Accounting Package 1

Accounting:

“Accounting is an art of classification, summarization and analysis of all

the transactions being done by a business house in a financial year”
Or
“Keeping a track record of all the transactions done by a business
organization in a financial year; date wise, serially and in proper format is
called as Accounting”.

Accounting is the language of business because it is through accounting

that various monetary matters related with business are communicated.
Hence, accounting is now considered as an information system which aids
business and it‟s users in taking economic decisions.

Meaning of Double Entry System:

Every business transaction has two major aspects i.e., Debit and Credit. A
system of accounting in which both the aspects of each transaction are
recorded as per prescribed rules is called double entry system.

Double Entry System is a “A system of accounting in which out of the two

aspects of a transaction, one aspect is “Debited” and the other aspect is
“Credited” according to certain prescribed rules.”

Concept of Debit and Credit:

In any business transaction, at least two parties (accounts) are required.
In general terms if one party is considered as giver then surely the other
party is considered to be as receiver or accepter. For accepter, the sum or
value by which the transaction took place; is a liability whereas the same
value is an asset for the giver.
Therefore, the giver is now known as Credit account and the receiver as
Debit account.

Meaning of Debit:
The word Debit has been derived from the Latin word „debitum‟, which
means „due for that‟. In fact, debit is a symbol of accounting, which is
used to make the rules of accounting clear and operative.

Meaning of credit:
The word credit has been derived from Latin word „creder‟, which means
„due to that‟. It is also used as a symbol in accounting which is used to
make the rules of accounting clear and operative.
Let us make it clear with an example;

1- Raj & Company pays Rs. 2000.00 cash to Priya.

In this example Raj & Company is „Giver‟ and hence it is considered to
be as “Credit Account”, whereas Priya is considered as “Debit
account”
2- Priya returns Rs. 2000.00 to Raj & Company.
In this example Priya is „Giver‟ and hence it is considered as “Credit
Account”, whereas Raj & Company is considered as “Debit
account”.
Accounting Package 2

Accounts:
Transaction of a similar nature when recorded at one place is known as
accounts. In other words, a summary of relevant business transactions
and events recorded at one place relating to a particular head is called an
Account and the entire group of accounts is called a ledger.

Types of Accounts

Personal Accounts Real accounts Nominal Accounts

(Individuals, Firms, (Assets-Such as Cash, (Expenses & Losses,
Companies, Banks, Land & Building, Incomes & Gains)
Corporations, Statutory, Goodwill, etc)
Authorities etc. )

Personal Accounts:
The accounts which are related with real persons, artificial persons and
representative persons are called personal accounts.

Real Account:
Real accounts are of two types i.e. Tangible Real accounts and Intangible
Real accounts. Building, Furniture, Cash, Machinery etc. are examples of
tangible real accounts because these can be seen, touched and felt and
they have a physical existence. There are some intangible real accounts;
which cannot be touched because they have no physical shape such as
Trademark, Goodwill and Patent etc.

Nominal Accounts:
Every businessman has to incur some expanses and he makes some
income also. Some name is given to the head under which these expenses
and incomes are recorded.

Rules of Accounting:
1- Debit what comes in and Credit what goes out.
2- Debit the Receiver and Credit the Giver.
3- All Expanses & Losses are Debited and all Incomes & Gains are
Credited.

Classification of Accounts based on Accounting Equation:

Accounts Related with capital
Accounts Related with Assets
Accounts Related with Liabilities
Accounts Related with Revenues
Accounts Related with Expenses
Accounting Package 3

Accounts Related with Expenses are further classified into two categories:

Direct Expenses:
Those expenses which are incurred in manufacturing of goods or in
bringing the goods at a salable place (shop) are called as Direct Expenses
as these expenses directly affect the value of purchase and have a
tendency to increase the stock value.

Indirect Expenses:
Those expense which are incurred at the time of sales or to promote the
sale or for the proper functioning of the business and which do not affect
the value of purchase (stock) are known as Indirect Expenses. Indirect
Expenses decrease the Net profit of the business.

Ledger:
Ledger is a special books having special format into which accounts are
traditionally kept. This is the main book of account and contains all
accounts needed for preparing financial statements. Therefore, it is also
called as „Book of Principal Entry‟. Transaction is first recorded in journals
and then the record of journal is transferred in another book which is
called Ledger‟. This method of writing from journal to ledger is called
„posting‟.
SJN Pvt. Ltd.
Ledger A/c of: M/S Raj & Company

L. Cr/
Date Particular Debit Credit Balance
F Dr
1-09-10 Sales Bill No. 123 14 2000.00 2000.00 Dr
3-09-10 Sales Bill No. 128 14 3000.00 5000.00 Dr
4-09-10 Receipt Cash 10 2500.00 2500.00 Dr
5-09-10 Receipt Chq. 1234 18 8500.00 6000.00 Cr

Journal:
It is a type of book into which we record the transactions in a form where
one or more account(s) is Debited and against this one or more
account(s) is Credit. After recording the transaction, the entries are
transferred to corresponding ledgers to obtain the balances.

