Chapter IV

UNIT IV
CONFIGURATION TALLY
CONFIGURING TALLY (F12)

Configuration in Tally applies for the company. They are
1) GENERAL: In general configuration, it contains the details of Country, Styles of

names appearing, Number configuration, table configuration, Import / Export
options. These are the options which can be operated accordingly to the
requirement.
2) NUMBER SYMBOL / NUMERICAL SYMBOL: This option is only for the

number styles and prefix / suffix to be use and symbols for debit & credit
amounts.
3) ACCOUNTS / INVENTORY INFO MENU: this option allows the Accounts

and inventory to use the address and contact details or godown details and
description , remarks of the stocks.
4) VOUCHER ENTRY: Two options always to be activated

a) Use Single Entry mode for payment/receipt/contra : NO
b) Use Cr / Dr instead of To /By during an entry : YES
Other options in Voucher entry can be activated as per the requirement of a
customer.
5) INVOICE OR ORDER ENTRY : This option is used only when the Invoice
order is been needed
WORKING IN TALLY
To work with Tally Fundamental knowledge is required. One must know the golden rules
of accounting for preparation of Final Accounts. In early times manual system of
accounting was required for maintaining the Books of Accounts such as Journal, Cash
book, Special purpose book, Ledger and so on. Such lengthy process of preparing
Accounts is been simplified in tally. In India, Tally ERP 9 Is the most popular and reliable
business software for Finance, Accounting, inventory and Payroll management. Tally
professionals having expertise in computer Accounting, Taxation, Payroll Accounting,
Excise, VAT and Service Tax are highly demanded.
The process of accounting of Tally is given below:
1) Creation of Company in Tally
2) Identify the groups and Ledgers to be created respectively for the specific
transaction
3) Identify the monetary transaction with the help of given voucher or Invoices
4) Know the particular ledger to be Debit or Credit with the help of the transaction
given
5) In additional to the voucher entries, Cost center, Cost categories are also been
created for accounting purpose and Stock items, stock categories, and units of
measurement will be created for the Inventory information.
6) On entering all the transactions, reports will be automatically generated
GROUP CREATION
A Group is a collection of ledgers which have similar transactions. For example, all
account heads relating to fixed assets of the company are grouped under the fixed assets
primary group in Tally.ERP 9. Using this classification, one can generate reports that are
meaningful as well as compliant with statutory requirements.
Tally ERP ( provides a set of 28 Pre-defined groups under which ledgers can be classified
i.e, 15 Primary groups and 13- Sub Groups. Out of the 15 Pre-defied primary groups, 9
primary groups are of Capital (Which appear in Balance Sheet) and 6 Primary groups are
revenue nature (which appear in Profit & Loss Account). All 13 Sub-groups are classified
under the nine primary groups that are capital in nature and appear in the Balance sheet.
15 Primary Groups 13 Sub Groups

Branch / Divisions Bank Accounts
Capital Account Bank OD A/c
Current Assets Cash-in-hand
Current Liabilities Deposits (Asset)
Direct Expenses Duties & Taxes
Direct Incomes Loans & Advances (Asset)
Fixed Assets Provisions
Indirect Expenses Reserves & Surplus
Indirect Incomes Secured Loans
Investments Stock-in-hand
Loans (Liability) Sundry Creditors
Misc. Expenses (ASSET) Sundry Debtors
Purchase Accounts Unsecured Loans

Sales Accounts
Suspense A/c
Creating a Group
In Tally.ERP 9 there are two options for creating Groups:
Single Group – We can create only one Group by using Single Group creation screen.
Multiple Groups – We can create multiple Groups by using Multiple Group Creation
screen.
Creating a Single Group
Group is a collection of Ledgers of the same nature, Tally.ERP 9 allows you to create
groups as per your requirements.
Go to Gateway of Tally > Accounts Info. > Groups > Create under Single Group
The Group Creation screen is displayed as shown:
Name of Group:Enter the name of the Group to be created.

For example“Administrative Expenses” in the name field.
Alias: Enter an alias name to allow access to the group using the Alias in addition to its
name or leave it blank. For example, for Administrative expenses, you can enter Office
Expense or even an alphanumeric code, say E001, as an alias
Under: Specify under which existing (Parent) group the sub-classification is required.
Pre-defined Groups in Tally.ERP 9
By default, Tally.ERP 9 provides a list of Groups called pre-defined groups. The user can
create any number of Primary Groups and Sub Groups which are again grouped under a
Primary Group/Sub Group.
.
CREATING A LEDGER
Go to Gateway of Tally > Accounts Info. > Ledgers
You can create either Single or Multiple Ledgers.
Debtor/Creditor Classification
1. Placing individual party accounts under Sales or Purchase Accounts groups:
Accounts of parties with whom your company has trade relationship must be opened
under one of the following groups (or sub-groups under them) only:
Sundry Debtors
Sundry Creditors
Branch/Divisions
Sales and Purchase account groups are meant for revenue accounts and would be
reflected in the Profit & Loss Account. If you open party accounts under these groups,
you will find it difficult to pass sales or purchase voucher transactions. For example, in a
sales voucher transaction entry, you must debit an account which is a sundry debtor,
branch/division or even a sundry creditor (why a creditor? - it will be explained soon).
Moreover, other facilities like bill-wise allocation and tracking will not be available
unless the accounts belong to one of these groups.
2. Opening two accounts of the same party
For convenience Tally.ERP 9 has separately classified debtors, creditors and
branch/divisions. There is no operational distinction except for the purpose of keeping the
accounts of a particular group together during displays and analysis. You can pass both
sales and purchase entries for a party account placed under Sundry Debtors.
We recommend that you use the classification depending on the most natural group for
the party. For example, parties from whom you buy more frequently then you sell to can
be placed under Sundry Creditors, as that would be the natural place for you to look for
his account.
Tally.ERP 9 does not restrict the accounts from having obverse balances. Thus, a Sundry
Debtor can have a credit balance depending on the state of his account.
Note: You need not open two accounts of the same party - one under Sundry
Debtors and another under Sundry Creditors.
Remember, Tally.ERP 9 restricts you from opening two identical ledger accounts. Of
course, you may decide to circumvent by marking one account as A & Co - S/Dr and
another A & Co - S/Cr. Doing this would allow you to have two accounts of the same
party under two groups, but you would lose the advantage of analyzing his net position at
one instance. We recommend that you maintain a single account to obtain best results.
3. Placing expenditure items under a Liabilities group, e.g., the expenditure item 'Rates &
Taxes' under the group 'Duties and Taxes'.
The group Duties and Taxes is specifically meant to handle taxation liabilities of your
company. Rates & Taxes and other statutory expenses should be placed under Indirect
Expenses.
Pre-defined Ledgers in Tally.ERP 9
There are two pre-defined ledgers available in Tally.ERP 9, they are:

 “Cash” This Ledger is created under the Group Cash-in-hand. You can enter
the opening balance as on the date of books beginning from. You can also alter the
name and even delete the Ledger.
 “Profit and Loss Account” This Ledger is created under the Group Primary.
Previous year’s Profit or Loss is entered as the opening balance for this ledger.
The balance entered here is treated as the opening profit/loss and shown in the
Balance Sheet as opening balance of Profit and Loss account in the Liabilities
side.
You cannot delete this ledger, but you can modify the same.
Creating a Single Ledger
By default, Tally.ERP 9 contains two Ledger accounts namely, Cash (Under Cash-in-
Hand) and Profit and Loss Account (direct Primary Account). You need to create all other
accounts heads. There are no restrictions in Ledger creation except that you cannot create
another Profit & Loss A/c. Any number of Cash Accounts may be created in any other
name for ex: Petty Cash.
Go to Gateway of Tally > Accounts Info > Ledgers > Create
Ledgers can be created in Normal mode or in Advance mode.

Creating Ledger in Normal Mode
The creation of a Ledger depends on the features you have selected under F11:
Features of your company and F12: Configure. You can create a single ledger account
with the default options enabled.
Go to Gateway of Tally > Accounts Info > Ledgers > Single Ledger > Create
 Name: Enter the Name of the account. You can provide the full name of the
account. Tally.ERP 9 fits it all in. Press Enter to move to the next field. Tally.ERP
9 does not allow the entry of duplicate names. The uniqueness check is made here
itself.
NOTE that the punctuation and other non-relevant information are ignored by Tally.ERP
9 in its recognition of a name. Thus, CST, C.S.T. and C. S. T. are all considered as same.
Tally.ERP 9 converts the first letter of all relevant words to upper case, which helps you;
speed up data entry.
 Alias: Enter an alias name if required. You can access the Ledgers using the
original name or the alias name.
 Under: All accounts must be classified under their appropriate Groups. Select
the Group under which the Ledger is created from the List of Groups. (To create
a new Group from this field press [ALT + C]). A wrong classification would
affect the treatment of the Ledger account in final statements and during voucher
entry. You can, alter a Ledger account to change its group classification at any
time.
 Opening Balance: If yours is an existing company whose books you are entering
into Tally.ERP 9, Opening Balance would be applicable in circumstances where
the Ledger is an asset or a liability and if it has a balance in the account as on the
date of beginning of books in Tally.ERP 9.

Creating a Purchase / Sales Ledger
Purchase / Sales ledgers are required for trading, repacking or for usage in manufacturing
products. Sales and Purchase account groups are meant for revenue accounts and are
reflected in the Profit & Loss Account.
To create a Purchase / Sales Ledger,
 Inventory values affected: This is applicable for Companies

maintaining Accounts with Inventory. Inventory allocation is required for
Accounts like Sales, Purchase, Receipt note, Delivery note, etc. However,
Tally.ERP 9 does not restrict to particular accounts as you may have the need to
affect inventory with accounts like Customs Duty, and perhaps, direct expenses
related to purchases such as Freight Inwards.
 Cost Centers are applicable: Tally's concept of Cost Centers allows an
additional dimension to a transaction. .
 You have set Maintain Cost Centers to Yes in F11: Features:F1:Accounting
Features, to get this option in the Ledger creation screen. If any of the
transactions need to be allocated to any particular Cost Center (Which involves
this ledger) set this option to Yes.
 Activate Interest calculation: Set this option to Yes to enable Tally.ERP 9 to
calculate interest automatically based on the interest rate and style of calculation
specified for this ledger account.
 Use advanced parameters: The advanced parameters are particularly useful
where interest rates change from time to time. Set this option to Yes to enable this.
 Provide Bank Details: This option allows you to set your Bank Details such as
the A/C number, Bank Name, IFSC code, BSR etc.
Creating a Expenses / Income Ledger
Expense ledgers must be created for each of the expense account separately.
To create a Expenses / Income ledger,

Tally.ERP 9 does not restrict you to particular accounts as you may have the need
to affect inventory with accounts like Customs Duty, and perhaps, direct expenses
 Cost Centres are applicable: Tally's concept of Cost Centres allows an
You have set Maintain Cost Centres to Yes in F11: Features:F1:Accounting Features,
to get this option in the Ledger creation screen. If any of the transactions need to be
allocated to any particular Cost Center (Which involves this ledger) set this option to Yes.

