goods returned. If discounts were allowed by the
supplier, this should be taken into considerations the value of the goods returned.
The scope of a debit note in not limited to purchase return. It can also be issued when
The buyer does not agree with the sales invoices of the supplier after booking the purchases.
The supplier intimates the buyer that is due for delayed payments.
The supplier accounts for and intimates the buyer that expenditure incurred on his/her behalf is
recoverable.

7.1.4 Credit note:


Is a note which acknowledges and accounts for an amounts for an amounts owned by a
person or a company. It is a simple and efficient system the supplier of all the receipts due.
Credit note are usually used when
The supplier acknowledger the goods returned by the buyer.
The buyer acknowledgers to the supplier that interest is due for delayed payment.

7.1.5 Bills Receivable and Bills Payable


A bill of exchanges is treated as both bills receivable and bills payable when the drawee accepts the
bill and sends it back to the drawer, it becomes bill receivable to drawer as money is receivable on the
bill. Therefore, it becomes an asset to the drawer. On the other hand, it becomes a bills payable to the
drawee as money is payable on the bill and is, therefore, a liability to him/her.
The drawer can make use of the bill in any of the following ways:
Retain the bill till the date of maturity and collect the money from the drawee.
Endorse the bill to the creditor.
Discounts the bill with the banker.
Send the bill to the banker for collection.
Example: KP Glassware Company sold to variety stores glass cups worth Rs. 2000 and drew upon
them a bill of two months, for the amounts on 1-6-2010 variety stores accepts the bill and returned it
to KP Glassware Company, which retained the bill, and on its maturity, presented it to the drawee.
The bill was honored.
Accounts Entries in the Books of drawer
When goods are sold on credit
variety stores a/c
DR 2000
To Sales A/c
Cr
2000
When the bill is drawn and Accepts
Bills Receivable a/c
variety stores a/c
When the bill is honored
Bills Receivable a/c

DR
Cr

2000
2000

DR

2000

Accounts Entries in the Books of drawer


When goods are purchased on credit
Purchase A/c
DR 2000
KP Glassware company A/c
Cr 2000
When the bill is accepted
KP Glassware company A/c
DR 2000
To bills payable a/c
Cr
2000
When the bill is honored
KP Glassware company A/c

DR

2000

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

variety stores a/c

Cr

2000

To bills payable a/c

Cr

2000

7.2. Duties and taxes


7.2.1 Vat
Value Added tax (VAT) is an indirect tax on goods, Introduced in lieu of sales tax, to ensure
transparency and compliance with statutory norms. The basic premise of Vat is to tax the True Value
added to the goods, at each stage of the transaction chain. This ultimately reduces:
Tax paid to the government.
Cost/Tax passed onto the consumer
VAT is a multi-Point tax as against sales tax, which is a singlepoint tax, under the sale tax regime,
the value of to be taxed at each stage is computed as basic Cost + Profit margin + sales tax paid at
the earlier stage. Vat does away cascading effect of tax on tax, by allowing a set off for input tax i.e.,
tax paid at the earlier stages on purchased therefore, it is an efficient globally acceptable & easy to
administer taxation system.
The advantages of implementing VAT are as follows:
Enhancement of the competitiveness by removal the cascading effect of taxes.
Simplifying the process of the taxations.
Selfregulatory mechanism ensuring greater compliances.
Terms associated with vat
Term
Input tax

Description
Tax paid on Purchases

Output

Tax charges on sales

7.2.2 Vat Tax Classification

NAME OF LEDGER

GROUP / CLASS

VAT / TAX CLASS

Purchase @ 1%

Purchase Account

Purchase @ 1%

Purchase @ 4%

Purchase Account

Purchase @ 4%

Purchase @ 12.5%

Purchase Account

Purchase @ 12.5%

Purchase - Exempt

Purchase Account

Purchase - Exempt

Input vat @ 1%

Duties & taxes

Input vat @ 1%

Input vat @ 4%

Duties & taxes

Input vat @ 4%

Input vat @ 12.5%

Duties & taxes

Input vat @ 12.5%

Sales @ 1%

Sales accounts

Sales @ 1%

27
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Sales @ 12.5%

Sales accounts

Sales @ 12.5%

Sales exempt

Sales accounts

Sales exempt

Output vat @ 1%

Duties & taxes

Output vat @ 1%

Output vat @ 4%

Duties & taxes

Output vat @ 4%

Output vat @ 12.5%

Duties & taxes

Output vat @ 12.5%

7.3 F11 Features


The F11 buttons is used to modify the Various Feature of company. This buttons is available most
applications of tally. The Company Features are specific to the current company only thus each
company may have different Features activated.

Integrate Accounts and inventory?: If accounts are not integrated with inventory voucher will not
have any impact on the balances sheet, stock figures, stock balances will be maintained separately
however, If the company and inventory are integrated by setting this field to yes, Inventory entries
system is activated

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Allow Multi- Currency? Tally is multicurrency enabled. If required, Transactions can be


recorded in foreign currency, invoices can be raised in US Dollars (or any other currency), bank
accounting or if Allow Multicurrency is set Yes
In the base currency symbol field, different currency symbols can be provided.
In the formal name field, the corresponding formal name for the base currency can be set.
The number of decimal places for the base the currency can be altered.
Allow invoicing? Invoices are generally used for sale of stock where the details of the item sold are
listed. Without invoicing, the options for price lists will not be available.
Enter Purchases in invoice format? If this field is set to Yes, Purchase vouchers can be created
invoices mode. The suppliers invoices can be entered in the same way as they physically appear in
Invoices mode; Purchases can be allocated to cost centers only when cost center classes are used.
Using the mode the voucher mode of entry for purchases allows manual allocations of purchases to
cost centers.
Maintain bill wise details? The field has to be set to yes for it to be available for ledger accounts.
Each ledger accounts can then individually be set for feature as required.
To view of alter the inventory features
Go to Gateway of tally >F11: features> inventory features
The inventory features screen display as shown

7.4 F12: Configure


F12: Configure is used to configure setting for various applications available in tally. Before starting
work on the company configure it by pressing the F12: Configure button.
Configurations setting affect all company maintain in the same data directory. Setting the
configurations for one company, affect other companies in that data directory.

7.5 Master configurations


Master Configurations is used to set the details that should display in the accounts masters. This is
availed in the accounts and inventory master Screen thought the F12: configure buttons and can be
modify as per the requirement Go to Gateway Of tally >F12: Configure>Accts/Inv info

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Skip Date Field in Created mode (faster entry!)? If this is set to yes, Tally goes depending on the
voucher type. If this is set to no, Tally goes to the date field. If there are many entries to be made on
the same date, it is advantageous to set these options to yes, for faster entry.
Show Inventory details? If this is set to yes, Tally show the Name of the stock quantity, rate and
value details.
Show table of Bill details for selections? If this field is set to yes. Tally display a table listing the
pending bills references.
Show Bill-wise Details? If this Field is set to Yes, bill-wise details are available. Bill-wise Details are
pertinent only for party accounts, I.E., ledger accounts classified under sundry debtors, Sundry
Creditors and Branch/Divisions, Bill-Wise details sub-screen does not come up for inventory voucher.
It is relevant only for accounts purposes.
Bill-wise details need to be set to yes if the user has to track each invoices to its conclusions and to
adjust the bills and payment, bill by bill. Information about outstanding analysis, ageing analysis.
Pending, Due and overdue bill and so on can be obtained from this feature.
Expand into multiple lines? This is the field display when Show Bill-wise details are activated. If this
field is set to yes .Tally display all bill-wise information for example, There due date based on the
credit days given
Show Ledger Current Balances? If this field is set to yes, Tally display the current balances of the
ledger selected while the user makes an entry. This avoids the need to the report to get the balances
information
Show Balances as on voucher Date? This is the additional options display the when show Balances
is set to yes. If this is set to yes then any voucher viewed in alterations mode will display the balances
on the voucher screen based on the voucher date and not the balances based on the last entry.
Allow cash Accounts in Journals? If this Field is set to Yes. Tally allows entry of transactions which
affect cash and bank accounts in journal voucher.
Use Cr/Dr Instead of to/By during entry? if this field is set to yes, tally uses Dr/Cr instead of the
default To/by .each voucher line display a prompt of Dr or by for debit entries or Cr or to for credits.

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Depending on the on the voucher type, Tally select either Dr/Cr for the first prompt, which the
user the user cannot changes. Thereafter, the prompt can be charges by typing over with a D or C.
Warn On if Negative Cash Balances? This field is set to yes, Tally warns you in case the cash
ledger reaches a negative balances. Tally displayed the credit the cash balances in Red. The user
can accordingly decide whether to do with the entry.
Gateway of tally >f12: configure >Invoices /Orders Entry set Accepts Supplementary details?
To NO.

Transactions for April 2009


SL.NO
1

Date
1-4-2009

Transactions
Karan Kundra started Kirti Agencies by bringing in capital of Rs.15,00,000 by cheque and
deposited the same in ICICI bank by opening a new accounts.
Voucher type:
A voucher is the primary online document for recording transactions. Transactions
recording and analysis are greatly facilitated by having specific formats for different types of
transactions .Tally provides 16 pertaining to both accounting and inventory. Some of this
voucher can also be used differently accounting to the situations, for example, sales
voucher can be used as invoices. Such use can be decided at the time of voucher entry
by selecting the appropriate button.
i) create ledger Karan Kundra A/c(Under capital Accounts)ICICI bank (under bank
accounts)
ii) Create voucher type bank Receipt.
Go to Gateway of Tally >Accounts info >voucher type >create to view the voucher type
creations screen
1.Name:Bank Receipt
2.Type of voucher :select Receipt from the list of voucher type
3.Abbr:Rcpt
4. Method of voucher Numbering? Select Automatic from types of numbering list.
5.Use Advances configurations :yes
6.Prefix details Particulars :Type BR/
7.suffix details - Particulars :Type /09-10

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Voucher type Creations: Bank Receipt

Go to Gateway of tally >Accounting Vouchers>F6: receipt >select Bank receipt from voucher type list to view
bank entry screen.
1.Credit particulars :Karan Kundra capital A/c =15,00,000
2. Debit particulars: ICICI bank =15,00,000
3.Narrations:Ch.No 187962 being cheque deposited in ICICI bank

32
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

2009

Mr. Kundra withdrew Rs. 50,000 by cheque for shop expenditure from ICICI bank (Cheque
number-123451)

Make an entry of the transactions in contra voucher


GO to Gateway of tally > Accounting voucher >F4 contra to view contra voucher entry screen
1.Credit particulars : ICICI bank =50,000
2. Debit particulars: cash=50,000
3
5-4-2009 Mr. Kundra purchased furniture Rs. 150000 for the shop by cheque (Cheque number123452)

33
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

8-4-2009

Mr. Kundra rented a premise On 1-4-2009 for his business at Rs. 3500 per month .He
paid a Security deposit of Rs. 25,000 by cheque (Cheque number 123453)

Bank payment voucher


Create ledger Security Deposit(Deposits Assets)
Dr- Security Deposit-25,000
Cr-ICICI bank-25,000
5
12-4-2009
Mr. Kundra issued a cheque to purchase the following Assets(Cheque number
123454)
Assets
Cost
Cell phone
5500
Computer
25000
Electrical Fitting
50000
Motor Vehicle(2 wheeler )
40,000
Bank payment voucher
6
20-4-2009
Mr. Kundra Purchased the following from Traders on credit
Item
Quantity Rate value
Input
Total
vat
High
100
600
60,000
12.5% 67,500
capacity
stabilizers
i)Create group Local creditors (Under Sundry Creditor )
Go to Gateway of tally >Account info >Group> create
Name: Local Creditors
Under: Sundry Creditor
Group behaves like sub-ledger: Yes
ii) Create ledger A2Z traders(under local Creditors )
Name: A2Z Traders
Under: Local Creditors

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Stock Item:
Stock item is the primary inventory entity stock items are used while recoding and receipts and issued of inventory.
This is the lowest of information of inventory each item that is required to be accounts is created for each item and
Tally calls this accounts Stock Item.
Stock Group:
Stock Item can be grouped together under stock group to reflect their classifications based on same commonality.
Grouping enable easy locations and reporting stock item in statements. Hence, Items of a particular brand or type
can be grouped together so that one can extract stock of all Item of that brand or type for further analysis, Subgroups of stock group can be created.
Unit of Measure:
Unit of measure is the basic unit of measurement used to measure stock item for every stock item, units of
measure need to be created. These can be units (for example numbers, Meters, Kilogram, Pieces) or compound
units. A compound units is created, ensures that the two simple units are created.
7

21-4-2009

Mr. Kundra purchased the following item from A2Z Traders on Credit.
Item
Quantity Rate Value
Input vat Total Vat
Low capacity 100
400
40,000
12.5%
45000
stabilizers
Open well
50
1500 75000
4%
78,000
pumps
Submersible
100
2000 2,00,000 4%
208000
pumps
Gross
331000
Total

As per Accounting Convention


Purchases @12.5%
Purchases @ 4 %
Input vat @12.5%
Input vat @ 4 %
To A2Z Traders

Dr
Dr
Dr
Dr
Cr

40,000
2,75,000
5000
11,000
3,31,000

22-4-2009

Mr. Kundra paid Carriage inward expense of the Rs. 500 in cash to meet the day to day
expenses.

28-4-2009

Mr. Kundra withdrew Rs. 5000 in cash for personal use.