IN THE BOOKS OF SJN Pvt. LTd.

Journal

Date Particular L.F Dr. Cr.

Amount Amount
(Rs.) (Rs.)
01-01- Furniture A/c ………. Dr. 4000.00
2010 Machinery A/c ..…….. Dr. 20000.00
Debtors A/c ……….. Dr. 5000.00
To Capital A/c 20000.00
To B/P A/c 2000.00
To Creditors A/c 7000.00
Accounting Package 4

Day Book:
It is a book in which we record the transaction done by a business house
in a day. It gives us a list of all transactions for a particular day. This can
be termed as the first book for book keeping.

Final Reports:
Though the objectives of accounting can be many but the most important
is to obtain some reports which are required not only by the
owner/partners of the company rather the business organization are
supposed to submit these reports to some government departments.
These reports are called as Final Reports. Some of the final reports are as
following:
Balance Sheet
Trading and Profit & Loss Account
Sales Register
Purchase Register
Outstanding Payable
Outstanding Receivable
Cash Book
Bank Book
Bank Reconciliation Statement
Stock summary
Etc.

Balance Sheet:
Balance Sheet is a statement which represents financial position of a
business at a prescribed date. This prescribed date is the date at which
final accounts are prepared. Some persons are of the view that Balance
Sheet is a statement of assets and liabilities of a business at a particular
date. It is a sheet of balance, which means that at the end of the year all
the accounts of the ledger are closed and the balances of nominal
accounts are transferred to Trading Account or Profit & Loss Account but
there are personal and real accounts whose balances are carried forward;
these balances are recorded in a statement which are called Balance
Sheet.

Trading Account:
This account is prepared to find out gross profit or gross loss on the basis
of purchases and sales. From the sales of a specific period (mostly one
year), the cost of sales (of the same period) is deducted and the balances
is treated as gross profit.

Profit & Loss Account:

Profit & Loss account is prepared to find out net profit or net loss. All
those expenses and losses, incomes and gains not recorded in Trading
Account are recorded in Profit & Loss Account. These expenses are termed
as indirect expenses, because these expenses are directly not related with
the acquisition (bringing the goods in shop) and to bring them to saleable
form. If the total of its credit side is more than debit side, excess is called
Net Profit and if total of its debit side is more than its credit side, excess is
called Net Loss.
Accounting Package 5

Ratio Analysis:
The Ratio Analysis Statement is a Single Sheet Performance Report for a
selected period. It gives important values and key performance indicators
for the company. It is one report that top management need to look at to
know the state of the company's financial health and where it is going in
the short term. All the future planning to run the business is taken into
consideration by analyzing this report.

Some key analysis is given to facilitate you. However this analysis is not
the only factor for proper planning. There are some other factors too;
which are taken into consideration while planning a business such as
market position, current financial status of the company, government
policy, availability of raw materials, cost and availability of labour etc.

S. No. Ratio Analysis

1 Working Capital
(Current Assets-Current Liabilities)
2 Current Ratio
(Current Assets : Current Liabilities)
3 Quick Ratio
(Current Assets-Stock-in-hand : Current Liabilities)
4 Debt/Equity Ratio
(Loans (Liability) : Capital Account + Nett Profit)
5 Return on Investment %
(Nett Profit / Capital Account + Nett Profit )
6 Return on Wkg. Capital %
(Nett Profit / Working Capital) %
7 Wkg. Capital Turnover
(Sales Accounts / Working Capital)
8 Inventory Turnover
(Sales Accounts / Closing Stock)
9 Operating Cost %
(as percentage of Sales Accounts)
10 Recv. Turnover in days
(payment performance of Debtors)

Adjustments:
All such transactions which relates with the current financial year, but
they are not included in Trial Balance because there was no record for
them in the books of accounts, are treated as adjustments. Such
transactions are also treated as adjustments which have been recorded
and appear in Trial balance but do not belong to the current financial year.

Accounting for Adjustments:

In connection with adjustments, journal entries are made. Such entries
are called adjusting entries for adjustments. On account of accounting
record of adjustments the balances of certain account are affected and
some new accounts are opened.

Amended Trial Balance:

Due to adjusting entries, changes in balances of various accounts are
made and some new accounts are opened. Hence an amended Trial
Accounting Package 6

balance is prepared and final accounts are prepared on the basis of such
amended trial balance.

Some Important Adjustments:

1. Depreciation, 2. Bad and Doubtful Debts and Discounts &
provisions relating to them, 3. Outstanding expenses, 4. Prepaid
Expenses, 5. Earned Income, 6. Unearned Income and amount
received in advance, 7. Interest on Capital, 8. Interest on Drawings, 9.
Deferred revenue expenditure, 10. Loss of goods by fire, 11. Closing
Stock, 12. Interest on Loans, 13. Charity and samples, 14. Withdrawal of
goods for personal use, 15. Commission to manager on net profit, 16.
Invoice not received for goods purchased, 17. Sale of goods on sale or
returnable condition, 18. Goods in transit, 19. Salaries less tax, 20. Wages
less tax, 21. Rent less tax, 22. Interest less tax, 23. Dishonors of bill
received from debtors, 24. Outstanding Expenses, 25. Expense stock,
26. Accrued Income, 27. Profit on join venture .