Creating a Duty and Taxes Ledger
Tax Ledgers should be created under Duties and Taxes group which contains all tax
accounts like VAT, CENVAT, Excise, Sales and other trade taxes and total liability.
To create a Tax Ledger,

 Type of Duty/Tax: This option is based on statutory compliance of company. For
Indian statutory, by default, it will show the Excise and Others. Depends on
features in F11: Statutory, more options will be included in the Type of Duty/Tax.
 Inventory values affected: This is applicable for Companies maintaining
Accounts with Inventory. Inventory allocation is required for Accounts like Sales,
Purchase, Receipt note, Delivery note, etc. However, Tally.ERP 9 does not restrict
you to particular accounts as you may have the need to affect inventory with
accounts like Customs Duty and perhaps, direct expenses related to purchases
such as Freight Inwards.
 Cost Centres are applicable: Tally's concept of Cost Centres allows an additional
dimension to a transaction.
 You have to set Maintain Cost Centres to Yes in F11: Accounting Features, to
get this option in the Ledger creation screen. If any of the transactions need to be
allocated to any particular Cost Center, set this option to Yes.
 Percentage of Calculation: The Group Duties and Taxes is used for
automatic tax calculation. You need to specify the rate of tax e.g. 5%, 10%,
12.5% etc. You can use an automatic Discount calculation facility by specifying a
negative percentage in this field. On entering a percentage, a new field Method of
Calculation is displayed. From the Method of Calculation, you can select
appropriate options to calculate the Tax/Duty.
 Rounding Method This is used to round off the duty value. By default
rounding method will be Blank. Once you select rounding Method, rounding
Limit sub option will be displayed. Here you can specify the round off limit.
For Example:
For Duty value 123.33 and rounding Limit is 1,
Downward rounding will show as 123
Normal rounding will show as 123
Upward rounding will show as 124
Creating a Current Liabilities / Assets Ledger

Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can
be created directly under Current Liabilities and Assets can be classified as Current assets
and Fixed assets. To create Fixed Assets ledger,
Tally.ERP 9 does not restrict to particular accounts as you may have the need to
affect inventory with accounts like Customs Duty, and perhaps, direct expenses
 Cost Centres are applicable: Tally's concept of Cost Centres allows an
You have set Maintain Cost Centres to Yes in F11: Features: F1:Accounting
Features, to get this option in the Ledger creation screen. If any of the transactions need
to be allocated to any particular Cost Center (Which involves this ledger) set this option
to Yes.
Creating a Ledger with Advanced Usage

The information required for creating Ledgers depends on the features selected by you
under F11: Features and F12: Configure. The Ledger Creation screen will have
additional fields depending on your feature settings for your company. If you set the
field Allow ADVANCED entries in Masters in F12: Configure (Ledger
Configuration) as Yes, you can work in Advanced.
Enable the following features in F11:Features (F2:Accounting Features):
 Allow Multi-Currency
 Maintain Billwise Details
 Maintain Cost Centres
Enable all the options under Accounts Masters in F12: Configure (Ledger

Configuration):
Creating Multiple Ledgers

You can create multiple Ledgers at a time in this mode. This will save the time of the
user.
Go to Gateway of Tally > Accounts Info > ledgers > Multiple ledgers > Create
Under Group
Select the name of the group under which you want to create the Ledgers from the List of
Groups. Below this field, the other fields are arranged in a table. The cursor rests at the
field Name of Ledger.
The other fields in the column are:
 Sl.No: This is auto generated.
 Name of Ledger: Enter the name of the Ledger.
 Under: If you select All Items in Under Group field, you have the option to
select the group in this column. You can even create a new group from this field
by pressing Alt+C. If you haves elected any other Group in Under Group, the
selected group in Under Group gets displayed here automatically and the cursor
skips this column.
 Opening Balance This is the balance remaining when you first enter your
books on Tally.ERP 9 9, i.e., the date of beginning of books. If you have opted to
maintain balances bill-by-bill, you must give the bill details
 Dr/Cr Specify whether the Opening Balance is Debit or Credit. Tally.ERP 9
follows the normal accounting principals of accounting.
Note: While creating Ledgers in multiple mode, the field Cost Centres are
applicable, is set to YES for Revenue accounts and NO for Non-Revenue
accounts by default. The field Inventory values are affected is set to Yes for
Sales and Purchase Accounts and No for the others by default.

Displaying / Altering a Ledger Account
Information under Display and Alter is the same. Display option does not permit any
modification. Alter option permits you to alter the information. You are allowed to alter
any information of the ledger master with the exception of the Closing Balance of a
ledger account, if any, other than closing balance of accounts under the group Stock-in-
hand.
Go to Gateway of Tally > Accounts Info. > Ledgers > Display or Alter
Modification of Account Ledgers is possible under Single Ledgers as well as Multiple
Ledgers option. However under Multiple Ledgers, all the fields are not available for
Alteration
Deletion:
You can delete the ledger if no vouchers have been created under this ledger.
Go to Gateway of Tally > Accounts Info > Ledgers > Alter > Press Alt+D
If you want to delete a Ledger for which Vouchers have been created, then you have to
first delete all the Vouchers from that Ledger and then delete the Ledger Account.
Buttons available:
Buttons Keys Description and Usage
G: Groups Ctrl+G You can create “Stock Group” from the Stock
Item Creation screen
E: Currency Ctrl+C Currency You can create “Currency” from
the Stock Item Creation screen
S: Cst Cat Ctrl+S You can create “ Cost Category” from the
Stock Item Creation Screen
C: CstCtr Ctrl+C You can create “Cost Center” from the Stock
Item Creation screen
B: Budget Ctrl+B You can create “Budget” from the Stock Item
Creation Screen
V: Vch Types Ctrl+V You can create “Voucher Type” from the
Stock Item Creation screen

VOUCHER IN TALLY
ACCOUNTING VOUCHERS
Contra Voucher (F4)

Contra Entry is a transaction indicating transfer of funds from:
Cash account to Bank account;
Bank account to Cash account
One Bank account to another Bank account .
<Syntax>
Dr: Cash / Bank
Cr: Cash / Bank
The main transaction recorded in this voucher are:

 Deposit cash into bank
 Withdraw of cash from bank
 Transfer of cash from one Bank to another
PROCEDURE:
GWT- Transactions- Accounting voucher- Contra voucher (F4)
Step-1 F2- Date, F12-configuration
Step-2 Pass the entry
Step-3 Give narration
Step-4 save it or
Out put: YES
ILLUSTRATION 1 Deposit of cash of Rs 25,000 to State bank of India
Solution: Ledgers to be prepared: State Bank of India : Bank Account
PARTICULAR DEBIT CREDIT

Cr Cash A/C 25,000
Dr State Bank of India 25,000
[Being Cash deposited to Bank]
Accept : YES
ILLUSTRATION 2 Withdraw of cash of Rs 1,500 from HDFC Bank
Solution: Ledgers to be prepared: HDFC Bank : Bank Account

Cr HDFC Bank 1,500
Dr Cash A/c 1,500
[Being Cash withdrawn from
bank]
Accept : YES
ILLUSTRATION 3 Transfer of cash of Rs 20,000 from HDFC Bank to ICICI Bank

Solution: Ledgers to be prepared: HDFC : Bank Account
ICICI : Bank Account

Cr ICICI Bank 20,000
Dr HDFC Bank 20,000
[Being Cash transferred]
Accept : YES
ILLUSTRATION 4 Deposit of cash of Rs 15,000 CanaraI Bank & SBI Bank
Solution: Ledgers to be prepared: Canara Bank : Bank Account
SBI : Bank Account

Cr Cash 30,000
Dr Canara Bank 10,000
Dr ICICI Bank 10,000
[Being Cash deposited]
Accept : YES
ILLUSTRATION 5 Withdraw of cash of Rs 20,000 equally from HDFC & Canara Bank
Solution: Ledgers to be prepared: HDFC : Bank Account
Canara Bank : Bank Account

Cr HDFC 10,000
Cr Canara Bank 10,000
Dr Cash 20,000
[Being Cash withdrawn]
Accept : YES
PAYMENT VOUCHER (F5)
All payables either in the form of Cash / Bank should be recorded in this
voucher. In this particular DEBIT comes first and next CREDIT
<Syntax>
Dr: Expenses / purchase of Fixed Assets / purchase of shares / Duties &
Taxes / Sundry Debtors & sundry Creditors
Cr: Cash / Bank
The main transaction recorded in this voucher are:

 Payment of expenses Ex: rent paid, commission paid etc.
 Purchase of fixed assets Ex: Furniture, Land & building, Machinery etc.
 Purchase of shares Ex: Shares in Wipro, Shares in Infosys etc
 Payment of taxes by cash
 All types of bills cleared to customers / Suppliers.
PROCEDURE:
GWT- Transactions- Accounting voucher- Payment voucher (F5)
Step-4 save it or
Out put: YES
ILLUSTRATION 6: Paid rent Rs 20,000/- & commission Rs 3,000 by cash for Jayanagar
center
Solution:
Ledgers to be prepared: Rent paid A/c : Indirect expenses

Commission A/c : Indirect Expenses

Dr Rent paid A/c 20,000
Dr Commission paid A/c 3,000
Cr Cash A/C 23,000
[Being rent & commission paid]
Accept : YES
ILLUSTRATION 7: Purchased furniture worth Rs 30,000 @ Rs 28,000 by cash.
Solution:
Ledgers to be prepared: Furniture A/c : Fixed Assets
Discount received A/c : indirect Income

Dr Furniture A/c 30,000
Cr Discount received A/c 2,000
Cr Cash A/c 28,000
[Being furniture purchased at
discount]
ILLUSTRATION 8: Purchased Computer worth Rs 30,000 by SBI & Shares in Wipro Rs

10,000 by cash.
Solution:
Ledgers to be prepared: Computer A/c : Fixed Asset

Shares in Wipro : Investment

Dr Computer A/c 30,000
Dr Shares in Wipro A/c 10,000
Cr SBI 30,000
Cr Cash 10,000
[Being Computer & Shares purchased]
Accept : YES
ILLUSTRATION 9 Paid Advance of Rs 5,000 for AB Traders by Cash
Solution: Ledgers to be prepared: MN Traders (supplier) : Sundry Creditors

Dr AB Traders 5,000
Cr Cash 5,000
[Being Cash paid in advance]
Accept : YES
ILLUSTRATION 10 Paid Advertising Expenses for Rs 20,000 the expenses are allotted
as follows
 Banner Rs. 3,000
 Holdings Rs. 4,000
 News Rs. 6,000
 Pamphlet Rs. 4,000
 Magazine Rs. 3,000
Solution: Step 1 : Create Cost Category: Advertisement

Step 2 : Create Cost Center : (under Advertisement)
: Banner
: Holdings
: News
: Pamphlet
: Magazine
NOTE: To Activate Cost Category and Cost Center GO to GWT-F11-Accounting
Features- Activate
Step 3: Create Ledger : Advertisement Expenses : Under: Indirect Expenses

Dr Advertisement Expenses A/C 20,000
Banner
Holdings
News
Pamphlet
Magazine
Cr Cash 5,000
[Being Advertisement Expenses Paid]
Accept : YES
RECEIPT VOUCHER (F6)
All receivables either in a form of Cash / Bank should be recorded in this voucher. In this
particular voucher CREDIT comes first & next DEBIT.
<Syntax>
Cr: Incomes / Sale of fixed assets / sale of shares / capital / sundry
creditors & sundry debtors
Dr: Cash / Bank
The main transaction recorder in this voucher are:

 Income received: Ex, Commission received, Interest received etc
 Sale of Fixed Assets: Ex, Furniture, Land & Building, Machinery Etc
 Sale of shares: Ex, Shares in reliance, TESCO Etc
 Capital introduced to Business
 Al types of Bills cleared from customers or Suppliers
Types of Bill:
 New reference Bill
 Against Bill
 On Account Bill
 Advance Bill
PROCEDURE:
GWT- Transactions- Accounting voucher- Receipt voucher (F6)
Step-4 save it or
Out put: YES
ILLUSTRATION 11: Mr.Calwin started a business with cash of Rs 75,000
Solution:
Ledgers to be prepared: Capital A/C : Capital Account
PARTICULARS DEBIT CREDIT