Payment voucher
Cerate ledger Karan Kundra drawing(Capital account)
Dr-Karan Kundra drawing-5000
Cr-cash-5000

10
30-4-2009
VAT adjustment Entry.
The journal entry for the above transactions is as follows:
Cerate ledger vat Adjustment A/c(under Duties and t axes )
Go to Gateway of tally >Accounts info>Ledger>create
Name :Vat Adjustment A/c
Under: Duties and taxes
Type of Duty /Tax: select vat from Type of duty/Tax list
Make an entry of the transactions in journal Voucher
Vat Adjustment A/c
Dr
23,500
To Input vat@12.5%
Cr
12,500
To Input vat@4%
Cr
11,000

Transactions for April 2009


SL. No
1)

Date
1-5-2009

Transactions
Mr. Kundra paid salaries thought cheque for April 2010 (cheque number123455) the

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

details are as follows


Name
Salary paid
Number of days
Roshani shah
Rs 4000
18
Vaishali sane
Rs 4200
18
Minal Patel
Rs 4500
18
Kirti Pradhan
Rs 500
18
Note: cost centre has to be created in each employees name. Ensure that Maintain Cost centers is set yes in
F11:Features >Accounting Features

Cost Centre:
Cost centre are the cost objects for which expenses are incurred under various accounts head and the coat
control can be effectively established by keeping track of cost at one place.
Similar to cost centre, You can have revenue centre to keep track of revenues and profit centre to keep track of
profit
In Tally, Cost centre represent all of the above. Tallys concept of cost adds an additional dimensions to a
transactions. While a ledger accounts indicates the of a transactions, It does not readily disclose which part of an
organizations is involved. By creating cost centers a transitions can be allocated to it which would then enable
extractions of all transactions for a cost centre.
1) Created cost centers Roshani Shah ,Vaishali Sane, Minal Patel ,Kirti Pradhan (all under primary)
Go to Gateway of Tally >Accounts info>Cost Centers >Multiple Cost Centers>Create
Under cost Center :All Items
Enter details as shown in the following table
Create ledger salary Expanes

2) Create ledger expanses (under Indirect exp) Note: set the field cost centre are applicable? To yes at the time
salary expanse ledger crated
Make an entry of the transactions in Bank payment voucher
Go to Gateway of tally >Accounting info >F5:payment>Select Bank payment
Dr salary exp=17700

Cr=ICICI bank =17700


2

2-5-2009

Mr. Kundra Paid Rs 2500 in cash for Stationery and Printing Invoices and voucher to

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

cannon Traders.
i)Created Ledger printing and stationery exp (Under In.Exp)
Note: set the field cost Centers are applications? To No at the time of printing and stationary expanse ledger
creations.
ii) Make an entry of the transactions in payment voucher
Dr- printing and stationery exp
3
3-5-2009
Mr. Kundra Received the statement of Expenditure from the pretty cashier for April
2009.The Statement is as follows:
Nature of Expenses
Amounts
Stationery Purchased
2500
Cell phone bill
600
Shop maintenances expense
450
Conveyances expenses of marketing executives
250
As per tally Conveyances Exp., Telephone Exp and Shop maintenances expense(all under In.exp)
Allow Cash Accounts is Journal ?is Set to Yes in F12 :Configurations
Cost Centers are Applicable? To No
4
6-5-2009
Mr. Kundra Paid Rs. 3500 by cheque towards Shop rent for April 2009 (Cheque
number :123456)
Created Ledger Rent Exp(Under in.exp)
Bank payment
Dr-Rent Exp-3500
Cr-ICICI bank-3500
5
10-5-2009
Mr. Kundra Sold the Following Item for cash, Details as are Follows
Item
Quantity Rate Value
Input vat Total Vat
High capacity 50
850
42,500
12.5%
47813
stabilizers
Open well
15
1700 25,500
4%
26,520
pumps
6
15-5-2009
Mr. Kundra issued a cheque to A2Z Traders for Rs. 396500 after deducting of Rs.
2000 he received discounts as he agreed to pay the entries bill amount (Cheque
123457)
7
28-5-2006
Mr. Kundra withdrew Rs. 4000 in cash for personal use
Payment voucher
Dr-Karan Kundra 4000
Cr=cash 4000
8
30-5-2009
Mr. Kundra Received the statement of expenditures from the petty casher for May
2009 .The Statement
Natures of Expenses
Amounts
Cell phone bill
1500
Shop maintenances expense
200
Conveyances expenses of marketing
800
executives
Make an entry of the transactions in journal voucher
Dr-telephone exp-1500
Dr-Conveyances exp -800
Dr-Shop maintenances exp-200
Cr-petty cash-2500
9
31-5-2009
Vat Adjustment Entry
Make an entry of the transactions in journal voucher
Dr-output vat @12.5 %
Dr-Output vat@4%
Cr-vat Adjustment A/c

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

7.6 Bank Reconciliations


Bank Reconciliations is routine procedure of systematically adjusting the accounts balances reports
by a bank with the accounts balances on the company books and explaining any differences.
Differences can occur if deposits are not yet cleared or Cheques are not yet presented. Bank
statement for the period 1-4-2009 to 4-8-2009 sent Kirti Agencies from ICICI bank is as follows:
Date
2-4-2009
3-4-2009
8-4-2009
10-4-2009
13-4-2009
2-5-2009
6-5-2009
19-5-2009
4-6-2009
7-6-2009
20-6-2009
4-7-2009
17-7-2009
1-8-2009
3-8-2009
4-8-2009

Particulars
Cheque No:187962 Deposited (Karan
Kundra capital)
Cheque No:123451(Cash Withdrawn)
Cheque No:123452(Furniture and
deposit)
Cheque No:123453(As security
Deposit)
Cheque No:123454(For Assets
purchased )
Cheque No:123455(salary paid)
Cheque No:123456(Rent paid)
Cheque No:123457(Issued to A2Z
Traders )
Cheque No:123458(Cash with drawn
for petty cash )
Cheque No:123459(Salary paid)
Cash(Cash deposited)
Cheque no1234560
Cheque No:1234561(Purchases
made)
Cheque No:1234562(Issued to pacific
Merchants )
Cheque deposited(Java Trading
company)
Cheque deposited (Data tech
Services )

Deposits
1500000

Withdrawals

Balances
15,00,000

50,000
150000

1,450000
1300000

25000

12,75,000

75500

1199500

6900
3500
396500

1192600
1189100
792600

11,000

781,600

11500
11000
45563

770100
810100
799100
753537

647395

106142

40,000

52,312

1,58,454

61,875

2,20,329

7.7 Cheque Printing


A cheque is a written order to any bank and to display. To pay a stated sum of money Conventionally,
Cheque are hand written. Tally allows the printing of cheque and also accepts user-defined cheque
dimensions cheque printing can be done from a payment voucher prior to cheque printing in F11:
Features-accounting Features ensure that the following features are set to yes.
Enable Cheque printing. Set/Alter cheque printing configurations. Enter the following details in the
company cheque details screen.

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Company Name on Cheque: Kirti Agencies, Name of Banks: ICICI: Bank

To print a cheque, Go to Gateway of tally >Display >Day book


Click Alt+F2: Periods to changes period from 1-5-2009 to 31-5-2009
Select a payment voucher for example, select bank payment voucher dated 15-5-2009
On enabling cheque printing options, two filed are include in the payment voucher.
Name on cheque: Type A2Z traders
Cross cheque using: by default, it shown A/c payee. However, this can be change.

Lesson: 8 Manufacturing Organization


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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

8.1 Manufacturing Organizations


The process of transforming raw materials input into finished goods for consumers or for further
processing by others in the channel is called manufacturing. The success for a manufacturing
organization depends on its ability to carry out this process, effectively and profitably. A manufacturer,
before making decisions on the production process, usually needs to know the following:
Is the product to be customized or standardized?
If customization takes place,
o Will it be manufactured by re-assembling the sub-component? OR
o Will change BE implemented at the process level to arrive at customer acceptance?
What will be the order volumes?
What will be the time required by the production team from receipt of order to production,
considering the resources which are available?
What will be the requirement life cycle (time line form placement of order to receipt of goods)
as agreed upon by both the customer and manufacture, considering the demand and
competition for competition for the product in the market?

Accounting in Manufacturing Organization

MATERIALS
PURCHASED

COST OF GOODS
MANUFACTURED

COST OF
MATERIALS
USED

MATERIALS
INVENTORY

COST OF GOOD
SOLD

FINISHED GOODS
INVENTORY
WORK-IN-PROCESS
INVENTORY

Some of the key features of accounting in manufacturing organizations are


Accounting for inventories such as raw materials, work in progress and finished goods to arrive at
the profit made for the period.
Impact of changes in the inventory valuation method on the profits made during the period.
Accounting in manufacturing organization, requires greater planning, preparation and scheduling
as compared to trading and service organizations.
Calculating cost of sales is relatively complex in manufacturing organization as compared to
trading organizations.
Research and development costs in manufacturing organization are much higher as compared to
trading organizations.

8.2.1 Accounting and commercial terms associated with manufacturing


Each stage in manufacturing can be represented and recorded using an accounting or commercial
term.
Purchases

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Purchases for a manufacturing signifies bying goods, primarily with the intention of frther
processing, to sell them to customers. This includes the cost of all raw materials or parts purchased
for manufacture into finished products. Cost of purchases includes the purchase price as well as
duties and taxes. Fright inwards and other expenses directly attributable to the purchase.
Manufacturing
Manufacturing involves the transformation, development or modification of raw materials or semi
finished goods from one form to the other.The input is commonly reffered to as raw material and the
final output as finished goods. The output of any stage prior to the final output is termed as semifinished goods.
Once the finished goods are produced, the cost of goods available for sale can be determind. It
represents the sum of the opening stock of finished goods and finished goods manufactured in a
period. The goods purchased can also be in the process of production for such sale.
Cost of goods available for sale=Opening stock of finished goods + Finished goods manufactured
during the period

Cost of production refers to the cost of goods brought to completion whether they were started
before or during the current acconting period. It refers to the sum of direct and indirect manufacturing
costs which were incurrent or efore or during the current accounting period for goods produced in a
period.
Sales
A transactoin which involves the trensfer of goods or services for money is called sales. It is
reported in financial statement, net of trade discount.The Cost of goods sold represents direct costs
incuured by businesses in the process of selling goods. It is required to determine the gross profit of
an organisation.

8.3 Cost Centres


A cost centre is a locatoin, person or item of equipment (or group of these), in relation to which costs
may be ascertained and used for purposes of cost control.
Any raw material, labour,or other input used by an organisation for the manufacturing process is cost
which is allocatable as direct or indirect costs to cost centres.
Direct cost-A cost which is allocated to a cost centre is a direct cost of that particular cost
centre.
Indirect cost- A cost which is apportioned to different cost centres on a suitable basis is an
indirect cost of that particular cost centre.
For example, a company has three production departments A, B and C. Each department has
been identified as a cost centre.The wages paid to the respective workers of the department
concerned is the direct cost of that particular cost centre(department). However, if the rent of the
building in which the production departments are located is apportioned to the departments on a
scientific basis, then it is termed as an indirect cost of the cost center.

8.3.1 Analysis using Cost Centres


Cost centre performance can be measured using volume or relative percentage. For example, direct
variable cost can be monitored as a percentage of sales or even as a percentage of cost of
production if there are effective process controls. Indirect expences can be monitored by creating a
reasonable limit on the amount to be spent.
The following elements have to be kept in mind measuring cost performance.

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Overall objective of the business.


Changes in the business environment.
Ground realities.
There are needs to be a recognition that planning, however scientific, may not always be achieved.
Examples of encouraging greater cost control are:
The cost of direct expenses can be expressed as a percentage of sales leading to an efficient
production system.
Incentives to sales persons can be directly linked to the volume of sales achieved.
A limit can be set for administrative costs such as telephone expences.
Power cost and other additional expences can be linked with proper planning or prior execution of
an order.
Cost of non-core employee activities can be fixed as a percentage for evalution.
Effective sales promotion can be linked to actual sales.

8.4 Fiscal Environment of a Manufacturing Organisation


8.4.1 Direct Taxes
Direct Taxes are taxes collected by the government, directly from tax payers, through levies such as
income tax, wealth tax interest tax. In the case of direct taxes, the incidence and burden of paying the
tax fails on the same person.

1. Income Tax
Income Tax, as the name suggests, is a tax on the income of an individual. The persons liable to pay
this tax are determined based on the provisions of the Income Tax Act. In india, the Income Tax Act
classifies the income of individuals into 5 different sources.
Income from Salaries.
Income from business and profession.
Income from house property.
Capital gains.
Other income.
According to the taxation laws in india, every company has to pay a tax on income earned. Financial
statements prepared by an organisation, in accordance with the Income Tax Act, may differ from the
statutory forms adopted by the organisation. In India, the statutory reporting form for a company is
defined by the Companies Act,1956.

2. TDS
Tds or Tax Deducted at Source is one of the moe of collecting Income Tax. The buyer/payer
(deductor) deducts the tax from payment made to the seller/payee (deductee). The Deductor then
deposits the same at any designated branch of banks authorised to collect taxes on behalf of the
Income Tax Department.
Buyers (corporate and non-corporate) make payments under various heads such as salary, rent,
interest on securities, dividends, insurance on commission etc. to seller of these services. The tax on
such transactions is deducted at the same time of payment or credit to the account of the payee,
whichever is earlier and remitted to the government within the limits prescribed by the Law. The
seller/payee collects Form 16/16 A/ 16 AA, which is the certifiate for deduction of tax, from the

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buyer/payer and files this certificate with his return of Income to claim credit for tax deducted
at the source of Income.
The Income Tax website (www.incometaxindia.gov.in) provides information about filling returns. To
enable automation of collection, compilation and processing of TDS returns, the Income Tax
department has notified the Electronic Filling of Returns of Tax Deducted at Source Scheme, 2003.
This scheme is applicable to all deductors furnishing their TDS return in electronics form.
As per this scheme
It is mandatory for corporate deductors to furnish their TDS returns in electronic form (ETDS
return).
Form furnishing TDS return in electronic form is also mandatory for government deductors in
addition to corporate deductors.
Deductors (other than government and corporates) may file TDS return in electronic or
physical form.
Deductors can submit ETDS returns through TIN-facilitation Centres (TIN-FC) established by national
Securities Depository Ltd. (NSDL) or directly upload it through NSDL web site. For more information
on filling of ETDS return through TIN facilitation centres refer to their website (www.nsdl.co.in).
TDS reports : TDS reports in Tally enable the generation and printing of Form 16A and Form 27A.
Tally also enables the export of ETDS forms, that is Forms 26, 26Q, 27 and 27Q in NSDL compliant
format.

8.4.2 Indirect Taxes


Indirect taxes are imposed on commodities , is directly borne by the people,. It includes Excise Duty,
Sales Tax, Custom Duty and Value Added Tax. In the case of indirect taxes the person on whom the
incidence to pay the tax falls in different from the person who carries the burden of paying the tax.

1. Central Excise Duty:


Central excise duty is charged on goods manufactured in India under section 3(1) of the Central
Excise Act, 1944. The levy and collection are govered by this ACT.
The rates of duty are prescribed under the Schedule I (CENVAT duty) and Schedule II (special Excise
duty) of the Central Excise Tariff Act, 1985.
The taxable event under the Central Excise law is manufacturer. The liability of Central Excise duty
arises when the goods are manufactured. However the payment is required to be made at the time of
removal of goods from the factory. The tax administration and goods clearance are effected based on
the manufacturers invoice.
Cenvat Credit Rules, 2004, has introduced input credit for excise duty and service tax on input
materials and services for final products.
Tally supports the following:
Excise invoice
Input credits

2. Custom Duties:
Customs is a duty imposed on imported goods. Under section 12 of the Customs Act, the goods
are taxable when they are brought into India, that is, they fall under the expression Imported
Goods. Before the clearance of any imported goods, an importer has to comply with prescribed
customs clearance formalities.
Essentially, these involves the presentation of certain documents along with a prescribed
application, normally termed as
Bill of entry, seeking clearance of goods for home
consumption/warehousing and so on. The Bill of entry gives essential particulars in relation to
Imported goods. Its country of origin, particulars of vessels/aircraft and so on. The dutiable event
will only be at the time when the goods reach the customs barriers and the Bill of entry is filed.
Tally supports the following:
Capturing of invoice particulars for imports

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Multicurrency operation.
3. Sales Tax:
Sales Tax is a levy on purchase and sale of goods. It is levied under suthority of both central
legislation (Central Sales Tax ) and state governments Legislations (Local Sales Tax). Central
Sales Tax is governed by the Central Sales Tax Act, 1956 which covers inter-state transactions of
sale of goods as well as transactions of import of goods or export of goods. It provides For the
levy, collection and distribution of taxes on sales of goods in the course of inter-state trade or
commerce.
A dealer shall be liable to pay under this Acr on asale of any goods effected by him in the course
of inter-state trade or commerce, not with standing that no tax would have been leviable (whether
on the seller or purchaser) under the Sales Tax of the appropriate state if that sale had taken
place inside that state.
The Local Sales Tax is governes by the respective State Sales Tax Acts under which tax is levied
on intra-state transactions of sales.
Tally has features of which
Support Tax calculations.
Generate Sales Tax forms.
Service Tax
Service Tax is an indirect tax levied by the Government of India on certain categories of services
provided by a person, firm, and agency and so on. The Government of India has marked a set of
services as taxable under the service tax structure. The responsibility of paying the Service Tax rests
with the service provider, that is, the seller.
Currently, the rate of Service Tax on taxable services is 12% and an additional education cases @
2% is changed on Service Tax. Service Tax is currently applicable on 73 categories of services.
Service Tax returns are to be filed with the commisionerate of Service Tax for the fiscal half-year.
A few of the listed services have an abatement facility. For services with this facility, the government
allows a deduction on the value to be considered for Service Tax. For example, a caterer has to
procure raw materials to prepare food products and sell services. Here, the assessable value of the
service will not include amount paid for the materials procured. This deduction allowed by the
Government is called abatement. Abatement is either a percentage of the service charges or a lump
sum amount.
Tally supports service tax requirements such as
Basic masters configuration.
Service Tax transactions.
Service Tax forms and reports.