Depreciation:
The goods and services provided to the customers are obtained through
the utilization of Fixed Assets during the operation process for a number
of continuous accounting periods. As fixed assets used to generate
periodic revenue, hence an appropriate amount of cost related to the fixed
assets should be changed as an expense against the revenue generated
by the use of fixed asset. The portion of the cost of fixed assets changed
to profit & Loss accounts during a particular accounting period is termed
as depreciation.
The imaginary loss in the value of fixed assets at the end of the financial
year is called as depreciation. Depreciation can be considered as Expenses
Indirect.
Voucher Entry
Journal Voucher Date: 31-3-2010
Debit Credit
By Depreciation A/c 5000.00
To Furniture & Fixture A/c 5000.00
Being depreciation on fixed assets adjusted.

Appreciation:
The goods and services provided to the customers are obtained through
the utilization of Fixed Assets during the operation process for a number
of continuous accounting periods. The value of some fixed assets may
increase during the period which may result as gain. The portion of the
cost of fixed assets changed to profit & Loss accounts during a particular
accounting period is termed as appreciation.
The increase in the value of fixed assets at the end of the financial year is
called as appreciation. Appreciation can be considered as Incomes
Indirect.
Voucher Entry
Journal Voucher Date: 31-3-2010
Debit Credit
By Land & Building A/c 50000.00
To Appreciation A/c 50000.00
Being appreciation on fixed assets adjusted.
Accounting Package 7

Prepaid Expenses:
If expenses of next financial year are paid during current financial year as
advance, then such expenses are known as Prepaid Expenses or expenses
paid in advance. Prepaid is considered as Current assets.

Voucher Entry (payment in prepaid expenses)

Payment Voucher Date: 24-3-2010
Debit Credit
By Prepaid Rent A/c 3000.00
To Rent A/c 3000.00
Being prepaid rent paid.

Voucher Entry (adjustment of prepaid expenses)

Journal Voucher Date: 10-4-2011
Debit Credit
By Rent A/c 3000.00
To Prepaid Rent A/c 3000.00
Being prepaid rent adjusted.

Accrued Incomes:
If incomes during current financial year are to be received in next financial
year, then such incomes are known as Accrued Incomes. Accrued Incomes
are considered as Current Assets.

Voucher Entry
Journal Voucher Date: 19-3-2010
Debit Credit
By Accrued Commission A/c 1000.00
To Commission Receivable A/c 1000.00
Being commission accrued.

Voucher Entry (receipt of accrued incomes)

Receipt Voucher Date: 14-4-2011
Debit Credit
To Accrued Commission A/c 1000.00
By Cash A/c 1000.00
Being accrued commission received.

Outstanding Expenses:
If some expenses during current financial year are not paid in the current
financial year and are to be paid in next financial year, then such
expenses are known as Outstanding Expenses. Outstanding Expenses are
considered as Current Liabilities.

Voucher Entry
Journal Voucher Date: 31-3-2010
Debit Credit
By Wages Inward A/c 6000.00
To Outstanding Wages A/c 6000.00
Being wages inward outstanding.
Accounting Package 8

Voucher Entry (payment in prepaid expenses)

Payment Voucher Date: 24-4-2011
Debit Credit
By Outstanding Wages A/c 6000.00
To Union Bank of India A/c 6000.00
Chq. No. 345252 dt. 23.4.09. Being outstanding wages paid.

Unearned Expenses:
If a business receives advance income up to the end of the current year
for which services will be rendered in the next financial year, then such
incomes are called as Unearned Incomes or Income Received in Advance.
Unearned Incomes are considered as Current Assets.

Voucher Entry (receipt of unearned incomes)

Receipt Voucher Date: 28-3-2010
Debit Credit
To Unearned Incentive A/c 10000.00
By Cash A/c 10000.00
Being unearned incentive received.

Voucher Entry (adjustment of unearned income)

Journal Voucher Date: 23-4-2011
Debit Credit
By Unearned incentive A/c 10000.00
To Incentive Receivable A/c 10000.00
Being unearned incentive adjusted.

Opening Balance & Closing Balance:

For a business, the balances of all the accounts (debit or credit) as on 31st
March is called as Closing Balance. The same balance is carried forward in
next financial year. This carried forward balance of each and every one
account is now termed as Opening Balance on 1st April. To prepare
accounts for next financial year all the opening balances should be
entered very carefully otherwise there will be a difference in the opening
balance and this will severely affect the accounting.

