COMPUTERISED ACCOUNTING SOFTWARE

(TALLY 9.0)

UNDER THE GUIDANCE OF

DR. SWATI NARULA

FACULTY, VIPS

SUBMITTED BY

NAME: SAJAL AGGARWAL

ENROLLMENT NO: 10317788816

COUSRE: BCOM (HONS)3B

INTRODUCTION TO ACCOUNTING
The systematic recording, reporting, and analysis of financial transactions of a business.
It can be defined as a method or system that is used to record and
manage the financial status of an entity such a s business, firm, or individual. It
is the process of keeping and analysing the records of every transaction made
by a business or a firm and preparing financial reports based on the records.

COMPONENTS OF ACCOUNTING

 RECORDING
The primary function of accounting is to make records of all the transactions that the firm
enters into.

 SUMMARIZING

Recording for transactions creates raw data. Pages and pages of raw data are of little use
to an organization for decision making. For this reason, accountants classify data into
categories.

 REPORTING
Reporting is usually done in the form of financial statements. These financial statements
are regulated by government bodies to ensure that there is no misleading financial
reporting.
 ANALYSING
After results have been summarized and reported, meaningful conclusions need to be
drawn.
LIMITATION OF ACCOUNTING

 SUBJECTIVE MEASUREMENT

Accountants have to attach a monetary value to every event or transaction that has taken
place within the organization. Sometimes the monetary value of the transaction is
impossible to be ascertained. Consider the case of depreciation. Accountants can at best
provide estimates of the depreciation that should have taken place given the scale of

operations. However, these estimates are usually way off the mark. This makes
accounting policies open to debate as well as manipulation.

 QUALITATIVE FACTORS

Accountants try to attach a monetary value to everything. The things they cannot attach a
monetary value to are not accounted for! Consider the case of goodwill. Until the
organization has explicitly paid for the goodwill it purchased from another company, it
cannot account for goodwill. According to accountants, the goodwill generated by the
firm internally is worthless. We all know that this is not the case and therefore accounting
is flawed as far as goodwill is concerned.

 UNSTABLE UNIT OF ACCOUNT

Accountants have to measure all transactions in a single unit of account. This unit of
account is usually the currency that is being used in a particular country. However, it is
common knowledge that the value of currencies is not stable. Inflation, deflation and
such other forces make currency values dynamic. When accountants express assets
purchased in last year’s rupees with the same unit as purchased by this year’s rupees, it
presents a distorted image. Many companies have low book values because their assets
were purchased a long time back during periods of no inflation.
IMPORTANT TERMS OF ACCOUNTING

 ASSET ACCOUNTS
These are the different types of economic resources owned or controlled by an entity.
Common examples of asset accounts are cash on hand, cash in bank, real estate,
inventory, prepaid expenses, goodwill, and accounts receivable.[2]
 LIABILITY ACCOUNTS
It represent the different types of economic obligations of an entity, such as accounts
payable, bank loans, bonds payable, and accrued expenses.[3]
 EQUITY ACCOUNTS
It represent the residual equity of an entity (the value of assets after deducting the value
of all liabilities). Equity accounts include common stock, paid-in capital, and retained
earnings. The type and captions used for equity accounts are dependent on the type of
entity.[4]
 REVENUE ACCOUNTS
It represent the company's earnings and common examples include sales, service revenue
and interest income.[5]
 EXPENSE ACCOUNTS
It represent the company's expenditures. Common examples are utilities, rents,
depreciation, interest, and insurance.

 CONTRA-ACCOUNTS
These are accounts with negative balances that offset other balance sheet accounts.
Examples are accumulated depreciation (offset against fixed assets), and the allowance
for bad debts (offset against accounts receivable).
 BALANCE SHEET
It provides a snapshot of a business' assets, liabilities, and equity on a given date.
 BOOKKEEPING
Recording of financial transactions in an accounting system.
 CLOSING THE BOOKS
Closing the Books occurs at the end of the annual period and allows for a start with a
clean book at the beginning of the next year.
 CREDIT
Entered in the right column of accounts. Liability, equity and revenue increase on the
credit side.
 DEBIT
Entered in the left column of accounts. Assets and expenses increase on the debit side.
 DEPRECIATION
The decrease in an asset's value over time.
 FIXED ASSET
Used for a long period of time, e.g. - equipment or buildings.
 LEDGER
Where debit and credit transactions are recorded.
 INVENTORY
Inventory consists of raw materials, work in progress, and finished goods.
 INVOICE
An Invoice shows the amount of money owed for goods or services received.
 JOURNAL
The first place financial transactions are entered. They are entered chronologically.
 LIABILITY
Liabilities are the obligations of an entity, usually financial in nature.
 LIQUID ASSET
Consist of cash and other assets that can be easily converted to cash.
 POSTING
Refers to the recording of ledger entries.
CONCEPTS OF ACCOUNTING
 ACCRUALS CONCEPT

It means revenue and expenses are recorded when they occur and not when the cash is
received or paid out.