Lesson: 9 Purchase, Sales and Manufacturing


9.1 Processes in Manufacturing
Manufacturing may consists of the following processes:
Assembling where components are assembled into a finished product.
Processing where several products are produced from a common batch of a raw material.
Job work where material are issued to external agencies for carrying out conversion work and
returned as finished or semi finished goods.

9.2 Purchases
The five basic quantities required for a good purchase are:
Purchase of the right quality
Purchase at the right time

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Purchase of the right quantity


Purchase at the right price
Purchase from the right source
An effective purchase system will have a purchase budget as its starting point. Inputs are taken from
a consumption budget which indicates the quantity, quality and specification of each item of raw
material required for production. Other input includes the opening stock of each material, the quantity
already ordered and the expected closing stock needed at the end of the year. Other factors taken
into consideration are:
Availability of raw material
Sources of supply
Availability of cash
Delivery dated for finishing goods

9.2.1 Types of purchases in Manufacturing Organization


A purchase for which payment is made instantly by cash or cheque is a Cash Purchase. When goods
are purchased or sold for cash, the name of the supplier or customer is immaterial. Therefore it can
be ignored at the time of recording transaction.
When both parties are involved in the transaction agree upon a later date as the date of payment for
the goods purchased, it is called Credit Purchase.

9.2.2Recording of Purchases
Purchase Order: A Purchase Order is a written authorization sent to a vendor to supply goods or
services at a specified price over a specified time period. Acceptance of the Purchase Order
constitutes a purchase contract and legally binds all parties.
Purchase Account: Purchase Account is an account where all transactions relating to inventory
are recorded. Only purchase of goods for resale is recorded in a purchase account. It is an error
of principle to record purchase of assets or stationery in purchase account.
Purchase Returns: Purchase Return Book or return outwards account records the details of
goods returned to suppliers. Goods are often returned if they are not according to the terms and
conditions agreed upon between the business enterprises and the supplier. Rejection Out
voucher is used to record goods which are rejected and returned to a supplier.

9.3 Sales
The transaction which involves transfer of goods or services for money is called sales. The purpose of
goods purchased or manufactured by the business is for sales and to earn profit. It is reported in
financial statements net of trade discount.
Sales refer to the sales of goods which form a part of the stock in trade of the business unit. The sale
of old fixed assets are not sales. In terms of accounting it would be an error of principle to record
sales of fixed assets in the sales account.

9.3.1Types of Sales in Manufacturing Organization


When a Payment is received on goods sold instantly, either by cash or cheque, it is known as a Cash
Sales. However, when both parties involved in the transaction agree upon a later date as the date of
payment for the goods sold, it is known as Credit Sales.

9.3.2 Recording of Sales


Sales are reported in financial statements, net of trade discount; value added tax and other sale
based taxes.
Sales Order: Sales order is also known as sales contract. It is contract by which buyer and seller
agree to the terms and conditions of a sale.

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Sales Account: Sales account is an account where all transactions relating to inventory
are recorded. Only the sale of goods is recorded in a sales account. It is an error of principle to
record the sale of assets in the sales account.
Rejection-In Voucher: Rejection In voucher records goods received after being rejected by a
customer. Items rejected by a customer are taken back into stock by the company. The return of
goods by the customer (sales return) is recorded in the Return Inward Account or Sales Return
Account.
Tracking numbers are used to maintain relation between debit/credit notes and invoiced/bills.
They are available for both purchases as well as sales. They also create a link between inventory
records and accounting records.

9.4 Manufacturing/ Stock Journal


Manufacturing involves transformation, development or modification of raw materials or semi finished
goods from one form to the other. The input is commonly referred to as raw materials and the final
output as finished goods. The output of any stage of production prior to final output is termed as semi
finished goods.
A Stock Journal records:
Consumption of raw material
Transfer of stock from one location or department to another or to an external agency.
Manufacture of finished goods.

Bills of materials
Bill of Materials or (BOM) is a listing of all the assemblies, sub assemblies, parts and raw
materials, which are needed to produce one unit of a finished product. Each finished product has
its own bill of materials. For example, a BOM for one computer may consists of
One motherboard
One sound card
One monitor
One mouse
One keyboard
One tower
One set of speakers and so on.
For example, if you have an order to produce 100 personal computers, the BOM makes it easy to
calculate and plan
Quantity of parts or raw materials required to complete the order.
Quantity of stock at the start of production.
Responsibilities of each department related to the production process.
Uses of BOM
Purchase department- material requisitions are prepared by the production or maintenance
department based on BOM and sent to the purchase department for procurement of
materials.
Store department- The BOM helps the store keeper track materials in the store. He receives
a material requisition from the production department and issues material accordingly.
Production department- The BOM serves to create a work order for the production
department.
Costing department- On the basis of the BOM, the cost of consumption of raw materials with
respect to each order can be calculated even before work is completed.

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9.4 Reorder level


Reorder level is the minimum level of a stock item that would necessitate the reordering of that item.
Reorder levels are fixed based on the production plan, to ensure that there is sufficient stock to
service customer orders without allowing for overstocking.
Reorder level are decided by
Average time taken between a purchase order and receipt of materials from suppliers (lead
time).
Delivery time specified by the customer.
The stock in hand to satisfy orders in the meantime.
Computation of reorder level
Information on the following is necessary to computer reorder levels.
Maximum usage of materials
Maximum lead time
Maximum stock level
Minimum stock level
Reorder level = Maximum usage Maximum lead time
Maximum stock level is the maximum quantity of stocks allowed.
Minimum stock level is that quantity below which stocks are not normally allowed to fall.
Reorder level in Tally
In Gateway of tally > Inventory info > Reorder level > select raw material

Example of Manufa cturing O rganization


Create a company SYSCON COMPUTERS LTD.
Set the features:

In F11- F3 :statutory & taxation


Set Enable Value Added Tax to yes. Enter the Vat details.

Transaction for October 2009


1.

01-10-2009

The directors of the company brought in Rs. 25, 00,000 in the form of equity
share capital. The company has a bank account with HDFC Bank.
Create ledgers equity share capital under capital account and HDFC Bank under bank accounts.
Make an entry of the transaction in Receipt voucher.
Cr. equity share capital
Dr. HDFC Bank
2.

04-10-2009

Preliminary expenses of Rs. 100000 incurred by the promoters were reimbursed

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Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

to them by issuing cheque.


Create ledgers Preliminary expenses under Misc. expenses-Asset.
Make an entry of the transaction in Payment voucher.
Dr. Preliminary expenses
Cr. HDFC Bank
3.

06-10-2009

The company rented a godown and paid a security deposit of Rs. 75000 by
cheque.
Create ledgers security deposit-rent under deposit-Asset.
Make an entry of the transaction in Payment voucher.
Dr. security deposit-rent
Cr. HDFC Bank
4.

08-10-2009

The company applied for two telephone connections. A security deposit of Rs.
6000 was paid for the same by cheque.
Create ledgers security deposit-telephone under deposit-Asset.
Make an entry of the transaction in Payment voucher.
Dr. security deposit- telephone
Cr. HDFC Bank
5.

10-10-2009

To start operations company purchased the following items by issuing


cheque.

Static electric resistant gloves Rs. 40000 (depreciation 60%)


Voltage parameter testing meter Rs. 30000(depreciation 50%)
Electric fittings Rs. 20000 (depreciation 10%)
Computer administration Rs. 40000 (depreciation 60%)
Assembling tables Rs. 50000 (depreciation 10%)
Furniture and fixtures Rs. 50000 (depreciation 15%)
The company follows the written down method to depreciate the assets.
Create all ledgers under fixed assets.
Make an entry of the transaction in Payment voucher.
6.

13-10-2009

The company withdrew Rs. 50000 from the bank for office use, of which Rs.
3000 was advanced to petty cashier.
Create ledgers petty cash under cash-in-hand.
Make an entry of the transaction in contra voucher.
Cr. HDFC Bank Rs. 50000
Dr. cash Rs. 20000
Dr. petty cash Rs. 30000
7.

17-10-2009

The company purchased raw material on 15 days credit from Ultratech computer,
stored them in the raw material godown and paid carriage inward expense of Rs.
400.
Item
quantity rate
vat
Processor Athlon

50

3700

Hard disk

100

2300

Monitor

110

3500

Processor p4

50

5700

4%

Create a separate subgroup for expense on purchase under purchase a/c.


Create ledgers:

48
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Ultratech computer under sundry creditors.


Purchase @ 4% vat under purchase a/c.
Input vat @ 4% under duties & taxes.
Carriage inward under expense on purchase.
Create godown raw material godown.
Create stock group raw material.
Create stock categories p4 and Athlon.
Create stock item mentioned in table.
Make an entry of the transaction in purchase voucher.
8.

18-10-2009

The company purchased raw material on 30 days credit from Islion systems,
stored them in the raw material godown and paid carriage inward expense of Rs.
350.
item
quantity rate
vat
Keyboard

110

200

Mouse

100

150

motherboard

100

3200

4%

Make an entry of the transaction in purchase voucher.


9.

28-10-2009

The following items were transferred from raw material godown to assembling
godown.
item
quantity
Processor p4
25
Monitor
50
Hard disk
50
Keyboard
50
Mouse
50
motherboard
50
Processor Athlon
25
Use stock journal Alt+F7.
When there is an internal transfer from raw material godown to assembling godown, the value
of the stock item should be uniform in both the godown.

10.

31-10-2009

Pass a vat adjustment entry.

Create a ledger vat adjustment account under duties & taxes.


Make an entry of the transaction in journal voucher.
Tax amount can be view by vat computation report.
Dr. Vat adjustment account
Cr. Input vat @ 4%

Transaction for November 2009


11. 01-11-2009 The petty cashier submitted the statement of expenses for October 2009
Salary to staff Rs. 9000 (for 15 days).
Electricity expenses Rs. 400
Conveyance expenses Rs. 800.
Rent expenses Rs. 15000.
Printing and stationery expenses Rs. 2400.
Create ledgers Electricity expenses, Conveyance expenses, Rent expenses, printing and stationery
expenses under indirect expenses.
Create ledger salary expense under indirect expenses.
Set F11 - Maintain cost center to yes and more than one cost category to yes.

49
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Employee name
Rohan Rai
Preeti Raj
Paresh Shenoy
Dilip Chari
Shrinath
Nitin Nagraj
Make an entry of transaction in Journal voucher.

Monthly salary
3500
3000
3000
3500
1000
4000

Set F12: set allow cash account in Journal.


Dr. Expenses
Cr. Petty cash
12. 04-11-2009

Issued a bearer cheque for Rs. 40000 to petty cash.

Make an entry in Contra voucher.


13.

10-11-2009

To assembled one computer P4, the following peripherals are required.


Name of the peripheral
Quantity
Processor P4
1 nos
Monitor
1 nos
Motherboard
1 nos
Hard disk
1 nos
Mouse
1 nos
keyboard
1 nos
The company assembled 20 computers with P4 configuration using the
peripherals listed in the above table and stored the same in the finished goods
godown. Wages of Rs. 30000 and overheads of Rs. 2000 were incurred.
The wages were paid by cheque.
Create ledgers wages and overheads under direct expenses.
Create stock item computer P4 (allow component list details -bill of material to yes).
Set maintain in batch to yes.
Create a manufacturing journal voucher.
Make an entry in Manufacturing Journal Voucher and another in payment voucher.

14.

24-11-2009

The company sold Computer P4 to Interfex Corporation on credit of 15 days.


item
quantity
Rate
Vat
Computer P4
10 nos
24,500
4%
Make an entry in sales Voucher.
15.

28-11-2009

16.

The company paid to Ultratech Computers Rs. 528800 part payment.

30-11-2009 Pass a vat adjustment entry.


Make an entry of the transaction in journal voucher.
Cr. Vat adjustment account
Dr. Output vat @ 4%

Transaction for December 2009


17. 01-12-2009 The petty cashier submitted the statement of expenses for October 2009
Telephone expenses Rs. 1800.
Salary to staff Rs. 18000.
Electricity expenses Rs. 600.
Conveyance expenses Rs. 950.
Rent expenses Rs. 15000.
Advertisement expenses Rs. 2400.

50
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

18.

04-12-2009

19.

5-12-2009

20.

08-12-2009

21.

22.

Issued a bearer cheque for Rs. 42000 to petty cash.


To assemble one Computer Athlon, the following peripherals are required.
Name of the peripheral
Quantity
Processor Athlon
No 1
Monitor
No 1
Motherboard
No 1
Hard disk
No 1
Mouse
No 1
Keyboard
No 1
The company assembled 22 computers Athlon using the peripherals listed in the
above table and stored the same in the finished goods godown. Wages of Rs.
33000 and overheads of Rs. 2200 were incurred.
The wages Rs.33000 were paid by cheque.
Received cheque from Interfex Corporation in full settlement for sales bill.

09-12The following items were transferred from raw material godown to assembling
2009
godown.
item
quantity
Processor p4
25
Monitor
50
Hard disk
50
Keyboard
50
Mouse
50
motherboard
50
Processor Athlon
25
10-12-2009

The company received a sale order for 10 Computer Athlon from Informatics
India Ltd to be delivered on 20-12-2009 at Rs. 22000 each. (Order no. IIP-01)
In F11 features- Inventory features- set allow sales order processing to yes.

Create ledger Informatics India Ltd under sundry debtors.


Make an entry of the transaction in sales order voucher Alt+F5 using sales vat rate @ 4%.
23.

13-12-2009

Sold to Toonz Animation, Mumbai, 10 no.s of Computer Athlon on credit of 15


days.
item
quantity
Rate
CST
Computer Athlon
10 nos
23,500
4%

24.