Cr Capital 75,000
Dr Cash A/C 75,000
[Being cash introduced to business]
Illustration 12: Sold Furniture worth Rs 20,000 at the rate of 17,000 by ICICI Bank
Solution: Ledgers to be prepared: Furniture A/c : Fixed Asset
Loss on Furniture A/c : Indirect Expenses
ICICI Bank A/c : Bank Accounts
Cr Furniture A/C 20,000
Dr Loss on Furniture A/c 3,000
Dr ICICI Bank A/C 17,000
[Being Furniture sold at Loss]
Accept : YES
Illustration 13:
Received Rent and commission Rs 30,000 equally from Jayanagar cost center
Solution:
Ledgers to be prepared: Rent received A/c : Indirect Income

Commission received A/c : Indirect Income

Cr Rent received A/C 15,000
Cr Commission received A/c 15,000
Dr Cash A/C 30,000
[Being rent & commission received]
Accept :YES
ILLUSTRATION 14: received advance from ABC & Co. Rs 2,000/- by cash which was
then remitted to ICICI Bank
Solution:
Ledgers to be prepared: ABC & Co A/c (Customer) : Sundry Debtor

ICICI Bank A/c : Bank Account
Note: Two entries to be entered. 1) Receipt voucher & 2) Contra voucher
Receipt voucher:
Cr ABC & Co 2,000
Advanced Bill
Dr Cash A/C 2,000
[Being cash received in Advance]
Contra voucher:
Cr Cash A/C 2,000
Dr ICICI bank A/C 2,000
[Being cash deposited]
JOURNAL VOUCHER (F7)
They are also referred as ADJUSTMENT VOUCHER. All types of transaction
can be recorded in this voucher but, it should not include C-Cash, B-Bank, P-
Purchases and S-Sales{C,B,P,S}.
<Syntax>
Dr: Any ledger
Cr: Any ledger
The main transaction recorder in this voucher are:

 Depreciation of Fixed Assets
 Appreciation of Fixed Assets
 Bills of Exchange
 Transfer of cash from one A/C to another
 Receivables / Payables without cash & Bank
PROCEDURE:
GWT- Transactions- Accounting voucher- Journal voucher (F7)
Step-4 save it or
Out put: YES
Illustration 15: Appreciation of Land & Building at 5% who’s book value is

Rs.5,00,000
Solution:
Ledgers to be prepared: Land & Building A/c : Fixed Assets
Appreciation A/c : Indirect Income

Dr Land & Building A/c 25,000
Cr Appreciation A/c 25,000
[Being Land & Building value
appreciated]
Illustration 16: Depreciate of Furniture by 15% who’s book value is Rs.50,000
Solution: Ledgers to be prepared: Depreciation A/C : Indirect Expense
Furniture A/c : Fixed Asset

Dr Depreciation A/C 7,500
Cr Furniture A/c 7,500
[Being Furniture Depreciated]
Illustration 17: Transfer of cash Rs 10,000 from shyam’s capital A/c to Ram’s
Capital Account
Solution:
Ledgers to be prepared: Ram’s Capital A/c : Capital Account
Shyam’s Capital A/c : Capital Account

Dr Ram’s capitalA/C 10,000
Cr Shyam’s Capital A/ 10,000
[Being Cash transfered]
Sales Voucher (F8)

A sales Voucher is used when goods or services are sold to a customer (Sundry Debtor),
for Example a company sells software on credit.
Sales voucher is also known as Invoice. In Tally.ERP 9, when Invoicing feature is

activated you can generate sales invoices as per your business requirements.
Illustration 18: Sold Goods for Cash Rs.12,000
Solution:
Ledgers to be prepared: Sales : Sales Account
Dr Cash A/c 12,000
Cr Sales A/c 12,000
[Being Sold goods for cash]
Illustration 19: Sold Goods to Mr.X for cash Rs.8,000
Solution: Ledgers to be prepared: Mr.X : Sundry Debtors

Dr Mr.X A/C 8,000
Cr Sales A/c 8,000
[Being Sold goods for cash]
Purchase Voucher (F9)
A purchase voucher is used when goods or service are purchased from the supplier
(Sundry Creditor), for example a company Raw materials on Credit.
A purchase voucher is also known as Purchase Invoice or a bill, which is issued by the
supplier for the purchases made by the customer. In Tally ERP 9, when invoicing feature
is activated you can create purchase Invoices as per your business requirements.
If the purchase invoice needs to prepare activate (Ctrl + V) in the purchase voucher
Illustration 20: Purchased goods for cash Rs. 2,500

Solution: Ledgers to be prepared: Purchase : Purchase A/C
Cr Cash A/c 2,500
Dr Purchase A/c 2,500
[Being goods purchased for Cash]
Illustration 21: Purchased goods from Mr.B on credit Rs. 5,000
Solution: Ledgers to be prepared: Mr.B : Sundry Creditors
Cr Mr.B A/c 5,000
Dr Purchase A/c 5,000
[Being goods purchased on Credit]
Credit Note Voucher (Ctrl + F8)
A credit note is prepared by the seller and it contains the date on which goods are
returned, name of customer, details of the goods received back, amount of such
goods and reasons for returning the goods. A credit Note register records all the
credit Notes passed during the relevant period.
Debit Note Voucher (Ctrl + F9)

Debit note is prepared by the buyer and it contains the date of goods returned,
name of the supplier, details of the goods returned and reasons for returning the
goods and so on. A Debit Note Register records all the Debit Notes passed during
the relevant period.
Reversing Journal Voucher (F10)