Calculation of Closing Stock:

Calculation of closing stock with the help of given data (considering goods
were sold on inclusive 20% gross profit)
Opening Stock 100000.00
Purchase 500000.00
Direct Expenses 20000.00
Sales 480000.00
Solution:
Calculation of Gross Profit = (Sales X % G.P)/ (100+%G.P)
= (480000.00 X 20)/ (100+20)
= Rs. 80000.00
Cost of Sales = Sales – Gross Profit
= 480000.00 – 80000.00
= Rs. 400000.00
Accounting Package 9

Closing Stock = (Opening Stock+Purchase+Dir. Exp.) – Cost of Sales

= (100000.00+500000.00+20000.00) – 400000.00
= Rs. 220000.00
Accounting Package 10

Tally 9.0
Tally is an accounting software which is fit for all type of business and
organizational accounting. This software is based on double entry Indian
accounting system.
So far we have many versions of Tally viz. Tally 4.0, Tally 4.5, Tally 5.4,
Tally 6.3, Tally 7.2, Tally 8.1, Tally 9.0 and Tally.ERP. Apart from different
versions of Tally we have Single User and Multi User (Network Support
Tally) versions of Tally. We can install the most appropriate version of our
choice.
Tally versions starting from tally 5.4 to Tally 9.0 provide us a facility to
maintain accounts in mainly two ways i.e. Accounts Only and Accounts
with Inventory. The older versions of Tally require DOS as platform
whereas the newer versions (Tally 5.4 onwards) require Windows as
platform.

Starting Tally:
Though we can start Tally by simply double clicking on its icon on
Desktop, but for beginners to start Tally, follow the steps:
Start  All Program  Tally 9.0
Accounting in Tally is as simple as counting 123. The accounting job can
be done in following steps.
1. Company creation
2. Ledger creation
3. Group creation if required
4. Unit of Measures creation
5. Stock Groups creation
6. Stock Items creation
7. Voucher entry of all the transactions

Rest all the jobs are done by Tally and Tally generates all types of reports
such as Balance Sheet, Profit & Loss Account, Trading Account, Trial
Balance, Stock Summery, Outstanding etc.
As we start Tally, the very first screen we get is called as “Company Info”
screen. In this screen we get some options such as Select, Create,
Backup, Restore and Quit.

Home Screen of Tally (Company Info)

The very first Screen which appears as we open Tally.
Accounting Package 11

We can directly start accounting by selecting the companies from the list
or we can create new company if we want to start accounting for a new
company. To create a new company we have to select and activate
“Create Company” option. Select create company option and press Enter
and a screen as shown below will appear. In this screen first of all type
the correct path of the data director (however the by default data
directory is already present there as “C:\Tally\Data”. After setting the
directory, enter the different desired fields‟ viz. Name, Mailing Address
etc. It is important that while entering data into fields take care about
Statutory Compliance, Method of Accounting, Financial Year and Books
Beginning From. After entering the fields check it thoroughly and if you
find it correct in all respect; finally press enter to accept. Company will be
created and it will be now shown in the list of the present companies.

Company creation screen

To open a company for accounting, select your company and press Enter.
Your company will be opened and is ready for accounting. In case, to alter
any information related to company, we can “Alter” the company and
enter the information and then finally accept. To alter the company at any
instance, press Alt+F3. Select company screen appears as shown below.

Options in
Company Info.
Select company screen with list of the companies.
 Accounting Package 12

The workable screen which appears is known as “Gateway of Tally”

screen. In this screen we get different options for different tasks. The first
After company creation and opening the same our task is to create
Ledgers A/c for all the accounts which transacts with our company.

Gateway of tally screen

Ledger:
Ledger refers to account which makes transactions with a company. In-
fact it‟s a format into which we keep a record of all the transaction done
by a company with some other company, organization, firm, person or
any income or expenses head of the same company date wise, serially
and in proper format.
For Ledger creation follow the steps as give below.
Gateway of Tally Accounts Info Ledger Create (You can select
single or multiple creation options depending upon the case).
Note: If more than one ledger of same group is to be created, the multiple
ledger creation should be used, though in multiple ledger creation we can
not enter all the requisite information.

Gateway of TallyAccounts Info.

Gateway of TallyAccountsLedger  Create (Ledger

Creation)

Gateway of TallyAccountsLedger
 Accounting Package 13

While creating some different types of ledgers (viz. Purchase, Sales, and
Taxation etc. according to VAT) we have to enable some features through
“Company Features” by pressing F11. We get three features namely
“Accounting Features”‟ “Inventory Features” & “Statutory Features"
through which we can enable desired utilities for accounting, inventory
and statutory. e.g. VAT, Service Tax, Excise, Debit/ Credit Notes,
Integrate Accounts with inventory, Separate discount columns, Multiple
Godown, Actual & Billed quantities etc. are to be enabled to maintain the
accounting accurately in all respect.