Create ledger Toonz Animation under sundry debtor.


Sales CST under sales account (vat return Yes and select Vat/tax class Inter State sales)
Output CST @ 4%
Make an entry of the transaction in sales voucher using C Form type.
14-12-2009

Items
Monitor
Hard disk

Raised a Purchase order with Raheem Computer (Order no. PO-01) due date
24-12-2009 for the following items.

Quantity(no.s)
100
100

In F11 features (F2) set allow zero


values entries to yes.
Set allow purchase order processing to

51
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Keyboard
Mouse
motherboard

100
100
100

yes.
Vat rate is 4%.

25.

15-12-2009 Advance Income tax of Rs. 5000 paid by cheque.


Create ledger Advance Income tax under Current Assets.

26.

19-12-2009

27.

20-12-2009

Assembled 10 no.s of Computer Athlon and 15 no. of Computer P4 and stored


in finished godown.
Wages: Computer Athlon: Rs. 15000, Computer P4: Rs. 22500.
Overheads: Computer Athlon: Rs. 1000, Computer P4: Rs. 1500.
The above wages amounting to Rs. 37500 were paid by cheque.
Make an entry of the transaction in manufacturing journal voucher

Delivered to Informatics India Ltd. Towards sales order IIP-01 as per delivery
note number DN-01 as per following details.
Item
Quantity
Rate
Computer Athlon
10 nos
22000
In F11 features- F2- set use tracking numbers (delivery/receipt notes) to yes.

Make an entry of transaction in Delivery Note Alt+F8 using sales vat rate @ 4%.
28.

23-12-2009

Informatics India Ltd. Returned 2 no.s of Computer Athlon, which were


delivered on 20-12-2009 as per delivery note no. DN-01, as they were not as
per given specification.
In F11 features- F2- set use Rejection inward/outward notes to yes.
Make an entry of transaction in Rejection In voucher (Ctrl+F6).
29.

23-12-2009

30.

25-12-2009

Received cheque for Rs. 244400 from Toonz Animation.

31.

26-12-2009

Returned 5 no.s mouse to Raheem Computers which were not as per


specification, towards receipt note.

32.

29-12-2009

33.

Received from Raheem Computers against order no. PO-01 as per RN-01.
Item
quantity
Monitor
100
Hard disk
100
Keyboard
100
Mouse
100
Motherboard
100
Make an entry of transaction in Receipt Note (Alt+F9)

A sales invoice was raised on Informatics India Ltd for 8 nos of Computer
Athlon retained by them and a cheque was received.
Make an entry of transaction in sales voucher and receipt voucher.

31-12-2009 Pass a vat adjustment entry.


Make an entry of transaction in journal voucher.
Dr. Output CST@ 4%
Dr. Output vat @ 4%
Cr. Vat adjustment a/c

Transaction for January 2010


34. 01-01-2010 The petty cashier submitted the statement of expenses for December 2009
Salary to staff Rs. 18000.
Electricity expenses Rs. 500.
Conveyance expenses Rs. 1100.
Rent expenses Rs. 15000.
Selling and distribution expenses Rs. 1500.

52
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

35.

01-01-2010

An unsecured loan of Rs. 75000 was taken from Smith & brothers at simple
interest 10% p.a. interest to be paid quarterly. The amount was deposited in the
bank.
Create a ledger Smith & brothers under Unsecured Loans. Make an entry of transaction in
receipt voucher.
36.

02-01-2010

To expand its business, the company opens a branch. To carry on operation at


the branch, the following assets were purchased by the head office by issuing
cheque. The details of the same are as follows:

Building (branch) depreciation 10%


Furniture & fixture (branch) depreciation 15%
Electrical fittings (branch) depreciation 10%
Computer (branch) depreciation 60%
Cellphone (branch) depreciation 15%
Create all branch ledgers under Fixed Assets.
Make an entry in payment voucher.
37.

03-01-2010

2,50,000
20,000
10,000
20,000
2,000

Raheem Computers sent an invoice for the goods retained by the company
towards PO/01.
item
quantity
rate
vat
Monitor
100
3600
Hard disk
100
2200
Keyboard
100
210
4%
Motherboard
100
3100
Mouse
100
140

Make an entry in purchase voucher using receipt note no. RN-01.


38.

05-01-2010

The company paid Raheem Computers Rs. 561272 by cheque as part payment.

39.

06-01-2010

Stock transferred from head office to branch.

Item
Quantity
Computer P4
10
Computer Athlon 10
Make an entry in Stock Journal Voucher.
Create godown branch godown

Rate
16657
16656

Purchased from Spic & Span traders on


Item
Quantity
Mouse
10
Processor(Athlon)
25
Processor(P4)
25
Make an entry in Purchase Voucher.

Godown
Finished goods godown
Finished goods godown

40.

07-01-2010

credit of 10 days.
Rate
CST @ 4%
200
3800
4%
5800

41.

08-01-2010

Cheque issued for Rs. 30,000 to petty cash.

42.

10-01-2010

Sold to Acron clothing ltd. Singapore on credit of 30 days.


Item
Quantity
Rate
Value $

Total amount in
Rs.
Rs. 337500

Computer(P4)
15
$500
$7500
Billing is to be done in US dollars as per the agreement.
In F11 features - (F1) set multicurrency to yes. The Rs. was traded as Rs. 45/ $.
Create the ledger Acron clothing ltd. under Sundry Debtors.

53
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Sales export under sales a/c (vat applicable yes, vat/tax class export).
Create a currency: US Dollar and symbols as $.
Make an n entry of transaction in sales voucher.
43.

14-01-2010

Paid to Spic & Span traders by cheque.

44.

15-01-2010

Transferred by cheque Rs. 75000 from head office to branch.

45.

18-01-2010

Paid to Ultratech computers by cheque Rs. 300000 as part payment.

46.

20-01-2010

The following items were sold to concord packing services on credit of 10 days.
Interest is applicable at 10% p.a. after the due date and 12% interest is further
chargeable from 10-2-10 onwards.
Item
Quantity
Rate
Vat
Computer(P4)
10
28000
4%
Computer(Athlon) 10
25000
4%
In F11 features - (F1) set Activate interest calculation and advanced feature to yes.
Create ledger concord packing services under sundry debtor. Set activate interest calculation and use
advanced parameter to yes.
Ensure that the interest parameter screen displays as shown:

In sales voucher enter the details as per the following figure:

47.

21-01-2010

The company decides to have a price list names price list-1 for the following
items.
Item
Rate
Discount
Computer(P4)
28500
10%

54
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Computer(Athlon) 25500
10%
In F11 features- (F2) create a price list-1 for finished goods.
48.

27-01-2010

Assembled 10 no.s of Computer Athlon and 10 no. of Computer P4 and stored


in finished godown.
Wages : Computer Athlon: Rs. 15000,
Computer P4: Rs. 15000,
Overheads: Computer Athlon: Rs. 1000,
Computer P4: Rs. 1000,
The above wages amounting to Rs. 30000 were paid by cheque.

49.

28-01-2010

Transferred 5 no.s of Computer Athlon from finished goods godown to the


branch godown.

50.

29-01-2010

Branch sold the following items for cash and remitted the same into head office
bank account. Sale was made as per price list-1.
Item
Quantity
Rate
Discount
Vat
Computer(Athlon) 5
25500
10%
4%
In F11 features- (F2) set separate discount column on Invoice to yes.
Make an entry of transaction in sales voucher using price list-1.
51.

31-01-2010 Pass a vat adjustment entry.


Make an entry of transaction in journal voucher.
Dr. Output vat @ 4%
Dr. Vat adjustment a/c
Cr. Input vat @ 4%

Transaction for February 2010


52.

01-02-2010

The petty cashier submitted the statement of expenses for January 2010.
Telephone expense Rs. 1650.
Salary to staff Rs. 18000.
Electricity expenses Rs. 530.
Conveyance expenses Rs. 1000.
Rent expenses Rs. 15000
Printing & stationery expenses Rs. 1000.

53.

04-02-2010

Transferred the following items from raw material godown to assembling


godown.
Items
quantity
Processor p4
25
Monitor
50
Hard disk
50
Keyboard
50
Mouse
50
Motherboard
50
Processor Athlon 25

54.

06-02-2010

The company purchased a cabinet manufacturing machine for 50,000 for which
they paid vat @ 4% (Rs. 2000), payment was made through cheque.
In F12, set allow expense/fixed asset in purchase voucher to yes.
Create ledger cabinet manufacturing machine under fixed assets.
Make a transaction in purchase voucher.
Cr. HDFC bank Rs. 52000
Dr. Cabinet manufacturing machine

55
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

To associate the full value of the goods purchased, the Vat amount is also calculated along
with the original price of the asset purchased.
55. 10-02-2010 Tax authorities allowed tax credit of Rs. 2000 to be set off in a single installment.
Create ledger tax paid on capital goods under current assets.
This ledger is used to record the tax set aside for future amortization (decrease in the value of
intangible assets).
Make a transaction in journal voucher.
Dr. Tax paid on capital goods
Cr. Cabinet manufacturing machine
56.

10-02-2010

Assembled No.20 of Computer Athlon and 20 no. of Computer P4 and stored in


finished godown.
Wages : Computer Athlon: Rs. 30000,
Computer P4: Rs. 30000
Overheads: Computer Athlon: Rs. 2000,
Computer P4: Rs. 2000
The above wages amounting to Rs. 60000 were paid by cheque.

57.

12-02-2010

Received a payment from Acron clothing ltd., Singapore a cheque amounting to


$7500 and bank charges of $50 (Rs. 2500) which is credited to the companys
account.
Exchange rate of $ as on this date is Rs. 46/$.

Create ledger bank charges under indirect expense.


Make a transaction in receipt voucher.
Cr. Acron clothing ltd $7500 (In the fore rate of exchange: forex amount: $7500, Rate of exchange:
Rs. 46/$, Value in Rs. 345000)
Dr.Bank charges Rs. 345000 (In the forex rate of exchange: forex amount: $50, Rate of exchange:
Rs. 46/$, Value in Rs. 2300)
58.

16-02-2010

The following items were delivered to Mahajan Education Trust by price list-1.
(use default tracking number)
Item
Quantity
Rate
Discount
Vat
Computer(P4)
5
28500
10%
4%

Make a transaction in delivery note


59.

18-02-2010

Received a cheque from Concord packing services with interest in the full
settlement of bill dated 20-01-2010.
Alter debit note by defining name of class-simple interest and use class for interest calculation in
voucher type to yes.
In F11 features- (F1) set use debit/credit note to yes.
Create ledger-Interest received (under indirect income).
Make an entry in debit note.
Dr. Concord packing services Rs. 2930
Cr. Interest received
Rs. 2930
Make another entry in receipt voucher.
Cr. Concord packing services Rs. 554130
Dr. HDFC bank
Rs. 554130
60.

19-02-2010

Paid to Ultratech Computers through cheque Rs. 300000 in full settlement of bill
dated 17-0-2009.

61.

20--02-2010

Received invoice from Mohan Bhargav, chartered account towards Internal


Audit Of Account Rs. 25000.

In F11 features statutory & taxation:

56
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

62.

Set enable tax deducted at source (TDS) to yes


Set set/alter TDS details to yes
Enter company TDS deductor details field as per follows:
Tax assessment number (TAN) is a 10-digit alphanumeric number issued by the Income
Tax Department to the deductor.
Income Tax Circle/ward (TDS) is issued by the Income Tax Department and represents
the area where the deductor is supposed to file TDS returns.
Deductor type: corporate or non-Corporate.
Name and designation of the authorized person who is responsible to file TDS returns.
Create the following ledgers:
Mohan Bhargav under sundry creditors. Set TDS applicable to yes.
Internal Audit Expenses under Indirect Expenses.
TDS on Internal Audit under Duties and Taxes. Select nature of payment.
Make an entry of transaction in journal voucher.
Dr. Internal Audit Expenses
Rs. 25000
Cr. Mohan Bhargav
Rs. 25000
Make a TDS deduction entry in journal voucher. Press alt+S button.
Dr. Mohan Bhargav
Cr. TDS on Internal Audit
TDS details for TDS on Internal Audit is updated with the details such as gross amount, income
tax, surcharge, Addl. surcharge and reference.
21-02-2010

Paid to Mohan Bhargav, towards hid invoice after deducting TDS Rs. 1403 on
amount payable to him.
Make an entry of transaction in payment voucher.
Dr. Mohan Bhargav
Cr. HDFC bank

63.

22-02-2010

Received the following items from Islion systems as per GRN No. 786/20-22010
Item
Quantity
Rate
Discount
Vat
Motherboard
10
3200
-4%
Make an entry of transaction in Receipt Note.
64.

23-02-2010

The company decides to use a revised price list to capture a higher market
share for the following items.
Create a price lst-2 with change in prices, effective date as on 23-02-2010.
Item
Rate
Discount
Computer(P4)
28500
15%
Computer(Athlon) 25500
15%

65.

24-02-2010

The following items were sold to Sofdesk systems as per price list-2 and
received payment by cheque. The details are as follows
Item
Quantity
Rate
Vat
Discount
Computer(P4)
10
28500
4%
15%
Computer(Athlon) 12
25500
4%
15%

Make an entry of transaction in sales voucher.


Make an entry of transaction in Receipt voucher.
66. 25-02-2010 The store keeper after a physical verification in the raw materials godown, found
that the stock of mouse was 53 nos. This is adjusted by passing a physical
stock.
Make an entry of transaction in Physical Stock voucher (Alt+F10.)
67.

26-02-2010

The company invested Rs. 14, 00,000 in 6% bonds, interest receivable half
yearly. (Payment made through cheque.
Make an entry of transaction in payment voucher.

57
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

Create ledger Investment in 6% bonds under Investments.


68. 27-02-2010 Credit on capital goods claimed in one installment of Rs. 2000.
Alter voucher type Journal
Name of class: Vat Adjustment Class
Set use class for vat adjustment to yes.
Create ledger Input Vat on capital goods under duties & taxes.
Type of duty: Vat, vat/tax class: Purchase capital goods @ 4%.
Make an entry of transaction in journal voucher.
Select Voucher class- Vat Adjustment Class, Used for: from the vat adjustment screen, select
Adjustment towards purchase of capital goods.
Dr. Input Vat on capital goods
Cr. Tax paid on capital goods
69.

Rs. 2000 (accessible value: Rs. 50000)


Rs. 2000

28-02-2010 Pass a vat adjustment entry.


Make an entry of transaction in journal voucher.
Dr. Output vat @ 4%
Cr. Input Vat on capital goods
Cr. Vat adjustment a/c

Transaction for March 2010


70. 01-03-2010 Issued a cheque for Rs. 4000 to petty cash.
71.

01-03-2010

The petty cashier submitted the statement of expenses for February 2010.
Salary to staff Rs. 18000.
Electricity expenses Rs. 480
Conveyance expenses Rs. 1200.
Rent expenses Rs. 15000
Carriage outward expenses Rs. 1000.
Create ledger Carriage outward expenses under indirect expenses.
72.