• Reversing Journals are used to record the transactions without affecting the ledger
accounts and financial statements. All reversing journal transaction are stored in a
Reversing Journal Register.
Memo Voucher (Ctrl + F10)

• This is a non-accounting voucher and the entries made using it will not affect your
accounts. That is, Tally.ERP 9 does not post these entries to ledgers but stores
them in a separate Memo Register
Transaction – 1 1-1-2013 Mr. Mohammed started business with Cash of Rs.5,00,000
Step 1: Journal Entry

Date Particulars Debit Credit
Rs. Rs.
1-1-2013 Cash A/c Dr 5,00,000

To Capital Account
(Being Cash introduced in business) 5,00,000
Step 2: Ledger Creation

Ledgers required to enter the transaction are
i) Cash Account (Cash Account need not be created as it is there by default in
tally)
ii) Capital Account
Create Capital Account
To create a ledger account: Go to – Gateway of tally --- Account Info --- Ledgers ---
Single Ledger --- Create
Fill in the following fields to create a Capital Account
Name Mohammed’s Capital
(Alias) Give an alternative name if required
Under Capital Account
(Select Capital Account group from pop-up on screen)
Inventory Values are Affected No
Step 3: Voucher Creation This transaction need to be entered in Receipt Voucher
Create Receipt Voucher Go to – gate Way to Tally --- Accounting Voucher ---
Receipt Voucher (F6) and enter the transaction.
The voucher Entry Screen appears
Transaction – 2
Opened a bank account in SBI depositing Rs. 1,00,000

Rs. Rs.
1-1-2013 SBI Bank A/c Dr 1,00,000
To Cash Account
(Being Cash deposited to Bank) 1,00,000
Step 2: Ledger Creation Go to – Gateway of Tally --- Account Info --- Ledgers
--- Single Ledgers --- Create: SBI A/C (Under Bank Accounts)
Step 3: Voucher Creation: Go to --- Gateway of Tally --- Accounting Voucher ---
Contra voucher (F4)
The Voucher Entry Screen appears as below:
Transaction – 3
Purchased a Computer for Rs.25,000, Furniture worth Rs.10,000

Rs. Rs.
1-1-2013 Computer A/C Dr 25,000
Furniture A/c Dr 10,000
To Cash Account
(Being Computer & Furniture purchased) 35,000
Go to – Gateway of Tally --- Account Info --- Ledgers --- Multiple Ledgers --- Create
: Computer A/c- (Under Fixed Assets), Furniture (Under Fixed Assets)
Step 3: Voucher Creation
Go to – Gateway of Tally --- Accounting Voucher---Payment Voucher(F5)

Transaction – 4
Purchased stationery for Rs.500

Rs. Rs.
1-1-2013 Stationery A/c Dr 500
To Cash Account 500
Go to – Gateway of Tally --- Account Info --- Ledgers --- Single Ledger --- Create
Go to – Gateway of Tally --- Account Voucher --- Payment Voucher (F5)

Transaction – 5
Made a Contract with Zoom Cable T.V. for advertisement and made a security deposit of
Rs. 5000

Rs. Rs.
1-1-2013 Security Deposit A/c Dr 5000
To Cash Account
(Being paid for Security deposit) 5000
Go to – Gateway of Tally --- Account Info --- Ledgers --- Single Ledger --- Create
Security Deposit – Under: Advanced Assets
Go to – Gateway of Tally --- Account Voucher --- Payment Voucher (F5)

ILLUSTRATION 1
Create necessary ledgers and pass the journal entries

1. Mahesh started a business by bringing in cash of Rs 3,00,000
2. He opened a bank account with Canara bank, Bangalore for the firm depositing
cash Rs 2,00,000
3. He had rented a office space for Rs3,000 per month on 1st april 2014 and has now
paid security deposit Rs30,000 by cheque
4. He issued cheques and purchased the following
Furniture : Rs10,000
Air Conditioner : Rs 20,000
Electrical fittings : 15,000
5. Paid wages Rs 2,500
6. Received commission Rs 6,000
7. Purchased goods from Global travelers Rs 30,000
8. Sold goods to Anbu enterprises for Rs 45,000
9. With draw from bank for personal use Rs 5,000
10. Paid by cheque rent Rs 3,000 ; Salary Rs 10,000 and Telephone Bill Rs 4,000
Gateway of tally-Account info-Ledger-Create