 CONSISTENCY CONCEPT

It means once an accounting method has been chosen, that method should be used unless
there is a sound reason to do otherwise.

 GOING CONCERN

It means the business entity for which accounts are being prepared is in
good condition and will continue to be in business in the foreseeable future.

 PRUDENCE CONCEPT

It means revenue and profits are included in the balance sheet only when they are realized
(or there is reasonable 'certainty' of realizing them) but liabilities are included when there
is reasonable 'possibility' of incurring them.

 ACCOUNTING EQUATION

It means total assets equal total liabilities plus owners' equity.

 ACCOUNTING PERIOD

It means financial records pertaining only to a specific period are to be considered in

preparing accounts for that period.

 COST BASIS

It means asset value recorded in the account books should be the actual cost paid, and not
the asset's current market value.

 ENTITY
 It means accounting records reflect the financial activities of a specific business
or organization, not of its owners or employees.

 FULL DISCLOSURE

It means financial statements and their notes should contain all relevant data.

 MATCHING

It means transactions affecting both revenues and expenses should be recognized in the
same accounting period.

 MATERIALITY

It means minor events may be ignored, but the major ones should be fully disclosed.

 MONEY MEASUREMENT

It means the accounting process records only activities that can be expressed
in monetary terms.

 OBJECTIVITY

Financial statements should be based only on verifiable evidence, including an audit

trail.

 REALIZATION

It means any change in the market value of an asset or liability is not recognized as a
profit or loss until the asset is sold or the liability is paid off.

 UNIT OF MEASUREMENT

It means financial data should be recorded with a common unit of measure.

TYPES OF ACCOUNTS
The Accounts can broadly be classified into:

 Personal Accounts
 Impersonal Accounts

o PERSONAL ACCOUNTS
Personal Accounts can be identified very easily as they are simply the accounts of the
those parties that a business normally deals with. The are opened in the names of those
parties. They are usually the suppliers and customers of the business or to be more
technical the creditors and debtors.

o IMPERSONAL ACCOUNTS
Impersonal accounts are all accounts other than the personal accounts. They can further
be categorized into Real Accounts and Nominal Accounts.

 Real Accounts

Real Accounts are the Accounts that refers to the possessions of a business. The
possessions may be tangible or intangible. The possessions are the Assets of a business.

 Nominal Accounts

The nominal accounts are all those accounts that are in the nature of incomes and
expenses of a business. These accounts are closed at the financial year end with the
income & expense summary to arrive at the net profit or loss amount.
RULES OF DEBIT AND CREDIT

 REAL ACCOUNTS

o Debit what comes in

Consider the following Transaction :

Bought Furniture on credit from M/s Wood Mart

The two elements effected by the transaction are

 Furniture a/c (Real account) and

 M/s Wood Mart a/c (Personal account).

Since furniture is being bought, we can say that it is coming in. Thus we say that
Furniture a/c is to be debited based on the principle "Debit what comes in".

o Credit what goes out

Consider the following Transaction

Sold Goods to Mr. Murty on credit

The two elements effected by the transaction are:

 Goods a/c (Real account) and

 Mr. Murty a/c (Personal account).

Since goods are being sold, we can say that it is going out. Thus we say that Goods
a/c is to be credited based on the principle "Credit what goes out".
 PERSONAL ACCOUNTS

o Debit the benefit receiver

Consider the following Transaction

Paid Cash to Mr. Ibrahim

The two elements effected by the transaction are:

 Cash a/c (Real account) and

 Mr. Ibrahim a/c (Personal account).

Since cash is being paid to Mr. Ibrahim, we can say that he is receiving (the
benefit) from the organisation. Thus we say that Mr. Ibrahim a/c is to be debited
based on the principle "Debit the benefit receiver".

o Credit the benefit giver

Consider the following Transaction

Bought Goods on credit from M/s Maghan Lal & Co

The two elements effected by the transaction are:

 Goods a/c (Real account) and

 M/s Maghan Lal & Co a/c (Personal account)

Since the goods are being bought on credit from M/s Maghan Lal & Co, we can
say that they are giving (the benefit) to the organisation. Thus we say that M/s
Maghan Lal & Co a/c is to be credited based on the principle "Credit the benefit
giver".
 NOMINAL ACCOUNTS