03-03-2010

73.

04-03-2010

Paid TDS deducted on Mohan Bhargav invoice, amounting to Rs. 1403 through
cheque.

Sold to Stylex Trading Corporation, on credit, the following items: (Form-C was
issued)
Item
Quantity
Rate
CST
Computer(P4)
5
28500
4%
Computer(Athlon) 8
25500
4%
Create ledger Stylex Trading Corporation under sundry debtors. Type address as Hyderabad and
state Andhra Pradesh.
Make an entry of transaction in sales voucher.
74.

08-03-2010

75.

10-03-2010

76.

15-03-2010

Received a cheque of Rs. 160360 from Stylex Trading Corporation, Towards


part payment of sale made to them, dated 4.3.2010.

Stylex Trading Corporation returned one Computer Athlon as it was not


according to the specification.
Make an entry of transaction in credit note voucher.
The company decided to provide maintenance services for computers. Services
were outsourced to Tech services Ltd. for which an invoice of Rs. 5510
(inclusive of Service Charge Rs. 5000, Service Tax @ 12%. Rs. 600 and
education cess @ 2% on Service Tax Rs. 12) was received.

58
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

(Service Tax amount is automatically calculated using the rates specified in the
statutory master in Tally.)
Service Tax is charged at 12.2%.
In F11 features F3
Set enable Service Tax to yes.
Set set/alter Service Tax details to yes.
Enter company service tax details field as per follows:
Service tax registration number enter the registration number allotted to your company
by the service tax department.
Date of registration- enter the date of registration of service tax for your service.
Assesses code-enter the code given to your company by the service tax department.
Type of Organization- selects the Type of Organization from the list of organizations
menu.
Major Service category name- selects the name of service category from the list of
service categories.
Note: if your company provides two or more services, select the service category that forms the
major part of your business.
Credit Adjustment (%): Enter the percentage of credit adjustment that you would like to
avail of. The default value is 20%.
Service Tax (Sales), which is adjustable Service Tax credit (purchase), is also called
availing input credit.
If your input service (purchase) can be directly related to the output service (sales) then
you can use 100% credit adjustment on the Service tax payable.
Credit adjustment while you pay service tax collected on the sale of services that come
under the service tax category. You can adjust service tax credit availed on purchase of
services (buyer). This adjustment is called Credit against Service Tax. The difference
between the service tax that you have to pay for selling services and the service tax credit
on Purchases that can be adjusted is the payable service tax.
Focal bank Details:
Focal bank code
Focal bank name
Focal bank address
Division
Range
Commisionerate
Create the following ledgers:
Tech Services LTD Under sundry creditors. Set Service tax applicable to yes
Purchases Maintenance Services under purchase accounts. Set Service tax applicable to
yes. Select service tax category as Management, Maintenance or Repair.
Input Service Tax on Maintenance under Duties & Taxes.
Make a transaction in Purchase Voucher.
Enter this using Account Invoice

59
Ph: Manjalpur 9328994901, Sayajigunj 9016667242, Racecourse 9327219987

77.

17-03-2010

Paid Rs. 5510 by cheque to Tech services Ltd. towards bill dated 15-03-2007.

78.

20-03-2010

Raised an invoice on M/S Wintech Computers for maintenance services for Rs.
11224 (inclusive of service charges Rs. 10000 service tax and cess @12.2%
Rs. 1124).

Create the following ledgers:


Wintech Computers Under sundry debtors. Set Service tax applicable to yes
Sales Maintenance Services under sales accounts. Set Service tax applicable to yes. Select
service tax category as Management, Maintenance or Repair.
Output Service Tax on Maintenance under Duties & Taxes.
Make a transaction in sales Voucher.
79.

25-03-2010

Received cheque from M/S Wintech Computers towards bill dated 20-3-2010.

80. 28-03-2010 Service tax paid and service tax input credit is adjusted to output service tax.
Make a transaction in payment Voucher.
In F12- set use single entry mode for payment/receipt/contra to no.
Dr. Output Service Tax on Maintenance
Rs. 1224
Cr. Input Service Tax on Maintenance
Rs. 612

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81.

Cr. HDFC bank


Rs. 612
31-03-2010 Pass the necessary journal entry in order to adjust Forex/Gain Loss.
Create ledger Forex gain/loss A/c under Indirect Income.
Create Forex gain/loss voucher class.
Go to gateway of Tally > account info > voucher type > alter >Journal
Name of class: Forex gain/loss
In the voucher type class screen, set use class for Forex gain/loss adjustment to yes. For ledger
name: select ledger Forex gain/loss A/c.
Make a transaction in Journal Voucher using class as Forex gain/loss class.
Cr. Forex gain/loss A/c
Dr. Acron Clothing ltd.

82.

31-03-2010

Interest paid on unsecured loan taken on 1-01-09 Rs. 1875 for 3 months.

Create ledger interest on loan (under indirect expenses).


Make a transaction in payment Voucher.
83.

31-03-2010

Branch submitted statement of expenses for the period (Jan., to march).


Branch maintenance expense
Rs. 6000
Telephone charges
Rs. 1800
Salaries(to branch staff for 3 months)
Rs. 18000
Electricity expenses(for 3months)
Rs. 1200
Conveyance expenses(for 3months)
Rs. 1500
Create the above branch ledgers under indirect expenses.
Make a transaction in journal Voucher.
Dr. All branch ledgers
Cr. Branch account
84. 31-03-2010 Pass a vat adjustment entry.
Make an entry of transaction in journal voucher.
Dr. Output CST @ 4% Rs. 12840
Cr. Vat adjustment a/c Rs. 12840
Provision/Adjustment entries
85.

31-03-2010

Pass the necessary provision/ Adjustment entries for the following:


Staff salaries
Rs. 18000
Telephone expenses
Rs. 1850
Electricity expenses
Rs. 575
Conveyance expenses
Rs. 900
Preliminary expenses written off
Rs. 20%

Create the following ledgers:


Preliminary expenses written off under indirect expenses
Salary expenses payable under provisions
Telephone expenses payable under provisions
Electricity expenses payable under provisions
Conveyance expenses payable under provisions
Make an entry in journal voucher:
Dr.
Salary expenses
Telephone expenses
Electricity expenses
Conveyance expenses
Preliminary expenses written off
Cr.
Salary expenses payable
Telephone expenses payable
Electricity expenses payable

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Conveyance expenses payable


Preliminary expenses written off
86.

31-03-2010

Rent to be paid for march 2010 is Rs. 15000.

Create ledgers rent expenses payable under provisions.


Make an entry in journal voucher:
Dr. Rent expense
Rs. 15000
Cr. Rent expense payable
Rs. 15000
87.

31-03-2010

Interest accrued on 6% bonds for march 2009.

Create ledger
Interest accrued under Current Assets.
Interest on 6% bonds under Indirect Income.
Make an entry in journal voucher:
Dr. Interest accrued
Rs. 7000
Cr. Interest on 6% bonds
Rs. 7000
88. 31-03-2010 Transfer the vat credit in vat adjustment account to vat credit receivable.
Create ledger Vat credit receivable (input) a/c under Loans and Advances
Make an entry in journal voucher:
Dr. Vat credit receivable (input).
Rs. 11688
Cr. vat adjustment account
Rs. 11688
89.
SL.
No.
1
2

31-03-2010
Asset name

Pass the required depreciation entry.


Opening
balance (a)
50000

Depreciation (%)
(b)
10%

Depreciation (c)
(a)*(b)*6/12=(c)
2500

Assembling tables
Static electricity resistance
40000
60%
12000
gloves
3
Voltage parameter testing
30000
50%
7500
meter
4
Furniture & fixture
50000
15%
3750
5
Furniture & fixture
20000
15%
1500
(branch)
6
Electrical fittings
20000
10%
1000
7
Electrical fittings
10000
10%
500
(branch)
8
Computer (admin)
40000
60%
12000
9
Computer branch)
20000
60%
6000
10
Building (branch)
250000
10%
12500
11
Cell phone (branch)
2000
15%
150
As per the policy, if assets are used for more than six months, full depreciation is charged. If used for
less than six months, half the depreciation amount is charged.
Create ledger Depreciation under indirect expenses.
Make an entry in journal voucher.
Dr. Depreciation
Rs. 59400
Cr. Assembling tables
Rs. 2500
Cr. Static electricity resistance gloves
Rs. 12000
Cr. Voltage parameter testing meter
Rs. 7500
Cr. Furniture & fixture
Rs. 3750
Cr. Furniture & fixture (branch)
Rs. 1500
Cr. Electrical fittings
Rs. 1000
Cr. Electrical fittings (branch)
Rs. 500
Cr. Computer (admin)
Rs. 12000
Cr. Computer (branch)
Rs. 6000

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Cr. Building (branch)


Cr. Cell phone (branch)
90.

31-03-2010

Rs. 12500
Rs. 150

The board of directors declares a dividend of 20% (for 6 months) on Equity


Share Capital.

Create ledger proposed dividend under current liabilities.


Make an entry of the transaction in journal voucher.
Dr. Profit & Loss a/c
Rs. 250000
Cr. Proposed Dividend
Rs. 250000
91.

31-03-2010

The board of directors decides to transfer the remaining Profit to general


reserve.

Create ledger General Reserve Account under reserve & surplus.


Make an entry of the transaction in journal voucher.
Dr. Profit & Loss a/c
Rs. 340786
Cr. General Reserve Account Rs. 340786

Lesson: 10 Payroll
10.1 Payroll Introduction
To enable Payroll Feature in Tally.ERP 9

To enable Payroll Feature in Tally.ERP 9

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Step 1: Create Employee Masters

Create Employee
Master
Employee
Masters

Employee Groups

Step 2: Create Payroll Masters

Create Payroll
Master

Payroll Units

Attendance/Production
Types

Step 3: Create Pay Heads

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Create Pay Heads

Earnings

Deductions

Employees
Statutory
Deductions

Employers
Statutory
Contributions

Five Easy Steps to Generate a Payslip

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10.2 Payroll Info.

Creating Employee Group


An Employee Group allows you to group employees in a logical manner as required.
The Salary structure can be defined at the Employee Group level.
For example, you can create the Salary structure based on the department or function such
as Production, Sales, Administration and so on, or by designation such as Managers,
Supervisors, Workers and so on.
Creating Single Employee Group

Creating Multiple Employee Groups

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Creating Employees
Employee Master records the relevant information about the employee.
Tally.ERP also allows you to enter the Statutory, Expat and Contract details of the
employees.

Creating Single Employee

Creating Multiple Employees

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Creating Payroll Simple Unit


Select Type as Simple.
Enter the Symbol for the Unit.
Enter the Formal Name.
Provide the Number of Decimal Places for the Unit if you want to use the Unit in fractions.

Creating Payroll Simple Unit

Creating Attendance/Production Types


The Attendance/ Production type is used to record the attendance and production data.
Examples for attendance/ production types are No. of days present or conversely, No. of days
absent and production based such as Hours worked, Number of Pieces produced.
Creating Attendance Type

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Flat Rate
Where the value of the Pay head is a fixed amount for a period. (Pro-rata will not happen in
this type of the component).
Examples of Flat Rate Calculation Type:
Conveyance Allowance of Rs. 800.00 per month is exempt from tax and followed by many
organizations.
Fixed Loan Installment deduction amount.
On Attendance
Based on the attendance data where the component will get pro-rated.
In Tally.ERP 9 the attendance can be recorded as positive days (Present) or loss of pay
(Absent) type.
Example: Basic Salary is calculated on Attendance.
Attendance / Leave with pay
If you want to calculate the Pay Head Value using the Positive Attendance (Present).
Leave without Pay
To calculate the Pay Head Value using the Negative Attendance (Absent).
On Production
On Production Calculation Type is used to calculate the pay value based on the
Production/Work down.
As Computed Value
As Computed Value is used if the Pay Head value is based on a dependent component.
You will be able to define the dependent component by specifying the formula or using the
current sub-total or current earning or deduction total.
You can also define the slab either by percentage to value or the combination in a slab.
Example: HRA as 40% of Basic Salary.
As User defined Value
As User defined Value allows you to manually enter the value at the time of processing the
salary.
This Calculation Type is used when the value of pay is not fixed and does not depend upon
any pay components.
Example: Incentives or Variable Salary.
Creating Attendance based Earnings Pay Head

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Creating Computation based Earnings Pay Head

Creating Flat Rate based Earnings Pay Head

Creating Production based Earnings Pay Head

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Creating User Defined Earnings Pay Head

Creating Employees' PF Deduction Pay Head

Similarly, you can create the Pay Head for Voluntary Provident Fund Deduction also.

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Note: To restrict the PF Deduction to Rs. 780, you can specify 12% in the Value Basis and 0
to 6500 in the Form Amount and Amount Up to fields respectively. For amount beyond 6500 the
specify 780 in the Value Basis field.
Creating Salary Advance Deduction Pay Head

Defining Salary Structure


Creating Salary Details for Employee Group

10.3 Voucher Types in Tally.ERP 9 Payroll


Attendance Voucher is used to record employees Attendance / Production data for the
Attendance/Production Types created in Payroll Masters.
Payroll Voucher is a document to manually enter one-time/ad-hoc payroll transactions for
individual employees; as well as Payroll processing activity for all or selected employees,
using Auto Fill functionality.

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PAYROLL PROCESS
Recording Attendance / Production
Processing Payroll Vouchers
Processing Employer PF Admin Expenses
Payment of Salary
Payment of PF
Payment of ESI
Payment of PT
Creating Attendance / Production Voucher
Enter Attendance, Overtime, Leave or Production details.
Enter separate vouchers for each day or
Enter a single voucher for a given pay period, say a month, with aggregated values.
Enter data for one or more or all employees.
Enter one or more Attendance types together in a single voucher.
Attendance Voucher Manual Entry

Creating Payroll Vouchers


Record the Payroll related data for Employees and Employers contribution.
Enter separate vouchers for each day or
Enter a single voucher for a given pay period, say a month, with aggregated values.
Enter data for one or more or all employees.
Salary Process

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10.4 Statements of Payroll

Payslip

Pay Sheet
Pay Sheet is a matrix report with category, groups and employees cascading in rows, and
Pay Heads appears as columns. The default report contains all earnings and deduction
details for a given month or period with a number of options to reconfigure the appearance of
rows and columns.
Format of the pay sheet report may be configured to serve as a Salary/Wage register as
required by the organization.
The selection of data can be filtered based on a given category or group of employees.

Pay Sheet

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Go to Gateway of Tally > Display > Payroll Reports > Statement of Reports > Pay Sheet

Payroll Register
Go to Gateway of Tally > Display > Payroll Reports > Statement of Reports > Payroll Register
Employee Payroll Register

Attendance Reports
Attendance Sheet
Attendance Register
The Attendance Sheet report is similar to Pay Sheet report, and displays a pre-formatted report
with columns, related to your Attendance/Production data.

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Attendance Register is report is similar to Payroll Register and displays the summary report of the
Attendance vouchers.