Gateway of tally – Accounting voucher
Sl.N Type of
Key Voucher Ledger Group Principles Amount
o account
Cr. Mahesh Capital Capital account Personal Giver 3,00,000
1 F6 Receipt
Dr. Cash Cash in hand Real Comes in 3,00,000
Cr. Canara Bank Bank account Real Goes out 15,000
2 F4 Contra
Dr. Cash Cash in hand Real Comes in 15,000
Third entry Not Applicable
Cr. Bank Bank Account
Real Goes out 45,000
Dr. Furniture A/c Fixed Asset Real Comes in 10,000
4 F8 Sales Dr. Air conditioner Fixed Assets
Real Comes in 20,000
Dr. Electrical Fixed Asset
fitting
Dr. Wages Direct Expenses Debit all
Personal 2,500
5 F5 Payment Expenses
Cr. Cash Cash in hand Real Goes out 2,500
Cr. Commission Indirect
Nominal Credit all Gains 6,000
6 F6 Receipt Expenses
Cr. Global Traders Sundry creditors Personal Giver 30,000
7 F9 Purchases Dr. Purchases Purchase
account
Cr. Sales Account Sales Account Real Goes out 45,000
8 F8 Sales Dr. Anbu Sundry Debtors
Personal Receiver 45,000
Enterprises
Dr. Drawings Capital Account Personal Giver 5,000
9 F5 Payment
Cr. cash Cash in hand Real Goes out 5,000
Dr. Rent Indirect Debit all
Expenses Nominal 3,000
expenses
Dr. Salary Indirect Debit all
10 F5 Payment Nominal 10,000
Expenses expenses
Dr. Telephone Bill Indirect Debit all
Nominal 4,000
Expenses expenses
Cr. Canara Bank Bank account Real Goes out 17,000
To view-
 Gateway of tally-Accounts info-Ledger-Multiple ledger Alter-All items (for
ledger)
 Gateway of tally-Display-Day book-Alt+F1 (to see detail) (Accounting
Voucher)
ILLUSTRATION 2
Journalise the following transactions in the book of Mr. Anand
Jan1 2015 Commenced business with Cash Rs 50,000
Jan 2 2015 Opened a bank account in SBI and deposited therein Rs 10,000
Jan 3 2015 Purchased goods for cash Rs 4,000
Jan 6 2015 Sold goods for cash Rs 6,000
Jan 8 2015 Purchased goods from Vinay Rs 5,600
Jan 12 2015 Sold goods to Ganesh Rs 6,500
Jan 15 2015 Returned goods to Vinay Rs 100
Jan 16 2015 Received from Ganesh Rs 4,000
Jan 18 2015 Paid For Stationery Rs 150
Jan 21 2015 Paid to Vinay Rs 3,500
Jan 31 2015 Paid office rent Rs 2,000
Date
Type of
Jan Key Voucher Ledger Group Principles Amount
account
2015
Cr. Capial A/C Capital account Personal Giver 50,000
1 F6 Receipt
Cr. Cash Cash in hand Real Goes out 15,000
2 F4 Contra
Dr. Bank Bank A/c Personal Receiver 15,000
Cr: Cash A/c Cash in hand Real Goes out 4,000
3 F9 Purchases Dr: Purchases Purchase All Expenses &
Nominal 4,000
A/c Account losses
6 F8 Sales
Cr. Sales Sales Account Real Goes out 6,000
Cr. Vinay’s Account Capital Account Personal Giver 5,600
8 F9 Purchases Purchase
Dr. Purchases A/c Real Comes In 5,600
Account
Dr. Ganesh A/c Capital Account Personal Receiver 6,500
12 F8 Sales
Cr. Sales Sales Account Real Goes out 6,500
Dr. Vinay’s A/c Capital Account Personal Receiver 100
Ctrl +
15 Debit Note Cr. Purchase Purchase
F9 Real A/c Goes Out 100
Returns A/c Account
Cr. Ganesh’s A/c Capital A/c Personal Giver 4,000
16 F6 Receipt
Dr. Cash A/c Cash-In-Hand Real Comes In 4,000
Indirect Debit All

Dr: Stationery A/c Nominal 150
Expenses Expenses
18 F5 Payment
Cr: Cash A/c Cash-In-hand Real Goes Out 150
Capital A/c
Dr: Vinay’s A/c Personal Receiver 3,500
21 F5 Payment
Cr: Cash A/c Cash-In-hand Real Goes Out 3,500
Indirect Debit All

31 F5 Payment Dr: Rent A/c Nominal 2,000
Expenses Expenses
Cr: Cash Cash-In-Hand Real Goes out 2,000
INTRODUCTION OF REPOTS IN TALLY ERP 9
Tally ERP 9 Provides you the capability to generate various financial statements and a
management information system reports, thereby facilitating better management,
effective control and well-informed decisions.
It allows you to generate numerous report and statements. The reports available in Tally
ERP 9 can be grouped under the following board categories
 Financial Statements and Reports
 Accounting Books & Ledgers
 Statement of Accounts
 MIS reports
 Exception Reports
In Tally ERP 9, in the report display, you can drill down to next level of detail by
highlighting item and pressing Enter. You can do this you reach an individual voucher.
Similarly, you can return to the earlier display screen by pressing Esc. Select the special
features available for a particular report from the button bar.
FINANCIAL STATEMENTS
Financial Statements & Reports and statements which comprise of the overall summary
of all transactions entered into the accounts books. In tally the reports are automatically
generated.
In Tally ERP 9, the financial statements are classified into the following:
 Balance Sheet
 Profit & Loss A/c
 Trial Balance
Balance Sheet
Balance sheet is a financial statement that includes the financial position or net worth of a
company at any given point. It lists the Assets & Liabilities of a company for a given
period. The balance sheet in Tally ERP 9 displays the information entered in the default
primary groups. It is updated in real time with every transaction/ Voucher entry.
To View Balance Sheet:

GO to Gate way of tally > Reports > Balance Sheet
 Press Alt + F1 to view in Detailed Mode
 Press F2 : Period to change the period of the Balance sheet
The screen is displayed as shown
PROFIT & LOSS A/C
It is the financial statement that describes the operational results of the company or its
earning capacity for a given period. It lists the company’s incomes and expenditure.
The profit & Loss A/c in Tally ERP 9 displays the information based on the default
primary groups. It is updated instantly with every transaction that is entered and saved.
To View Profit & Loss A/c:

GO to Gate way of tally > Reports > Profit & Loss A/c
 Press Alt + F1 to view in Detailed Mode
 Press F2 : Period to change the period of the Balance sheet
The screen is displayed as shown
Trial Balance
A Trail Balance is a listing of all accounts, with their balances enters as debits and credits
in columns, to determine whether the accounts balance, that is whether, total debits equal
total credits
The trial balance is typically prepared at the end of an accounting period just before
preparing the adjusting entries the financial statements.
To View: Gate Way Of Tally---------Reports--------Display---------Trial Balance