Accounting transactions affecting an element or account of the type nominal are related
to an expenditure/loss or income/gain to the organisation.

o Debit all Expenses and Losses

Consider the following Transaction

Paid Wages to Workers

The two elements effected by the transaction are:

 Cash a/c (Real account) and

 Wages a/c (Nominal account)

Since wages are being paid, it amounts to an expenditure for the organisation. Thus
we say that Wages a/c is to be debited based on the principle "Debit all expenses
and losses"

o Credit all Incomes and Gains

Consider the following Transaction

Received Commission from M/s Onyx Chemicals by Cheque

The two elements effected by the transaction are:

 Bank a/c (Personal account) and

 M/s Commission a/c (Nominal account).
Since commission is being received, it amounts to an income for the organisation.
Thus we say that Commission a/c is to be credited based on the principle "Credit
all incomes and gains".
INTRODUCTION TO TALLY

Tally is powerful accounting software, which is driven by a technology called concurrent

multi-lingual accelerated technology engine. It is easy to use software and is designed to simply
complex day to day activities associated in an enterprise. Tally provides comprehensive
solution around accounting principles, inventory and data integrity.

MAIN AREA:

The main area at Gateway is broadly separated into two sections. The right hand side contains
the menu, where you would select your instructions to Tally and left hand side displays List of
Selected Companies, Current Period and Current Date you are working with tally screen.
BUTTON AREA:

Button Bar consisting of numerous buttons appears at right of the screen. Buttons provide quick
access to different options, which varies from screen to screen. Active buttons are shown in
solid colour and inactive buttons are showed in grayed colour.

CALCULATOR:

Working with Tally, at any moment you can either work at Work Area (where menu, reports
and entry screens etc appear) or with Calculator. By default work Area becomes active (Teal
colour band appears at top of this section) and Calculator remains inactive. Press Ctrl+N to
activate Calculator.
INSTALLATION AND ACTIVATION OF TALLY

1. INSTALLATION
 Double click the install.exe icon on the CD

 In the Tally.ERP 9 Setup section, you can accept the default directories as shown or click
on the buttons provided next to the respective text boxes to change the path
of Application Directory, Data Directory, Configuration Directory, Language Directory
and License Directory.
 TheTally.ERP 9 Setup Wizard screen is displayed as shown
 Click Next to continue with the installation

 In the Country/Language Selection screen, check Install Operating System Language

Support to install Tally.ERP 9 with multi-lingual support.
 Click Install.
 The Setup Status screen is displayed as shown.

 After completion of setup.

 In the installer screen click Finish to complete Tally.ERP 9 Setup.

2. ACTIVATION OF TALLY
 Launch the software
 Following screen will be displayed
 Click on first option activate licence.

 Following screen will displayed

 Click on first option if installing first time
 Enter the serial no. and the activation key
 Press enter

 You will get the below screen and then press ENTER
CREATING A COMPANY

 Open Tally Software by double clicking on the Tally.ERP 9 icon.

 You will be landed to a menu called company info menu.

 Select Create Company option in the menu and press enter key.
 The screen displayed in-front of you is company creation screen.
 Type the name of the company ,address,Financial year begins and all other details asked
by the creation screen.

 Name: Type the name of the company in this field , for Example. ABC LTD
 Address: This is the place where we can enter the address of the company.
 Country : Select the country from the list in which your business exist.
 State : Select the state in which you want to comply statute.
 Pincode: Pincode of the location where your company office exists.
 Telephone: Enter telephone number
 Mobile No: Enter mobile number
 Fax No : Fax No if exists.
 Email: Enter your official communication mail id
 Website: Enter website address if exists.
 Financial year from: Type financial year in which you want create a company. suppose you may be
starting company on September 01 2016, You should enter the financial year from as 01.04.2016 .
 Book beginning from: Most of the company have a book beginning date same as financial year
starting date.But may differ for companies
 Base Currency Symbol: This the currency symbol of the country you have selected.No need to
change it if you are using the same currency for accounting.
 Formal Name: This is the formal name of the currency you are using.
 Is symbol Suffixed to amounts: asking whether currency symbol is required prior to amount
like $45
 Add space between Amount and symbol: This is like $ 45, a space in between currency
symbol and amount.
 Show Amount in millions: if you set this option Yes ,Tally will display amount in millions
,That is in Balance sheet or other report, Amount for example 10000000 will be shown as 10. one
million is equals 1000000.
 Number of decimal place: Usually 2 decimal places are using, for using Paisa in Indian
currency we use 2 decimal place like Rs 99.99 ,Ninety nine rupees ninety nine Paisa.
 Word used to print decimal portion of amount: This is used in printing , in Indian currency
decimal portion is said to be Paisa. Set it as per your formal name of decimal value in your
currency. .For USD it is cents.Hundred cents make one dollar.
 Decimal place for printing amount in words: If you set this option 1 in Indian currency, When
printing 75 Paisa. prints seventy Paisa. if you set 2 then it will print second fraction like seventy five
Paisa.
 Tally vault password: This is for security purpose, By enabling this,Tally ERP9 Convert tally
data in to encrypted format. Encryption means convert data from recognised format to
unrecognised format.