Attendance Register

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Lesson: 11 Excise in Tally

11.1 Introduction
Excise duty or Duty of Excise is a tax on goods purchased or manufactured in India and intended for
home consumption i.e. sale in India. Excise duty is chargeable at the time of production or
manufacturing, but for convenience it is charged at the time of removal.
It is an Indirect Tax on the manufacturer or producer which is passed on to the ultimate consumer.
The levy and collection of Duty of Excise is provided under authority of them Central Excise Act. 1944
at rates specified under the Central Excise Tariff Act. 1985. The duty is commonly referred to as Basic
Excise Duty. Certain items like fiber, yarn and so on also attract Additional Excise Duty under
Additional Duties of excise Act. 1975.
Basic concepts:
The following are the some basic terms related to Excise:
1. Excisable goods: Excisable goods are goods specified in the schedule of the Central Excise
Tariff Act, 1985 as being subject to duty of Excise. The basic conditions to be satisfied are:
The goods must be movable.
The goods must be marketable (saleable in market as such goods). Actual sale of goods in the
market is not necessary as excise duty is chargeable on manufacture and not on sale.
The goods must be specified in the Central Excise Tariff Act.
2. Dealer of Excisable Goods: A dealer of excisable goods is one who is registered under Central
Excise Rules. The following categories would constitute a registered dealer.
Depot of a manufacturer or the premises of the consignment agent of the manufacturer or any
other premises from where the goods are sold on behalf of the manufacturer.
First stage dealer of excisable goods.
Second stage dealer of excisable goods.
Depot of an importer or the premises of the consignment agent of the importer.
First stage dealer of imported goods.
Second stage dealer of imported dealer.
3. First stage dealer: A first stage dealer is a dealer who purchases the goods directly from:
The manufacturer registered under the provisions of Central Excise Rules, 2002, or
representative of such manufacturer, under cover of an invoice.
An importer or from the representative of such importer, under cover of an invoice.
4. Second stage dealer: A second stage dealer is a dealer who purchases the goods from a first
stage dealer.
5. Registration of dealer: Every dealer or importer issuing cenvatable invoices should be
registered with the jurisdictional range superintendent as per the procedure prescribed in rule 9 of
Central Excise (No. 2) rules 2001. The registration is valid only for the premises for which it is
granted. Where the manufacturer or dealer has more than one premise, it is necessary to obtain a
separate registration for each premise.
The registration number is a PAN based 15 digit alphanumeric numbers. The first 10 characters
denote permanent account number issued by Income Tax authorities and the next two characters
are code as shown below and the last three digits denote number of premises registered (001,
002 and so on).
S. No.
1
2

Category
Central Excise Manufacturers
Registered Dealers

code
XM
XD

6. CENVAT Credit: A manufacturer or producer or final products is allowed to take tax credit known
as CENVAT Credit.
7. Enable Dealer Excise in Tally: Tallys Dealer Excise module facilitates complete excise
accounting for dealers engaged in trading of excisable goods and desiring to issue cenvatable
invoices. It minimizes the possibility of erroneous data entry and ensures transparency.
8. Features of Dealer Excise Compliant tally: The features of the excise modules in tally are:
Simple and user friendly.

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Easy to set up and use.


Generates Excise invoices raised by first and second stage registered dealers to pass on
CENVAT Credit.
Allow batch wise inventory details.
Provides an option to print details of Manufacturer/Supplier and all other relevant particulars
of the purchase invoice.
Track item history of Excisable goods.
Generates statutory returns and excise related reports.

9. Company Setup
Create a company Arcelor Industries, which deals with cold rolled coils, sheets, scalp, and has a
bank account in HSBC with an opening balance of Rs. 560000.
In F11 features in F3- set enable Dealer Excise to yes and set alter dealer excise to yes. Ensure
that the completed Company Excise details screen displays as shown.

Set enable Value Added tax (VAT) to yes and set alter vat details to yes.

11.2 Excise Transactions

1.

15-4-2010

Arcelor Industries purchased the following items from Stalin Steel Industries
(manufacturer) (Invoice No. 487)
Item description
Qty (Mts)
Rate
Accessible Value
Excise duty @ 16%
Education cess @ 2%
Total amount
Vat @ 4%
Invoice Amount

Hot rolled Coils 100 mm


400
500
2,00,000
32,000
640
2,32,640
9,30,560
2,41,94,560

Create a voucher type for Excise purchases.


Set feature Use for dealer Excise to yes.
Create ledger
Stalin Steel Industries under Sundry creditors.
Set Excise details to yes.
Purchase Excisable goods under Purchase Accounts.
Set enable Vat to yes.
Input vat @ 4% under duties and taxes.
Create unit of measure MT (metric tons)
Create Stock item
Hot Rolled Colils-100 mm under primary

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Unit MT, excise details to yes.


The duty details for item display as follows:

Make an entry in Excise Purchase Invoice.


Select party name Stalin Steel Industries, enter supplier details.
Nature of purchase Manufacturer.
Select item Hot Rolled Coils 100 mm, Enter quantity 400
Press enter in amount field to view stock item excise details screen.

The completed excise purchase invoice displays as shown:

2.

20-4-2010

Arcelor Industries sold the following items to Decora Engineers.


Item description
Qty (Mts)
Rate
Vat

Hot rolled Coils 100 mm


250
600
@ 4%

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Create a voucher type for Excise sales.


Set feature Use for dealer Excise to yes.
Create ledger
Stalin Decora Engineers under Sundry Debtors.
Set Excise details to yes.
Sales Excisable goods under Sales Accounts.
Set enable Vat to yes.
Output vat @ 4% under duties and taxes.
Make an entry in Excise sales Invoice.
Adjustment for Goods Returned
3.

25-4-2010

Decora Engineers returned the following items to Arcelor Industries.

Item description
Hot rolled Coils 100 mm
Qty (Mts)
5
Rate
600
Vat
@ 4%
Create a voucher type for Excise sale return. Type of voucher: credit Note
Set Use for dealer excise to yes.
Enter transaction in Credit Note (type of voucher: Excise sale return).
Select Goods Sold Returned as the type of vat adjustment in the Used For field.
Enter the required details.

Lesson: 12 Budgeting Systems, Scenario Management and


Variances Analysis
12.1 Budgets-Definition and Types:
A budget is a quantitative statement which covers costs, revenues and output. It is a financial tool for
managers which give an expected level of future performance against which the actual performance
is measured. It could also be termed as a measure of the results expected from the planned activities
of a company. In some cases, it serves as a financial and non-financial blue print for a company.
A budget facilitates the following decisions.
Operating decisions: Cost of operation, business volume and revenue strategy decisions.
Financing decisions: Trade credit, finance sourcing choices, dividend policy and so on.
Investment decisions: Working capital restructuring, physical assets requirement, projects and
decision on major expenditures.

12.1.1 Advantages of a Budget


Supports strategy development.
Helps in performance assessment and incentives.
Acts as a directive for day-to-day decisions and operational planning.
Promotes co-ordination and communication within a company.
A budget helps the management to decide what to expect of its resources for the period
considered.

12.1.2 Types of Budgets


Budgets may be classified under two categories.
Fixed
Flexible

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A Fixed Budget is one which is not adjusted for changes in the volume of service. It is
designed to remain unchanged, irrespective of the level of activity attained, and is usually prepared
for defined quantitative and financial levels.
A Flexible Budget is based on different levels of activity, i.e., it is dynamic in nature. It is a very useful
tool for comparing actual costs vis--vis the cost allowable, for the activity level activity level achieved.
Flexible budgeting distinguishes between fixed and variable costs, thereby allowing for a budget
which can be automatically adjusted to any level of activity. It is a budget which is designed to be
modified in accordance with the level of activity of operation

12.1.3 Treatment of Budgets


The budget process represents an orderly manner of sorting the financial impact of investment,
operational and financial decisions. However, different organizations use budgets in different ways. In
most cases, the budget is used is as a yardsticks to compare actual with budgeted figures. A revised
budget is prepared if changes in the environment are drastic. Some organizations follow rolling
budgets over each quarter or over 12 months to ensure that budgeting is a continuous exercise.
Some centralized managements, with more rigid controls, prepare periodic budgets which are used to
set controls and limits which cannot be exceeded.

12.1.4 Budgets in Tally


Tally has several user friendly features which enable the creation of multiple budgets. There could be
budgets for specific purposes such as marketing budget, finance budget and so on. Set Maintain
Budgets and Controls in F11: Features Accounting Features to Yes.

Go to Gateway of Tally>Accounts Info.>Budgets>Create


The fields which displays in the Budget creation screen and the actions to be taken are given as
follows:
Fields
Actions
Name
Type name of Budget (corporate budget)
Under
Select primary
Period of Budget: refers to the date range for which the budget will be generated. The period could be
month, year or any other period specified.
From
Type starting period
To
Type ending period
Set/ Alter Budgets of: Tally allows you to set budget for groups of ledger accounts, individual ledger
accounts, cost centers or all of them. You can budget for as many groups and ledgers as required.
Groups
Set yes and select the groups.
Ledgers
Set yes and select the ledgers
In the group budget screen, enter the following details:
Direct expenses
Indirect expenses

On net transaction
On net transaction

150000
12400

In the ledger budget screen, enter the following details:


Conveyance expenses
Wages
Carriage outward expenses
Electricity expenses
Advertisement expenses
Selling and distribution expenses

On net transaction
On net transaction
On net transaction
On net transaction
On net transaction
On net transaction

5400
150000
500
3000
2000
1500

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To view the budget created:


Go to gateway of Tally > display > Trial balance
Press alt+F2 to change the period.
Click new column from the button bar. Enter the required details.
In the type of value to show: select name of budget
Trial balance will show the budget details of actual and the corporate budget.

12.1.5 Variance Analysis:


Variance is the deviation of the actual cost from the standard cost, whereby each variance is analyzed
by sub-dividing it with the total variance.
To view budget variance:
Go to gateway of Tally > display > Trial balance
Press alt+F2 to change the period.
Click budget variance or press (Alt+B) from the button bar. In the budget analysis screen which
displays, select corporate budget as the budget for the variance analysis.

12.1.6 Scenario Forecasts


A forecast is the prediction of future results based on present performance. The difference between a
forecast and a budget is that a budget is a planned exercise to achieve the desired possible result,
where as a forecast predicts results in the future, based on the current days actual performance.
Advantage of using Scenarios:
 It is useful for giving a business different forecast for a set of imagined circumstances in the
future.
 An entry can be recorded when required and removed at a later stage, for example after
printing the generated report.
Reversing journals:
A reversing journal, which is a non-accounting voucher, is a special journals entry which can be
automatically reversed after a specified date. It exists only till that particular date and is effective only
when called for in reports such as the balance sheet.
Memorandum Vouchers:
A memorandum voucher is a separate voucher type. It is a non accounting voucher. Tally does not
post memorandums voucher to ledgers, but stores them in a separate Memo register.
Optional Voucher:
An accounting can be excluded from the books of account by making it as Optional using a specific
feature in Tally. To avail this facility, set Use Reversing Journal and Optional Vouchers to yes in
F11 features (F1). You can mark a voucher as optional by clicking the button L: optional voucher
on the vertical button bar.
Optional voucher is not a voucher type. User has the option to bring this voucher into accounting
temporarily and see the effect on financial reports. Any voucher type, except non-accounting voucher,
can be designed as an optional voucher.

12.1.7Scenario management in Tally


Set Use Reversing Journal and Optional Vouchers to yes in F11 features (F1).
To create a scenario
Go to gateway of tally > account info > scenario > create

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This fields which display in the scenario creation screen and the appropriate actions to be
taken are given in the following table.
Field
Name
Include Actual This Field is set to yes if the actual need to be viewed
in the reports.
Exclude forex Gain/Loss Calculations :This Field is set to yes if the
unadjusted forex Gain /Loss element need to be viewed in the
scenario
Exclude Inventory tracking Calculations :This field is set to yes if the
sales /purchased bills pending element need to be viewed in the
scenario
Include :In this field the type of voucher which are required to affect
the scenario created have to be selected from the list of voucher
displayed .only voucher which do not affect the books of accounts
are permitted for selections
Exclude: In this field the type of voucher which are required not to
affect the scenario created have to be selected from the list of
voucher displayed

Action
Type scenario one
Set -yes
Set-No
Set no
Select Journal

Select End of list

The scenario creations screen displayed as show

To Created Scenario- Two enter the details given in the following table
Field
Name
Include Actual
Exclude forex Gain/loss Calculations
Exclude Inventory Tracking Calculations
Include
Exclude
To view the effect of scenarios

Actions
Type Scenario two
Set Yes
Set No
Set No
Select Memorandum
Select end of List`

Make an entry in a Journal and mark it as optional by clicking the button ctrl + L
Particulars
Depreciations
Assembling Tables
Static Electricity Resistant
Globes

Dr
19375
-----

Cr
1250
6000

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Voltage parameter Testing (VPT)


Meter
Electrical Fittings
Computer (Administrations)
Furniture and Fixture

---

3750

-------

500
6000
1875

12.2 Security control


Security control is required in an environment where many people work on the accounts on a single
computer or on a network. In a typical business environment, each level of staff have different
responsibilities and, Therefore, different authority. Tally has a variety of management reports which
are sensitive in nature .the Security control feature in Tally is used to set access and authority rights
for groups of allow or private them from doing one or more of the following :Created ,Alter, Display
and print information
Security Control can be used to prevent access to the system .the authority levels or type of Security
in Tally decide the of the user
Tally has two security set-ups, one for the Owner and the for Data Entry
The owner has full access and right to all parts tally ,excepts Tally Audit, Which is reserved for the
administrators alone
Data Entry has restricted rights .You are allowed to create other security type based on these
predefined types.
Security Control can be activated during Company Creation or from Company Alteration screen. Once
activated, Tally instructs you to enter the name of the administrator and a password. This security
control feature restricts unauthorized users from accessing, viewing and altering the data in Tally.
To active.
ate the Security Control System,
Go to Gateway of Tally >F3: Company Info > Alter

1.
2.
3.
4.
5.
6.
7.

Select Syscon computer Ltd.


Select yes in the Use Security Control field.
Type Admin in the Name of Administrator field.
Type admin as Password. (Password is case sensitive)
Type admin in the Repeat field.
Select No in the Use Tally Audit Features field.
Press Enter to accept the changes.

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Exit Tally after the modification implementented in the Security control fields. Now, attempt to open
Tally opens the Company Login screen where you will be asked to enter the User Name and
Password. Type Admin (Name of the Administrator) in the Name of User field and Admin in the
Password (if any) field. Press Enter Login.