Gateway of Tally  (F11)

Company Features
Gateway of Tally  (F11) Company Features  Accounting
Features (F1)

Gateway of Tally  (F11) Company Features

 Inventory Features (F2) Gateway of Tally  (F11) Company
Features  Statutory & Taxation (F3)

While creating a Ledger A/c, we have to provide its name and then its
group (A group is a classification of Ledger already available with Tally
e.g. Sundry Creditors, Sundry Debtors, Expenses Indirect etc.). In some
special case of Ledgers we have to provide some additional information
which is given as under to facilitate you:
Ledger Name: Purchase @ 4%
Under: Purchase Accounts
Inventory Value effected: YES
Maintain Bill By Bill: YES/NO
Used in Vat Return: YES
VAT/TAX Class: Purchase @ 4%
Accounting Package 14

Ledger Name: Sales @ 4%

Under: Sales Accounts
Inventory Value effected: YES
Maintain Bill By Bill: YES/NO
Used in Vat Return: YES
VAT/TAX Class: Sales @ 4%

Ledger Name: Input VAT@ 4%

Under: Duties & taxes
Type of Duty/Tax: VAT
VAT/TAX Class: Input VAT @ 4%

Ledger Name: Output VAT@ 4%

Under: Duties & taxes
Type of Duty/Tax: VAT
VAT/TAX Class: Output VAT @ 4%

VAT (Value Added Tax)

Currently in our country almost all the states follow new system of
taxation of sales called VAT or Value Added Tax. In this system, local
sales tax is levied on each and every sale whereas previously it was levied
on entry or exit point only. We have different percentage rate of VAT for
different commodities. 1%, 4% & 12.5% are the rates which are generally
applied.
The VAT paid at the time of purchase is called as INPUT VAT and the VAT
collected at the time of sales is called as OUTPUT VAT.

Calculation showing VAT:

Party A
Cost 90.00
Profit 10.00
Total 100.00
Vat @ 4% 4.00
Grand Total 104.00 Party B
Cost 104.00
Profit 16.00
Total 120.00
Vat @ 4% 4.80
Grand Total 124.80 Party C
Cost 124.80
Profit 15.20
Total 140.00
Vat @ 4% 5.60
Grand Total 145.60

Consider Party B:
The goods was purchased from Party A, Purchase amount 104.00
Tax paid at the time of purchase (INPUT VAT @4%) 4.00
The goods was sold to Party B, sales amount 124.80
Tax collected at the time of sales (OUTPUT VAT @ 4%) 4.80
 Accounting Package 15

VAT Payable = Output VAT – Input VAT

At the other hand
VAT Receivable = Input VAT – Output VAT
In this example the VAT payable is Rs. 0.80

Ledger creation screen is shown below.

Gateway of TallyAccountsLedger 
Create (Ledger Creation Purchase Account) Gateway of TallyAccountsLedger  Create
(Ledger Creation Input Vat )
Note: As a new company is created, Tally creates two Ledgers Cash A/c
and Profit & Loss A/c by itself.

Group:
As already stated a group is the classification of Ledgers. In Tally we get
almost all required groups, however if in case a new group is required, we
can create the same through “Accounts Info Group Create”.
Though this new group is not altogether a new group rather is a new
name given to any existing group as this group is always put under any
already existing group.

Inventory:
Inventory refers to the maintenance and tracking of stock items. In
inventory maintenance we have to keep a record of all inward, outward
and closing stock along with there quantity, unit, rate and amount.
In Tally first we have to create Units of measure then Stock Groups and
lastly stock items.

To create Units of Measure:

Gateway of Tally  Inventory Info  Units of Measure  Create 
We have to provide Symbol of Unit, its formal name and Number of
Decimal places to be used in Unit. Finally accept the information.

Gateway of Tally Inventory

Gateway of Gateway of Info.
TallyInventory Info TallyInventory Info. Units of Measure  Create
Units of Measure (Unit Creation)
 Accounting Package 16

To create Stock Groups:

Gateway of Tally  Inventory Info  Stock Groups  Create 
We have to provide Name of Stock Group, Under Group, Can Quantities of
items be added  “NO”. Finally accept the information.

Gateway of TallyInventory
Gateway of Info Stock Groups  Create
TallyInventory (Stock Group Creation)
Info Stock Groups

To create Stock Items:

Gateway of Tally  Inventory Info  Stock Items  Create 
We have to provide Name of Stock Items, Under Group, Units. Finally
accept the information.

Gateway of
Gateway of TallyInventory Info Stock Items
TallyInventory Info
 Create (Stock Item Creation)
Stock Items

Business Transaction: During business, a business organization makes

several deals which include sales, purchase, payments, receipts,
adjustment and many others to run the trade. These deals are known as
business transaction.

In Tally we have to pass an entry to track these transactions which is very

similar to journal entry as in the case of manual accountancy. The
platform which is needed to pass the entry in Tally is known as vouchers.
In Tally we have different vouchers for different kind of transactions.

For voucher entry select “Accounting Voucher” option in Gateway of Tally

screen and then press enter. Now the screen will display a voucher.
Typically in a voucher we get Voucher Name and Number, Date, Place to
Accounting Package 17

enter Accounts to be debited and credited along with their amounts. Lastly
we get a place for Narration. When all the fields are entered, press enter
finally. A display will appear seeking your acceptance. Press enter to
accept. One transaction is recorded in Tally and it will affect all the
reports.