 Press Enter Key, Finally the program will ask you the confirmation to Save ,Yes or No.
Press yes or Y.
 You will be asked user name password you have entered in security control. enter that as
well

 The program will create a company and you will be entered into it.
Shutting down a company
 Press Alt+F1 at the gateway of tally

 List of company appears

 Double click on the company you want to shut.
 The company will be shut down and you will be directed to the main menu screen
DELETING THE COMPANY

 Click on the Select the company button.

 List of companies appears.(this list displayed is of loaded companies)

 Double click on the desired company you want to shut.

 Following screen will be displayed

 Click F3 to open the company info panel

 Here click on the alter option.

 This screen will be displayed

 Press Alt +D and it will ask ‘Delete?’

 Press yes or Y

 It will again ask ‘Are you sure?’

 Again press yes or y

 The company is shut down now (You cannot access the data of this company again as the
database will be deleted completely)
SHORT CUT KEYS

ALT + 2 = DUPLICATE VOUCHER

ALT + A = ADD VOUCHER/ALTER COLUMN IN COLUMINAL REPORT

ALT + C = CREATE MASTER AT VOUCHER SCREEN

ALT + D = DELETE A VOUCHER

ALT + E = TO EXPORT THE REPORT IN ASCII, HTML OR XML

ALT + I = INSERT A VOUCHER/ TO TOGGLE BETWEEN ITEM AND ACCOUNTING

INVOICE

ALT + N = VIEW THE REPORT IN AUTOMATIC COLUMNS

ALT + P = PRINT THE REPORT

ALT + R = REMOVE LINE IN A REPORT

ALT + S = UNDO OPTION/ BRING BACK LINE REMOVED

ALT + U = RETRIEVE THE LAST LINE WHICH IS DELETED BY ALT+R

ALT + W = VIEW TALLY WEB BROWSER

ALT + X = CANCEL A VOUCHER IN DAY BOOK OR FROM LIST OF VOUCHERS

CTRL + A = TO ACCEPT A FORM (WHEN YOU USE IT THAT SCREEN AND REPORT
GETS ACCEPTED AS IT IS)

CTRL + ALT + B = USE TO CHECK COMPANY STATUTORY DETAILS

CTRL + G = USE TO SELECT A GROUP

ALT + H = TO DISPLAY HELP SHORTCUT

CTRL + M = THIS IS USED TO SWITCH TO MAIN AREA OF TALLY SCREEN

ALT + F1 = CLOSE A COMPANY/VIEW DETAILED REPORT

ALT + F3 = SELECT COMPANY INFO MENU (GATEWAY OF TALLY SCREEN)/ TO

CREATE OR ALTER A COMPANY

ALT + M = EMAIL THE REPORT

CREATING LEDGER
 From Gateway of Tally, go to Accounts Info.

 Then go to Ledgers.

 Now, under Single Ledger, select the option Create.

 Now you will see a simple Ledger Creation window in which you will have to enter
certain details about the ledger.
 It looks like in the picture below.

 Name – The first option is the Name of the ledger. Enter the name of the ledger, for
example, Furniture A/c or Building A/c.
 Under – Every ledger requires a group to operate in. For example, Furniture A/c and
Building A/c will be under Fixed Assets group as they are both Fixed Assets.
 You have to select a group that is required as per your ledger.
 Inventory values are affected – If you have a ledger which requires inventory or in simple
words, stock to be maintained, set this option to Yes.
 For example, you are selling sim cards, your ledger will be Sim Cards.
 There must be a quantity to sell i.e. stock or inventory and so you must set Yes to
Inventory Values are affected.
 Mailing Details – You have to fill in the mailing details like Name, Address, Country and
Bank Details for the ledger.
 It is for the ledgers such as debtors and creditors which require these kind of details.
 Ledgers such as Furniture or Building do not require these details because they are not
humans and therefore they do not have any mailing details.
 Tax Registration Details – Similar to mailing details, these details are also of people and
not for ledgers like furniture, building etc.
 Tax registration details include PAN which is required on any tax related documents.
 Opening Balance – This is the opening balance of the ledger if any.
 Any balance of the ledger which is being carried forward from the previous year will
have to be entered as the opening balance.
ACCOUNTING VOUCHER
A document that serves as evidence of a business transaction is often called a Voucher.
Sometimes, mistakenly taken as just a bill receipt, a voucher can actually have any form.