12.3 Created users and Passwords


Use Alt+F3 and view the company info menu
Press Enter on security Control and a sub-menu displayed

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The menu allows you to define access under Users and Passwords
User Name: Karan
Password: Bit123
Security Level :Owner

Type of Security
In security Control, Click Type of Security .The screen display as show

Under List of security Levels ,the default value is Data Entry


Press the Down Arrow key to created a new security
Enter Karan in the List of security Level field
Press Entry to view the security Levels screen
Name of Security Level: This default to the name (Karan) which you have created. Press Enter to
go the Level Definitions screen, where the following fields are displayed
Use Basic Facilities of: By default this field displayed owner .However, the other options, i.e., Data
Entry as also available the list dose not display when you are the field, Press O and being to type the
word for the list to display
Select Owner from the Security List
Days Allow for Bank-Dated voucher :This is the durations of time user ,at this level are allowed
specifying zero will indicate that back dated voucher are not allowed .This is effective only if you
disallow back dated entries in the Disallow Column
Retain the Default as 0
Cut off date for back-dated vouchers: Specify the date before which user of this profile or security
level cannot create or alter voucher .This is additional control over the previous Days Allowed .It is
useful in cases where. For example, you have computed your tax Assessment for a period and no
charges are desired in the data for that period.

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Leave Blank
The screen is divided into two broad columns with two sub-columns .The left of the screen is to
disallow access to the various options of the system ,While the right of the screen denotes the
security level for different facilities
The sub-columns are Types for Access and List of Report under both Allow and disallow Facilities
.Entry the type of Access which you wish t give and the options sought to be controlled .Once the
entry is completed, Select End of List form Type of Access field to complete the allocations.
After the setting have been entered, the screen for Level Definitions displayed as shown

Accepts the above setting and the screen Security Levels for Company opens .Following the same
procedure if you want to create another Security level .Else Accepts and return to the Security
Control menu
Note: Only the Administrator can assign users and their passwords
In the following transactions details or March 2009, you will see how the Security Level has been
implemented in tally
Open the company using the following
Username: Karan
Password: Bit123.

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Lesson: 13 Tally.ERP 9
Tally.ERP 9 has been designed with you in mind. Powerful connectivity makes information available
with your staff, CA and other professionals, round-the-clock, in any place. Tally.ERP 9 has all the
features required for high performance business management including remote access, audit &
compliance services, an integrated support center and security management.

13.1 Advantage of Tally.ERP 9


Powerful remote capabilities that boost collaboration
Easy to find qualified personnel
Easy to customize
Low cost of ownership via quick implementation.
New features in Tally.ERP 9
In ledger vouchers report, the cost center details were not shown for ledgers other than the
selected one.
From the Tally.ERP 9 release 1.2 you can specify multiple paths for the data directories.
In dealer excise invoice printing configuration invoice configurations are provided.
Print Mfgr /importer name & address
Print purchase excise duty details.
Print Mfgr /importer excise duty details.
Print passed on duty accessible value.
In sales voucher the option special rate is provided.
TDS computation party wise report is provided.
TDS ledger outstanding report was displaying VAT duty ledgers outstanding details also.
Journal register columnar was displaying expense wise details.
In voucher types decimal portion under percentage field in voucher class is increased from
three to four decimal places in order to give more accuracy.
In accounting report budget variance button is not required.
The full screen has been enabled for all accounting and inventory masters by minimizing the
calculator pane.
In payroll a new group Misc. Expenses (Assets) under earning for employees is available for
selecting while creating the Pay heads.
Backup or restore option was not working for data whose company name consisted of special
characters such as brackets or quotes.
In sales order and purchase order summary, the shortcut key Alt+R used for removing the
lines was not working.
In payroll when the provident fund gross contains pay heads with user defined value, the
provident fund was not getting calculated.

13.2 Remote Access


Tally ERP 9 provides remote capabilities to its users to access data from anywhere, Using Tally.Net
features, the user can create remote users (ids), authorize and authenticate them to access company
remotely. Currently, the remote connectivity allows the user to view/display the required information
on his system instantly.
The process for remote access is as follows:

Start Tally.Erp9, load the required company and connect to Tally.net


Enter the remote user Id at the remote login location to access company data from Tally.Erp9
Licensed / Educational.

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Requirements for Remote Connectivity


At the customers Location:
A valid Internet connection
A valid Tally.ERP9 license with a Tally.net subscription
Create and authorize remote users for a company that has to be accessed remotely
Load & Connect the Company to Tally.NET for remote access
Note: for the company to be accessed by the remote user the computer has to be kept on and
tally.erp9 with company loaded.
At the Remote Location:
A valid internet connection
Tally.ERP9 (Licensed / Education)
A valid remote user Id and password
Benefits of Remote Access:
Provides anytime, anywhere access to required information
Allows you to access reports & statements on the move to keep yourself updated with the
latest business happenings.
Enhances response time to customers (for e.g. sales staff can access Customers
outstanding statement for immediate reference / discussion)
Easy access to financial information for faster & timely decision making.
Data Security:
The remote connectivity is initiated with a secured handshake between two computers using
Tally.NET environment.
customer can allow / disallow access to the company data for remote users at any point of
time.
Data resides on the Customers Computer only.
Encrypted Data is transferred between two computers on request.
The customer can assign security controls to remote users depending upon what access to
be given.
For the Remote user(s) Back up / restore options will not be available in the remote location.
Remote TDLs
During remote access, the additonal TDLs running at the customers place will also be
available to the remote user at the remote location.
The user experience remains the same wither working locally on customers computer or
from a remote location. It is recommended to use broadband conncetions to enjoy the best
remote experience.

13.3 Tally .NET


Tally.NET is an enabling environment which works behind the scenes to facilitate various internet
based services in Tally.ERP 9. Each Tally.ERP 9 is enabled for Tally.NET services by default.
Tally.Net provides the following services/ capabilities in this release of Tally.ERP 9:
Tally .NET Features
Create and maintain Remote Users
Remote Access
Control Centre
Support Centre
Synchronization of data (via Tally.NET)
Product updates & upgrades
The following services will be available in the forthcoming releases:
Online help capability in the form of reference manuals, articles and FAQs

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Access information from Tally.ERP 9 via SMS from mobile


Employer Recruitment Test

Tally Admin Tool


The Tally Admin tool is a new component that has been introduced with tally.ERP 9 which enables
the user to perform the following activities without starting Tally.ERP 9

Initiate License Service operations.


Display the active Tally.ERP 9 License Servers in a LAN.
Administer site license for different products form Tally.ERP 9
Check network connections between the computers designated as Client and server.
Convert TCP and TSF files of Tally 9 to the format compatible with Tally.ERP 9
The Tally Admin Tool is available in the Tally.ERP 9 application folder, on installation.

13.4 Introduction to TDL Server DLL Component


Tally.ERP 9 onwards, a new component TDL server. DLL has been introduced, which gets copied to
the folder in which Tally.ERP 9 has been installed. All the default TDL files of Tally have been
integrated in this component. On invoking Tally.ERP 9, these TDLs will be loaded. The user TDLs
will be subsequently loaded as usual from Tally.ini. The componentization will result in a more robust
application. The benefits of this componentization are as follows

In case of any updates / changes in TDL, only TDL Server.dll file needs to be downloaded
and not the entire Tally application which enables faster downloads.
This will help in dynamic loading and unloading of TDL files while tally application is running.
Forthcoming Tally developer will be directly using this component, thus eliminating the need
for a separate DefTDL.dat file.

Unified File Format for Tally.ERP 9


The Tally.ERP 9 application folder contains files other than the data files. These are referred to as
secondary files. From this release onwards the file format of all the secondary files has been
standardized.
TCP Files
All the TDL files which were compiled for previous versions of tally as.tcp have to be converted to a
new format. Mentioned below are the ways in which this can be done.

13.5 Control Centre


Control Centre is a new feature being introduced with Tally.ERP 9. This utilizes Tally.NET as an
interface between the end user and Tally.ERP 9 installed at different locations. With the help of
control centre, you will able to:

Create users with predefined Security levels


Centrally Configure & manage your Tally.ERP 9
Surrender, confirm or reject activation of a site]
Maintain Account related information

Following are brief descriptions of the features of the Control Center:


Create users with predefined Security levels
Using the control Centre feature, the account administrator can create map them to a predefined
security level and authorize them to access a site/Location linked to that account. Further, the

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system administrator can also create remote users (Tally.NET users & Tally.NET
auditors) and allow / disallow them to remotely access the data.
The predefined security levels in Tally.ERP 9 are:
Owner This security level refers to the ownership for the complete account. the owner can
create standard users or owners with required permissions.
Standard user Created by the owner with required permissions.

Surrender, confirm or Reject activation of a Site


The account Administrator is authorized to surrender, confirm a site license or Reject the
request received on activation form another site.
Maintain Account related information
The account administrator is authorized to surrender, confirm a site license or reject the
request received on activation from another site.
Maintain account related information
Allows you to maintain information about the organization. Based on the requirements, the
account administrator can merge multiple accounts into one or split an account into multiple
accounts for easy and better management.

13.6 Support Centre

Tally.ERP 9 provides a new capability known as support centre, where in a user can directly
post his support queries on the functional and technical aspects of the product. Using support
centre feature, the user can view all the support queries reported via support centre and also
through other modes via., Email, calls, etc.
The support centre feature facilitates viewing queries for and activated license along with the
stats i.e. closed / pending and Ticket summary. The report is viewed based on Date, status
and location.
Faster reach for help and support
The support centre makes it easy and convenient to reach out tally support, including the tally
service partner, for nay product help and support, by a click of a button from within the
product.
Access solutions to your problems any time
This feature facilitates instant reference to the solutions provided for your queries at any point
of time.

Lesson: 14 Ratio Analysis


Introductions
Ratio Analysis is a key performance indicator of a company. This is a report which the management
uses to gauge the financial health of a company and where it is headed in the short term. It is a single
sheet report that allows a companys performance over a specified period of time.
The ratio analysis report provided details on significant business issues such as operating cost figures
and return on working capital. It helps to:
Evaluate companys current performance.
Compare companys current performance with the past
Compare companys current performance against that of other companies or industry standard.
Study the efficiency in the production process.
Study the risk involved in the production process.
Rat io an al ysi s in T al l y

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Ratios normally have decimal places. To view the true ratios in Ratio Analysis statement, the
number of decimal places in the currency information has to be altered.
 To alter currency information
Go to G at ew ay of Ta ll y > Ac co u n t Inf o >Cu r ren ci es > Al t er
Retype the value in number of decimal places field.
 To view the ratio analysis statement
Go to G at ew ay of Ta ll y > R at i o An a l ys i s

Lesson: 15 Cash Flow and Fund Flow Statement


15.1 Cash Flow statement
Cash flow is the inflow and outflow of cash during an accounting period. A cash flow statement
concentrates on transaction which has a direct impact on cash. It deals with the inflow and outflow of
cash between two balance sheet dates.

15.2 Objectives
A cash flow statement is of primary importance to the financial management. It is an essential tool of
short term financial analysis. Its main uses are as follows:
Cash flow statement facilitates sound financial policies, while helping to evaluate the current
cash position.
A projected cash flow statement is prepared to evaluate the future cash position of a company
and to enable a firm to plan and co-ordinate its financial operations properly.
It helps in obtaining loans from banks and other financial institutions. The repayment capacity
of the firm is assessed by going through its cash flow statement.
It helps the management in taking short term financial decisions.
This statement explains the causes for poor cash position despite substantial profits in a firm,
by throwing light on various applications of cash made by the firm.

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15.2.1 Limitations
The cash flow statement is a useful tool for financial analysis. However, it has the following limitations:
A cash flow statement only reveals the inflow and outflow of cash. The cash balance disclosed by
this statement may not depict the true liquidity position. There are controversies over a number of
items like cheque, stamps, and postal orders and so on, to be included in cash.
It cannot be equated with income statement. An income statement takes into account both cash
and non cash items. Hence, cash fund does not mean net income of the business.
Working capital being a wider concept of funds, a fund flow statement presents a more complete
picture than a cash flow statement.

15.2.2 Preparation of Cash Flow Statement


The main purpose of preparing the cash flow statement is to report the sources and uses of cash
during the reporting period. The structure of the cash flow statement is usually classified into three
sections.
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financial activities

15.2.3 Fund Flow statement


A fund flow statement is a financial statement which reveals how the business has been financed
and how resources were used between the opening and closing balance sheet date. Thus, a fund
flow statement is a report which explains the movement of funds, during an accounting period.
This statement consists of two parts:
Source of funds
Application of funds
The difference between these two shows the net change in the working capital for a particular
period. Only those transactions which affect the net working capital of the firm appear in the
statement. The transactions which increase working capital are source of funds and the
transactions which decrease working capital are application of funds.

15.3 Objectives
A fund flow statement is a useful tool for analysis of funds. The basic purpose of this statement is
to indicate the source and application of funds for a given period.
Fund Flow statement:
Determines the financial consequences of business operations. It shows how the funds were
obtained and used in the past.
Helps the management to formulate its financial manager can take remedial steps if there is
any deviation from budgeted figures.
Serves as a control device. The financial position of the enterprises.
Indicate the causes for changes in working capital.
Helps to identify the various uses of funds.
Inform whether sources of funds are increasing or decreasing.

15.3.1 Limitations
It is only a rearrangement of data appearing in the account books.
Indicates only the past position and not the future.
Indicates movement of funds in a summary form. It does not show various other changes
which take place continuously.
When both the aspects of a transaction are current they are not considered.
When both the aspects of a transaction are not current they are sometimes not included in
this statement.
It is not ideal tool for financial analysis

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15.3.2 Preparation of Fund Flow Statement


There is no legally prescribed form for a funds flow statement, but it requires the preparation of
three statements.
Statement of changes in working capital
Fund flow statement
Statement showing operating profit
Cash/ Fund flow in Tally
In gateway of Tally > display > cash/fund flow >cash flow or fund flow

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Lesson: 16 System Administrator and Other Utilities


16.1 Consolidation of Accounts
Consolidation of group accounts is often a mandatory requirement. Account of different companies
belonging to the same management or owners are required to be consolidated to present the financial
position of the group companies as a whole. Shareholders are entitled to know the performance of the
group as whole, as well as performance of individual constituent companies can be consolidated or
kept separate.
To achieve this, you will have to first create a group company which contains the accounts of member
companies.

Create a Group Company


A group can be created only for companies that have been loaded. To achieve the group company
feature, a minimum of two companies have to be loaded.
This feature can be opened by pressing Alt+F3 > create group company is activated.
Limitations:
Transactions cannot be entered in Group Company.
The group company will give the summary level consolidation and not transaction level
consolidation. Therefore no merging of voucher is possible.
The member companies of a group company should have the same formal name and base
currency symbol.
A group company can be a member of another group company.

16.2 Split Company Data


Tallys period less accounting permits you to enter data for any number of financial years. However,
the presence of old data loads the system and slows processing speed. Splitting financial data over
financial years helps you to retain the benefit of recording the data, while maintaining a highly
responsive system.
When data is split
New companies are created for the respective split periods.
Full data is retained in the original company.
Important Pre-Split Activity: Before splitting data ensure that
All unadjusted forex gains/losses have been fully adjusted by Journal entries. Verify that the
item does not appear in the balance sheet.
There is no purchase bill/sales bill pending entries. Check the profit and loss account and
inventory statements for purchase/ sales bills pending. The pending bills have to be
accounted to the respective party accounts or entered in the respective Bills Pending
account.
Ensure that a backup of data exists.
o To Split company data > Gateway of Tally > alt+F3 > Split company data.