To view in detailed or Condensed Alt+ F1
To change the Period Alt + F2
ACCOUNTS BOOKS & REGISTERS
Account Books record individual transaction details which you have entered. Though the
items are posted to different ledgers .Tally ERP 9 brings together all the transactions of
one category into books of accounts for viewing and printing. For example, the cash book
records all the transactions affecting cash. Tally ERP 9 provides you capability to
generate various books and registers for any specific period. Viz, Month, Date and year
and as on date.
I. CASH BOOK
Cash Book is a ledger which records all cash receipts and cash payments
Go to Gateway of tally > Display > Accounts Book> Cash/Bank Book
Press Enter on Cash Ledger
In the Ledger Monthly Summary, select April and press Enter
II. BANK BOOK

Bank book is a ledger which records all bank receipts and bank payments
To generate Bank Book

Go to Gate way of Tally> Display > Accounts Books > Cash / Bank Book (s)
Select the requires bank Account
Pres Enter on the required month to view Bank transactions for a month
PURCHASE REGISTER
The purchase register is a record pf all purchase transactions made by an organization. By
default, this register displays the month-wise break-up of purchases, however it can be
further configured to show the purchases of any period as per the users requirement.
To display the Purchase register

Go to Gate way of Tally > Display > Accounts books > Purchase register
Press enter on the month to view purchase transactions for a month

Press Alt + F1 for Detailed View
The purchase register is shown as:
SALES REGISTER
The sales register is a record of all sales transactions made by an organization. By default,
this register displays the month- wise break-up of purchases however, it can be
configured to show the sales of any period as per the users requirement.
To display the Sales register

Go to Gate way of Tally > Display > Accounts books > Sale register
Press enter on the month to view Sales transactions for a month
Press Alt + F1 for Detailed View
The Sales register is shown as:
JOURNAL REGISTER
Journal is a date-wise record of all the transactions with details of the accounts debited
and credited and the amount of each transaction. Journal vouchers are generated recorded
for making adjustments to ledger accounts.
To display the Journal register
Go to Gate way of Tally > Display > Accounts books > Journal register
DAY BOOK
A Day book records all transaction (viz, Accounting, Inventory, optional and Non-
Accounting ) entered during relevant period.
By default the Day Book displays the last voucher entry date of a regular voucher, but it
can be set to show any date of the users choice.
To display the Day Book

Go to Gate way of Tally > Display > Day Book
Specify the required period to view transactions entered for that particular day, week and
year or for any specified period.

Chapter IV

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UNIT IV

CONFIGURING TALLY (F12)

1) GENERAL: In general configuration, it contains the details of Country, Styles of

2) NUMBER SYMBOL / NUMERICAL SYMBOL: This option is only for the

3) ACCOUNTS / INVENTORY INFO MENU: this option allows the Accounts

4) VOUCHER ENTRY: Two options always to be activated

15 Primary Groups 13 Sub Groups

Purchase Accounts Unsecured Loans

Name of Group:Enter the name of the Group to be created.

Go to Gateway of Tally > Accounts Info. > Ledgers

You can create either Single or Multiple Ledgers.

Pre-defined Ledgers in Tally.ERP 9

There are two pre-defined ledgers available in Tally.ERP 9, they are:

Creating a Single Ledger

Ledgers can be created in Normal mode or in Advance mode.

 Inventory values affected: This is applicable for Companies

Creating a Expenses / Income Ledger

 Inventory values affected: This is applicable for Companies

Creating a Current Liabilities / Assets Ledger

Creating a Ledger with Advanced Usage

Enable all the options under Accounts Masters in F12: Configure (Ledger

Creating Multiple Ledgers

Contra Voucher (F4)

The main transaction recorded in this voucher are:

ILLUSTRATION 1 Deposit of cash of Rs 25,000 to State bank of India

Solution: Ledgers to be prepared: State Bank of India : Bank Account

PARTICULAR DEBIT CREDIT

PARTICULAR DEBIT CREDIT

ILLUSTRATION 3 Transfer of cash of Rs 20,000 from HDFC Bank to ICICI Bank

PARTICULAR DEBIT CREDIT

PARTICULAR DEBIT CREDIT

PARTICULAR DEBIT CREDIT

The main transaction recorded in this voucher are:

Ledgers to be prepared: Rent paid A/c : Indirect expenses

PARTICULAR DEBIT CREDIT

ILLUSTRATION 7: Purchased furniture worth Rs 30,000 @ Rs 28,000 by cash.

PARTICULAR DEBIT CREDIT

ILLUSTRATION 8: Purchased Computer worth Rs 30,000 by SBI & Shares in Wipro Rs

Ledgers to be prepared: Computer A/c : Fixed Asset

PARTICULAR DEBIT CREDIT

ILLUSTRATION 9 Paid Advance of Rs 5,000 for AB Traders by Cash

Solution: Ledgers to be prepared: MN Traders (supplier) : Sundry Creditors

PARTICULAR DEBIT CREDIT

Solution: Step 1 : Create Cost Category: Advertisement

Step 3: Create Ledger : Advertisement Expenses : Under: Indirect Expenses

PARTICULAR DEBIT CREDIT

RECEIPT VOUCHER (F6)

The main transaction recorder in this voucher are:

ILLUSTRATION 11: Mr.Calwin started a business with cash of Rs 75,000

Ledgers to be prepared: Capital A/C : Capital Account

PARTICULARS DEBIT CREDIT

Ledgers to be prepared: Rent received A/c : Indirect Income

PARTICULARS DEBIT CREDIT

Ledgers to be prepared: ABC & Co A/c (Customer) : Sundry Debtor

Note: Two entries to be entered. 1) Receipt voucher & 2) Contra voucher

The main transaction recorder in this voucher are:

Illustration 15: Appreciation of Land & Building at 5% who’s book value is

PARTICULARS DEBIT CREDIT

PARTICULARS DEBIT CREDIT

PARTICULARS DEBIT CREDIT

Sales Voucher (F8)

Sales voucher is also known as Invoice. In Tally.ERP 9, when Invoicing feature is

Illustration 18: Sold Goods for Cash Rs.12,000

Illustration 19: Sold Goods to Mr.X for cash Rs.8,000