There are 6 types of vouchers in tally

 Purchase(F9)

 Sales(F8)
 Receipt(F6)

 Payment(F5)
 Contra(F4)

 Journal(F7)
Shortcut to select type of entries:

How to create accounting vouchers?

 Enter the gateway of tally.

 Click on accounting vouchers.

 You will enter in the accounting voucher creation screen.

 Here select the type of transaction u want to do.
 Either press shortcut keys or click on the buttons on the right side of the
screen.
Sample question1:
Date Transactio Date Particulars Dr. Cr. Name Shortcut
n Of key
Detail vouche
r
01- Cash rcd 01- Cash 1000000 Receipt F6
04- from AK 04- To Ak
2016 Sharma as 2016 Sharma’s 1000000
Capital Capital
A/c
01- Cash 01- P.N. Bank 800000 Contra F4
04- deposited 04- A/c
2016 in 2016 To Cash 800000
Punjab A/c
National
Bank
01- Purchased 01- Furniture 175000 Journal F7
04- Furniture 04- & Fixtures
2016 and 2016 To Ram 175000
Fixtures Wood
from Works
Ram Wood A/c
Works
01- Computer 01- Computer 65000 Journal F7
04- purchased 04- A/C
2016 from H.P. 2016 To H.P. 65000
LTD. LTD. A/C
01- Advertisem 01- Advertiseme 10000 Paymen F5
04- ent exp 04- nt t
2016 paid cash 2016 To cash A/c 10000
01- Rent paid 01- Rent 10000 Paymen F5
04- to Mr. 04- To cash A/c t
2016 Malhotra 2016 10000
01- Staff salary 01- Salary A/c 6000 Paymen F5
04- cash paid 04- To cash A/c t
2016 2016 6000
01- Cheque 01- Ram wood 125000 125000 Paymen F5
04- issued to 04- works t
2016 ram wood 2016 To PNB
works from
PNB
01- Cheque 01- HP Ltd. 65000 65000 Paymen F5
04- issued to 04- To PNB t
2016 HP Ltd. 2016
From PNB
01- Tea 01- Tea exp 5000 5000 Paymen F5
04- expenses 04- To cash A/c t
2016 cash paid 2016
02- Purchased 02- Purchases 575000 575000 Purchas F9
04- grey 04- To ACC Ltd. es
2016 cement 2016
from ACC
Ltd.
02- Purchased 02- Purchases 375000 375000 Purchas F9
04- white 04- To J.K Ltd es
2016 cement 2016
from J.K
Ltd.
02- Advertisem 02- Advertiseme 5000 5000 Paymen F5
04- ent exp 04- nt t
2016 paid cash 2016 To cash A/c
02- Grey 02- Cash A/c 15000 15000 Sales F8
04- cement 04- To sales A/c
2016 cash sold 2016
02- White 02- Deepak 25000 25000 Sales F8
04- cement 04- kumar
2016 sold to 2016 To sales A/c
Deepak
kumar
Solution:
 CREATION OF INDIA CEMENT TRADING COMPANY.

 CREATION OF LEDGERS :
 AK SHARMA CAPITAL A/C
 PNB A/C

 FURNITURE AND FIXTURES

 RAM WOODS WORKS

 COMPUTER A/C
 HP LTD. A/C

 ADVERTISEMENT EXPENSES A/C

 RENT A/C

 STAFF SALARY A/C

 TEA EXPENSES A/C

 PURCHASES A/C
 ACC LTD. A/C

 J.K. LTD. A/C

 DEEPAK KUMAR A/C

 SALES A/C
 CREATION OF ACCOUNTING VOUCHERS
 Cash received from AK SHARMA as capital.

 Cash deposited in PNB .

 Purchased furniture and fixtures from RAM WOODS WORKS

 Computer purchased from HP LTD

 ADVERTISEMENT EXPENSES paid in cash

 RENT paid to Mr. Malhotra

 STAFF SALARY cash paid

 Cheque issued to RAM WOODS WORKS from PNB

 Cheque issued to HP LTD from PNB

 TEA EXPENSES cash paid

 Purchased Grey Cement from ACC LTD

 Purchased White Cement from J.K. LTD

 ADVERTISEMENT EXPENSES cash paid

 Grey Cement cash sold

  White Cement sold to DEEPAK KUMAR

 Balance sheet