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16.3 Export and Import of Data


16.3.1Export of Data:
Export of data is a feature provided for a better presentation of summaries and statements/ reports
such as trial balance, stock summary and so on. The important feature of this is to export data to a
spreadsheet and recognize it for statutory presentation. The formats available for Exports are:
ASCII (Comma delimited): This is in plain text format, where data is separated by commas and it
does not have any special formatting or fonts. This is the most common e-mail format as all mail
programs recognize it. ASCII data can be easily worked upon by other programs.
HTML (Web Publishing): HTML (hyper text markup language) is the language used for
publishing hypertext on the World Wide Web. Reports retain their formatting and fonts and can be
read by any HTML enabled mail program and even by the internet explorer.
XML (Data Interchange): Extensible markup language is an extension of HTML through the data
is capable of being imported by other XML aware system. This language is fast emerging as the
de-facto standard for information exchange all over the world.
Purpose of Exporting Data
To re-import into another company run on tally.
To export into other applications.
Export masters
Go to Gateway of Tally> Display> List of Accounts> Click Export.
The fields and their description with actions to be taken are given in the following table.
FILED
ACTION
Language: In this field, select the Select Restricted (ASCLL ONLY)
required file format.
Format: In this field, select required file Select XML (data interchange)
format.
Output File Name: In this field, define Retain the system defined default
the file name with extension and path.
Master.xml
Type of Master: In this field, select any Select Ledgers.
from the list of type of masters displayed.
Accept the setting to export data.

16.2 Import of Data


Import Masters
The following steps are involved in this process.
Go to Gateway of Tally.
Shut Syscon Computers Ltd. and load Syscon Telecom Services.
Select Import of Data from Gateway of Tally.
Select Master from Import of Data screen.
The action to be taken for field and their descriptions are given in the following table.
FIELD
ACTION
Import File Name (XML): In this field, type the name and path of Type Master.xml
the file that needs to be import.
Treatment of entries already existing: In this field, select one of Select Modify with
the behaviors from the list displayed.
New Data
Accept the settings to import data.
View the list of accounts to verify the data imported.

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16.3 ODBC Compliance


Tally used ODBC to connect to other programs and exchange data dynamically. ODBC (open
database connectivity) compliance allows other programs to use data from Tally directly. Thus any
program such as Ms-EXCEL or Oracle, which is ODBC compliant, can use data from Tally. Data
Connectivity is dynamic, which means that any update in Tally as reflected in other ODBC compliant
software, in real time. You can also extract data from Tally and design your own report formats in
other ODBC compliance software.
16.3.1 Using ODBC in Tally
To import into an Excel sheet from Tally:
Start tally and select a company. Ensure that Tally is running and minimized.
Start Ms-Excel > click Data menu > from Other sources > select from Microsoft Query

Choose data source window opens, which displays a list of data sources from which the data can
be imported. Select Tally ODBC_9000 from the list of data sources. You can create a new data
source if required, by clicking the option <new data source>.
A query wizard dialogue window opens. Double click Leger in the list of available tables and
columns displayed.
Select ledgers and include them in the Columns in your query window.
On clicking next, the filter data dialogue window displays. Click next without making any
modifications. The next step is to define an order to sort the data that would be imported into the
Excel Sheet.

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Once the sort order is defined, the query wizard reaches its completion and provides options to
proceed with the import of data on the inputs defined in the query wizard. Select Return data to
Microsoft excel and click finish. The query wizard can be saved for future use.

A final dialogue box displays querying the destination where the data should be placed. You can
import data into the existing worksheet or a new worksheet.
To view the Effect of updating
If you create a new ledger in Tally, than excel sheet can also be updated on clicking Refresh all
button.

16.4 Multilingual Capacity of Tally


The multilingual function is the facility to use more than one language in an application, while
presenting, recording or retrieving information. Tally supports the following nine Indian languages
and Hinglish (Coloquital Hindi).
 Hindi
 Gurumukhi (Punjabi)
 Gujarati

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 Tamil
 Kannada
 Malayalam
 Marathi
 Bengali
 Telugu
You can maintain your accounts in any one of the above Indian language and view the reports in any
other language supported by Tally. The script of data and the interface of tally changes on selecting a
language.
Using Tallys Multilingual Feature
Tally has the following salient features:
Offers concurrent multilingual support.
Allows dynamic selection of scripts.
Supports data input in the language of the users choice.
Has easy to use keyboard layout which are in script as well as phonetic.
Supports user interface in about eleven languages inclusive of English.
Provides the facility to switch to multilingual user interface quickly.
Has inbuilt dictionaries to provide appropriate language conversion during runtime.
Allows you to display and print bills, vouchers, invoices, receipts, reports and ledgers in the
language of your choice.
Generate MIS reports.
Allows you to cut or copy multilingual text from other applications such as Microsoft Word,
WordPad, Instant messenger, Outlook Express. Press ctrl+c to copy and ctrl+alt+V to paste in
tally.
Tallys interface for different languages
Tally allows you to change the interface and also create a company and maintain data in languages
other than English. Go to Gateway of Tally > press Alt + L > select Hindi from language
configuration.

Lesson: 17 Display and Report


Introductions
Reports generations is a powerful tool in tally which puts the user in charges of his business
information .the display of information entered in Tally helps the user to
Prepare his financial statement based on the voucher entered to date.
Present strategic information in a manner that would aid his decision-making and control.
Tally reports are generated in real-time and the user has infinite options to display the information in
the he requires
Gateway of Tally
1) Balances Sheet
2) Profit & Loss A/c
3) Stock Summary
4) Display

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i) Trial Balances
ii) Day Boo
iii) Accounts Books
A) Cash/Bank Books
B) Ledger
C) Group summary
D) Group voucher
E) Sales Register
F) Parched Register
G) Journal Register
IV) Statement of Accounts
A) Outstanding
B) Interest Calculations
C) Cost Center
D) Statistics
v) Inventory Books
A) Stock Item
VI) Statutory Info
A) Vat Classifications
Vii) Statutory Report
A) Vat Reports
B) CST Reports
viii) Cash/Funds flow
ix) List of Accounts
x) Exceptions Reports

Accounting Reports
1) Balance sheet:
A Balance sheet is financial statement that indicates the financial health or net worth of a
company at any given point .It lists the assets and liabilities of a company.
The balance sheet in tally displays the information entered in the default primary groups .It is
updated in real time with every transaction/Voucher which is entered and save .No special
processing is required to produces a balance sheet in tally

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To view the balance sheet of company, BIT,


Go to Gateway of tally >Balance sheet
Click Alt +F1 details for a detailed view of the balance sheet

The balance sheet can be viewed using the following


F12 configure
Auto column
New Column
For a vertical view of the balance sheet
Click F12: Configure and set show vertical Balance sheet it yes

The balances sheet screen display as shown

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Use Alt + F1 to toggle between condensed and detailed mode


Use Alt + P to print the balance sheet
Click Alt + N auto column in condensed mode on the balance sheet screen .select half-yearly from
the column details menu

The balance sheet with half yearly and annually details displayed as shown

2) Profit and Loss accounts


The profit and loss accounts is financial stalemates that describes the operational results of the
company or its earning capacity for a given period. It lists the companys income and expenditure. The
profit and loss accounts in the tally displays the information based on the default primary groups its
updated instantly with every transactions/voucher which is entered and saved .No special
processing is required to productions a profit and loss accounts of BIT ,
Go Gateway of tally >Profit & Loss Accounts
Click Alt +F1: Details to view the detailed profit & loss accounts

3) Accounts Book
Book of accounts :Books of accounts record the individual which you have entered .Though The Item
are posted to different ledgers .Tally brings together all the transactions of one category into a book of
accounts for viewing and printing .For expels ,The cash book records all the transactions which affect
cash

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Cash/Bank Books:
To view the cash/bank summary.
Go to Gateway of tally >display >Accounts Books >cash/Bank Book

4) Sales Register
Sales register displayed the monthly summary of sales made
To view sales register
Go to Gateway of tally >displayed >Accounts Books >sales Register
Different ways to view sales register
Use F12; Configure to alter the sales register configurations setting and observe the different ways a
sales register can be viewed
To view sales registers summary on quarterly basis on Alt +F5 quarterly
To
o go to other voucher types from sales registers click on F4: voucher type
To view sales voucher registers in a columnar from,
G to gateway of tally >Display >Accounts book >sales Register>Select
Register>Select month voucher register >F5
>F5:
columnar

Click Alt +F1 details

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5) Purchase Register
Purchase register displays the monthly summary of all purchases made to view purchased register
Go to Gateway of tally >display >accounts Books >purchase Register
To view purchase Register summary on quarterly basis on Alt +F5 quarterly
To go to other voucher types from purchase Register click on F4: voucher type
To view purchase voucher Register in a columnar from,
G to gateway of tally >Display >Accounts book > purchase Register >Select month voucher register
>F5: columnar

6) Statement of Accounts
The tally, Display of statement of accounts pertains to cost center and outstanding analysis. There are
divide from individual transactions but are not statutory requirement.
7) Cost center
Cost Centers reports are primarily performances

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To access coat center reports,


Go to Gateway of tally >Display Statement of Accounts >Cost centers>Cost center break up
Ledger Break-up
Ledger break-up in another view of cost center report .It enables the user to analyses the distributions
of ledger accounts amongst different cost center
To view ledger break-up
Go to Gateway of tally >Display >Statement of accounts Cost center >Ledger Break-up
Select a ledger from the list of ledgers for example, select salary exp and press Enter to view cost
break-up of ledger

8) Outstanding:
Receivable and payable are two important components of any firms working capital. Receivables are
a parts of current whereas payable are a [art of current liabilities .Each influences the short-term
liquidity and financing of the company and effective control of both is necessary for the finical health
of the firm .Tally provides many reports and analysis and to aid credit control

Receivables
Receivables are amounts which are outstanding from debtors
To view receivables
Go to Gateway of Tally >Display >Statement of Accounts >Outstanding> Receivables
The reports give an invoice By-Invoices outstanding for all receivables as on the current date. This
report takes into considerations only those accounts that have bill-by-bill options activated

Payables
Payables are amounts which are outstanding to creditors
To view Payables
Go to Gateway of Tally >Display >Statement of Accounts >Outstanding>Payables
F4: Receivables in the payable screen switches to the receivable reports likewise, in the receivables
screen, F4 Payables button is available to switch to payables reports.

9) Interest Calculations:
In Tally, Interest is automatically calculated if Active interest calculations and use advanced
parameters features are active in tally F11: Features and the related parameters are set as required
for individual ledger accounts.
There are the types of interest calculations
Interest on loans and deposits.
Interest on overdue receivables /Payable.

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To view interest calculations statement


Go to Gateway of tally >Displayed>Statement Accounts > interest Calculations
User can opt to view interest receivable, interest payable interest ledger-wise or interest group-wise
Gateway of tally >Displayed>Statement Accounts > interest Calculations>Ledger selected company

Statutory Masters
VAT Classifications
VAT Classification is a list of VAT rates, which describes the nature of the business activity and the
type of transaction. These are in-built into the system and will be updated if and when any statutory
changes take place. Some of the classifications are:
Input VAT @4%
Input VAT@ 1%
Input VAT @12.5%
Input VAT @1%
Input VAT @4%
Input VAT @12.5%
Purchases Capital Goods
Purchases Exempt
Purchases from unregistered dealers
Go to Gateway of Tally>Display> Statutory Info> VAT Classifications

10) Statutory Reports


1. VAT Reports
VAT Computation
VAT computation report is based on VAT classification and displays the net VAT position for the given
period.
To view VAT computation report Go to Gateway of Tally > Display >Statutory Reports >VAT
Computation.
VAT returns are to be filed in the forms prescribed by each state. The form discussed here is From
100, which is the VAT form for Karnataka. Tally enables printing of VAT form in the specified format.
To view the VAT form,
VAT returns are to be filed in the forms prescribed by each state. The form discussed here is From
100, which is the VAT form for Karnataka. Tally enables printing of VAT form in the specified format.
To view the VAT form,
Click With Preview button to view the VAT form before taking a print copy.
Press ALT+Z to view an enlarged version of the VAT form.
2. CST Reports

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CST Reports display forms to be received and issued. Use Tally to track pending forms and
reconcile forms.
To view CST Reports,
Go to Gateway of Tally >Display > Statutory Reports> CST Reports
The menu displays
Form Receivable.
Form Issuable.
Form Issuable.
Form Receivable
Go to Gateway of Tally > Display >Statutory Reports >CST Reports >Form Receivable> Ledger

Select a CST party ledger from the List of Ledgers. For example, select Mumbai State Trading
Corporation.
Forms to be received for the selected ledger are displayed in the Forms Receivable screen.
Enter the Form Number and Data forms received.

11) Day Book


Range Features
Display and reports in Tally can be customized as per user requirements using filters. This filter
can scan through the range of information provided and give a precise summary of the
information that the user is looking for.
To view customized day book,

Go to Gateway of Tally > Display >Day Book


Click on F2: Period to change period. From : 1-4-2006 and To: 31-3-2007
Specified.

12) Exception Reports


Optional Vouchers
Optional voucher is not a separate voucher type. It is a non accounting voucher which is typically
used when transaction has not been completed, the user does not want it to affect the accounts. An
existing voucher, (for example, a payment voucher or a receipt voucher can be marked as optional.
This voucher does not get posted anywhere but remains in the optional voucher register. At a later
date, it can be regularize and recorded by modifying the voucher to remove the optional mark. To
designate any voucher type as optional
Activate Use Reverse Journals and Optional Vouchers in Features >
Accounting
Features.
Go to Gateway of Tally >Display > Day Book
Click on F2: Period to change period. From: 1-4-2006 To31-3-2007
Select vouchers dated 1-4-2006 and 5-4-2006
Mark them optional by pressing CTRL+L or click on the optional button and accept them, View the
balance sheet to see the effect of marking two vouchers as optional vouchers.

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Go to Gateway of Tally >Display >Exception Reports >Optional Vouchers.


Once all optional vouchers are regularized, the list of optional vouchers will be empty.
To regularize the vouchers
Go to Gateway of Tally > Display >Day Book
Select vouchers dated 1-4-2006 and 5-4-2006.
Regularize them by pressing CTRL+; or click on the regular button.

13) Inventory Reports


Tally prepares inventory reports based on the vouchers enter till date the appearance of reports can
be customized to a users need. For example, to make comparisons between different companies,
periods of the financial year and so on. Inventory operates in exactly the same way as accounting
regarding displaying, modifying and printing of reports.

1. Stock summary
Stock Summary is a statement of stock in hand on a particular date. The statement is updated with
every transaction to provide stock position at any given time.
Tally treats stock summary as one of the primary statements and makes it accessible directly from
Gateway of Tally. As with all Tally reports, it can be drilled down and configured to view different
details, as well as total flow of stock.
To view stock summary.

2. Inventory Books
Stock Item
Stock item summary is a statement which displays the inwards, outwards and the closing balance
details of a selected stock item summary
Go to Gateway of Tally > Display > Inventory Books > Stock Item
Select a stock item from the list of items. For example, select High Capacity Stabilizers.

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