Date Change & Period Change:

To change the date of voucher, press F2. A display will appear which will
show the next date. To change the date simply type the new date and
press Enter to accept.
Voucher Function Use of Voucher
Name Keys
Contra F4 For transaction between Cash to Bank, Bank
to Cash, Bank to Bank, Petty Cash to Petty
Cash, Cash to Petty Cash.
Payment F5 For all types of payments through Bank or
Cash
Receipt F6 For all types of Receipt through Bank or Cash
Journal F7 For all types of adjustments.
Sales F8 For all type of Cash and Credit Sales.
Purchase F9 For all type of Cash and Credit Purchase.
Memorandum Alt + F10 For all types of temporary transaction which
is ultimately to be deleted.
Credit Note Ctrl + F8 To Credit any account abnormally/for Sales
Return
Debit Note Ctrl + F8 To Debit any account abnormally/for
Purchase Return
Delivery Note Alt + F8 To provide & record an instrument to deliver
items to the party. Does not effect
accounting, effects inventory
Receipt Note Alt + F9 To receive & record an instrument to receive
items from the party. Does not effect
accounting, effects inventory
Purchase Alt + F4 To provide & record an instrument for
Order confirmation of purchase. Does not effect
accounting or effects inventory
 Accounting Package 18

Sales Order Alt + F5 To provide & record an instrument for

confirmation of sales. Does not effect
accounting or inventory

Note:
1- According to VAT all Purchases are considered as Credit Purchase.
In case of Cash Purchase we have to pass two entries, one for
credit purchase and one for cash payment.

2- According to VAT we have three categories of sales and we have to

issue different instruments for these sales. The instruments are as
followings:

 Sales Invoice (To unregistered dealer or registered dealer

where TIN not available or credit sales to end users)
 Tax Invoice (To registered dealer where TIN is available)
 Cash Memo (For cash sales to end users)

(TIN: Tax Payer‟s Identification Number)

Gateway of Tally Accounts Vouchers  F4 Gateway of Tally Accounts Vouchers  F5

(Contra) (Payment)

Gateway of Tally Accounts Vouchers  Gateway of Tally Accounts Vouchers  F7

F6 (Receipt) (Journal)
 Accounting Package 19

Gateway of Tally Accounts Vouchers  F8 Gateway of Tally Accounts Vouchers 

(Sales) F9 (Purchase)

Gateway of Tally Accounts Vouchers 

Gateway of Tally Accounts Vouchers  Ctrl +
Ctrl + F8 (Credit Note)
F9 (Debit Note)

Gateway of Tally Accounts Vouchers 

Gateway of Tally Accounts Vouchers  Alt
Alt + F4 (Sales Order)
+ F8 (Delivery Note)
 Accounting Package 20

Gateway of Tally Accounts Vouchers  Alt Gateway of Tally Accounts Vouchers  Alt
+ F4 (Purchase Order) + F9 (Receipt Note)

Gateway of Tally Accounts Vouchers  Alt + F10 (Memorandum)

Voucher Entry:
Through voucher entry we record a transaction in Tally. There are two
methods of Voucher entry:

Single Entry Mode

Double Entry Mode

By Default Tally 9.0 gives Single Entry Mode to record a transaction. In

this mode we have to specify an account of our company which is
responsible for the transaction and against this account some other
account to be Debited or Credited, is mentioned along with their amounts.
For Sales and Purchase we get voucher in Invoice Mode. We even can use
Sales Voucher as instrument to be delivered to the customer.
In Double Entry Mode we have to mention accounts to be Debited and
Credited separately along with their amounts. TO/ BY or Cr/ Dr are the
notations provided by Tally for Credit and Debit respectively.
 Accounting Package 21

To customize the voucher entry as per our own requirements and facility
we have to change the configuration. To access voucher configuration,
press F12. A display appears. In this display select and activate “General
“ option. A new display appears, here we can change the settings and can
configure the voucher entry as per our choice.

Gateway of Tally
Company Configuration
Gateway of Tally Accounts Vouchers  (F12)
Voucher Configuration (F12)

Final Reports:
The purpose of accounting is to obtain certain final reports. In Tally all the
reports are generated automatically. All we have to do is to customize
them as per our need. The names of some important final reports are
given as under:
Balance Sheet
Profit & Loss A/c
Stock Summary
Ratio Analysis
To obtain any final report follow the path:
Gateway of Tally  Reports

Balance Sheet
The Balance Sheet gives the state of financial affairs of a company on a
given date. It lists out the Assets and Liabilities based on the Primary
Groups of Tally. The Balance Sheet in Tally is updated instantly with every
transaction voucher that is entered and saved. No special processing is
required to produce a Balance Sheet.
To view the Balance Sheet follow the path:
Gateway of Tally > Balance Sheet

Profit & Loss A/c

The Profit & Loss Account shows the operational results for a given period.
It lists out the Incomes and Expenditures based on the Primary Groups of
Tally. The Profit & Loss Account in Tally is updated instantly with every
transaction voucher that is entered and saved. No special processing is
required to produce a Profit & Loss Account.
 Accounting Package 22

To view the Profit & Loss Account:

Gateway of Tally > Profit & Loss Account

Stock Summary:
Stock Summary is a statement of stock in hand on a particular date. The
statement is updated with every transaction so that it provides current
stock position at any time. The statement can be drilled down as with all
Tally reports, and configured to view different details. Indeed, it is
possible to see the total flow of stock on a single report.
Tally treats Stock Summary as one of the primary statements and makes
it accessible directly from the Gateway of Tally.
To view the Stock Summary follow the path:
Gateway of Tally > Stock Summary

Ratio Analysis:
The Ratio Analysis Statement is a Single Sheet Performance Report for a
selected period. It gives important values and key performance indicators
for the company. It is one report that top management need to look at to
know the state of the company's financial health and where it is going in
the short term.
Gateway of Tally > Ratio Analysis

Tally Forte:
Different kind of display through which we can get
the information regarding accounts, stock, bills
payable, bills receivable, taxation, statement of
accounts etc. are readily available with Tally which
we can access from its “Display Menu”. This display
menu is termed as Tally Forte.
Gateway of Tally  Display (Tally Forte)
Sales Register
Purchase Register
Vat Report
Trial Balance
Cash Book
Day Book Gateway of Tally  Display
Statement Of account (Tally Forte)
Etc.

Gateway of Tally Balance Sheet Gateway of Tally Balance Sheet  Alt + F1

 Accounting Package 23

Gateway of Tally Profit & Loss Gateway of Tally Profit & Loss  Alt + F1

Gateway of Tally  Display  Accounts  Gateway of Tally  Display  Accounts 

Ledger Ledger  Alt + F1
Accounting Package 24

Special Key Combination

Windows Functionality Availability

F1 To select a company At all masters menu screen
To select the Accounts At the Accounting / Inventory
Button and Inventory Voucher creation and alteration
buttons screen
F2 To change the menu period At almost all screens in TALLY
F3 To select the company At almost all screens in TALLY
F4 To select the Contra voucher At Accounting / Inventory
Voucher creation and alteration
screen
F5 To select the Payment At Accounting / Inventory
voucher Voucher creation and alteration
screen
F6 To select the Receipt voucher At Accounting / Inventory
Voucher creation and alteration
screen
F7 To select the Journal voucher At Accounting / Inventory
Voucher creation and alteration
screen
F8 To select the Sales voucher At Accounting / Inventory
Voucher creation and alteration
screen
F8 To select the Credit Note At Accounting / Inventory
(CTRL+F8) voucher Voucher creation and alteration
screen
F9 To select the Purchase At Accounting / Inventory
voucher Voucher creation and alteration
screen
F9 To select the Debit Note At Accounting / Inventory
(CTRL+F9) voucher Voucher creation and alteration
screen
F10 To select the Reversing At Accounting / Inventory
Journal voucher Voucher creation and alteration
screen
F10 To select the Memorandum At Accounting / Inventory
voucher Voucher creation and alteration
screen
F11 To select the Functions and At almost all screens in TALLY
Features screen
F12 To select the Configure At almost all screens in TALLY
screen
ALT + 2 To Duplicate a voucher At List of Vouchers – creates a
voucher similar to the one
where you positioned the cursor
and used this key combination
Accounting Package 25

ALT + A To Add a voucher At List of Vouchers – adds a

voucher after the one where you
positioned the cursor and used
this key combination.

ALT + C To create a master at a At voucher entry and alteration

voucher screen (if it has not screens, at a field where you
been already assigned a have to select a master from a
different function, as in list. If the necessary account
reports like Balance Sheet, has not been created already,
where it adds a new column use this key combination to
to the report) create the master without
quitting from the voucher
screen.

ALT + D To delete a voucher At Voucher and Master (Single)

alteration screens. Masters can
To delete a master
be deleted subject to conditions,
(if it has not been already as explained in the manual.
assigned a different function,
as explained above)

ALT + E To export the report in At all reports screens in TALLY

ASCII, SDF, HTML OR XML
format

ALT + I To insert a voucher At List of Vouchers – inserts a

voucher before the one where
you positioned the cursor and
used this key combination.

ALT + O To upload the report at your At all reports screens in TALLY

website

ALT + M To Email the report At all reports screens in TALLY

ALT + P To print the report At all reports screens in TALLY

ALT + R To remove a line in a report At all reports screens in TALLY

ALT + S To bring back a line you At all reports screens in TALLY

removed using ALT + R

ALT+ V From Invoice screen to bring At Invoice screen à Quantity

Stock Journal screen Field à Press Alt + V to select
the Stock Journal.

ALT + W To view the Tally Web At all reports screens in TALLY

browser.

ALT + X To cancel a voucher in Day At all voucher screens in TALLY

Book/List of Vouchers

ALT + R To Register Tally At Licensing Menu in TALLY

Accounting Package 26

CTRL + A To accept a form – wherever At almost all screens in TALLY,

you use this key except where a specific detail
combination, that screen or has to be given before
report gets accepted as it is. accepting.

CTRL + B To select the Budget At Groups/Ledgers/Cost

Centres/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
Info) creation and alteration
screen
CTRL + C To select the Cost Centre At Groups/Ledgers/Cost
Centres/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
To select the Cost Category Info) creation and alteration
screen

At Stock Groups/ Stock

Categories/ Stock Items/
Reorder Levels/ Godowns/
Voucher Types / Units of
Measure ( Inventory Info)
creation/alteration screen
CTRL+ E To select the Currencies At Groups/Ledgers/Cost
Centres/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
Info) creation and alteration
screen
CTRL + G To select the Group At Groups/Ledgers/Cost
Centres/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
Info) creation and alteration
screen
CTRL + I To select the Stock Items At Stock Group/ Stock
Categories/ Stock Items/
Reorder Levels/ Godowns/
Voucher Types / Units of
Measure ( Inventory Info)
creation/alteration screen

CTRL + L To select the Ledger At Groups/Ledgers/Cost

Centres/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
Info) creation and alteration
screen
Accounting Package 27

CTRL + O To select the Godowns At Stock Group/ Stock

Categories/ Stock Items/
Reorder Levels/ Godowns/
Voucher Types / Units of
Measure ( Inventory Info)
creation/alteration screen

CTRL + Q To abandon a form – At almost all screens in TALLY.

wherever you use this key
combination, it quits that
screen without making any
changes to it.
CTRL + Alt Rewrite data for a Company From Gateway of Tally screen
+R
CTRL + S Allows you to alter Stock At Stock Voucher Report and
Item master Godown Voucher Report

CTRL + U To select the Units At Stock Groups/ Stock

Categories/ Stock Items/
Reorder Levels/ Godowns/
Voucher Types / Units of
Measure ( Inventory Info)
creation/alteration screen

Ctrl + V To select the Voucher Types At Groups/Ledgers/Cost

Centers/
Budgets/Scenarios/Voucher
Types/ Currencies (Accounts
Info) creation and alteration
screen
ALT + F1 To close a company At all the menu screen
To view detailed report At almost all report screen
To explode a line into its At almost all screens in TALLY
details

ALT+ F2 To change the system period At almost all screens in TALLY

ALT + F3 To select the company info At Gateway of Tally screen

menu

To create/alter/shut a
Company
ALT + F4 To select the Purchase Order At Accounting / Inventory
Voucher Type Voucher creation and alteration
screen
Accounting Package 28

ALT + F5 To select the Sales Order At Accounting / Inventory

Voucher Type Voucher creation and alteration
screen
To view monthly and At almost all report screens in
quarterly report TALLY

ALT + F6 To select the Rejection Out At Accounting / Inventory

Voucher Type Voucher creation and alteration
screen
To change the Sales Order
Voucher Type
ALT + F7 To select the Stock Journal At Accounting / Inventory
Voucher Type Voucher creation and alteration
screen
To accept all the Audit lists At Tally Audit Listing screen

ALT+ F8 To select the Delivery Note At Accounting / Inventory

Voucher Type Voucher creation and alteration
screen
To view the Columnar report At Ledger Voucher screen

ALT + F9 To select the Receipt Note At Accounting / Inventory

Voucher Type Voucher creation and alteration
screen

ALT + F10 To select the Physical Stock At Accounting / Inventory

Voucher Type Voucher creation and alteration
screen

ALT + F12 To filter the information At almost all report screens

based on monetary value
CTRL + ALT Advanced Config At Gateway of Tally
+ F12

PgUp Display previous voucher At voucher entry and alteration

during voucher entry/alter screens

PgDn Display next voucher during At voucher entry and alteration

voucher entry/alter screens
Accounting Package 29

ENTER To accept anything you type You have to use this key at
into a field. most areas in TALLY
To accept a voucher or At the receivables report – press
master Enter at a pending bill to get
transactions relating to this bill
To get a report with further
(e.g., original sale bill, receipts
details of an item in a report.
and payments against this bill,
etc)

ESC To remove what you typed At almost all screens in TALLY.

into a field
To come out of a screen
To indicate you do not want
to accept a voucher or
master.

SHIFT + Collapse next level details At Voucher Register screen and

ENTER Trial Balance report

SHIFT + To explode a line into its In almost all Reports:

ENTER details
At a Group/Stock Group/Cost
Category/Godown/Stock
Category – displays Sub Groups
and Ledgers/Stock Items/Cost
Centres/Secondary
Godowns/Secondary Stock
Categories
At a Voucher – displays its
entries and narration
At a Stock Item- displays its
godowns and batch details
At Voucher Register screen –
displays the next level details
At Trial Balance report - displays
the next level details

CTRL + To alter a master while At voucher entry and alteration

ENTER making an entry or viewing a screens
report
At all reports