Tally

Basics of Accounting  Tally is an Accounting Accounting Software Software that helps you in maintaining Accounts and Inventory of your office.

General Accounting What is Accounting “Accoun “Accounting ting is the art of recordin recording, g, classify classifying ing and summariz summarizing ing in a signific significant ant manner and in terms of money, transactions and events, which are in part, at least, of a financial character, and interpreting the result thereof” – American Institute of  certified public accountants.

Methods of Accounting There are two types of Accounting Systems.

1. American American Method Method or or Single Single Entry Entry System. System. 2. English English Method Method or or Double Double Entry Entry System. System.

1.

Amer Americ ican an Meth Method od or Sing Single le Entr Entry y Syst System em..

It has further five types of accounting. I. II. III. IV. V.

Assets Accounts Liabilities Accounts Capital Accounts or Owner’s Equity A/c Revenue or Income Accounts Loss or Expenses A/c

Methods of Recording I. II. III. IV. V.

Debit the Increase in the Assets and Credit the Decrease in the Assets. Credit the Increase in the Liabilities and Debit the Decrease in the Liabilities. Credit the Increase in the Capital and Debit the Decrease in the Capital. Credit the Increase in the Income and Debit the Decrease in the Income. Debit the Increase in the Expenses and Credit the Decrease in the Expenses.

2.

Engli nglish sh Met Metho hod d or or Dou Doubl ble e Ent Entry ry Syst System em..

Classification of Accounts

1. Personal Accounts:  These accounts accounts are those accounts accounts which which are opened by a name of a person, firm, company, society or organization.

Rules: “Debit the Receiver and Credit the Giver”. Types of Personal Accounts: I. Natura Naturall Person Personal al Accounts Accounts::

a) MAHESH’s MAHESH’s Accounts Accounts b) Owner’s Owner’s Capital Capital Account Accounts s c) Owner’s Owner’s Drawi Drawing ng Account Accounts s d) Debtor Debtors s Accou Accounts nts e) Creditors Creditors Accounts Accounts II. Artificial Artificial Personal Personal Accoun Accounts ts a) Firm’s Firm’s Accoun Accounts ts a) Co Comp mpany’ any’s s Accoun Accounts ts b) Organizat Organization ion Accounts Accounts c) Bank Bank Acco Accoun unts ts d) Club Club Accou Accounts nts e) Insurance Insurance Company Company Accounts Accounts f) Gover Governm nment ent Sect Sector or acc accoun ounts ts III. III. Represen Representative tative Personal Personal Accounts Accounts

a) b) c) d)

Outstandin Outstanding g Salary Salary Due to Staff Staff account account Prepaid Prepaid Insurance Insurance Account Account Accru Accrued ed Income Income Accou Account nt Unearned Unearned Comm Commission ission Accou Account nt

3. Real Rea l Account Acc ounts s:  Those Business assets which can be measure in the term of money their accounts are called Real Accounts.

Rules: “Debit what comes in and and Credit what goes out”.

2.

Engli nglish sh Met Metho hod d or or Dou Doubl ble e Ent Entry ry Syst System em..

Classification of Accounts

1. Personal Accounts:  These accounts accounts are those accounts accounts which which are opened by a name of a person, firm, company, society or organization.

Rules: “Debit the Receiver and Credit the Giver”. Types of Personal Accounts: I. Natura Naturall Person Personal al Accounts Accounts::

a) MAHESH’s MAHESH’s Accounts Accounts b) Owner’s Owner’s Capital Capital Account Accounts s c) Owner’s Owner’s Drawi Drawing ng Account Accounts s d) Debtor Debtors s Accou Accounts nts e) Creditors Creditors Accounts Accounts II. Artificial Artificial Personal Personal Accoun Accounts ts a) Firm’s Firm’s Accoun Accounts ts a) Co Comp mpany’ any’s s Accoun Accounts ts b) Organizat Organization ion Accounts Accounts c) Bank Bank Acco Accoun unts ts d) Club Club Accou Accounts nts e) Insurance Insurance Company Company Accounts Accounts f) Gover Governm nment ent Sect Sector or acc accoun ounts ts III. III. Represen Representative tative Personal Personal Accounts Accounts

a) b) c) d)

Outstandin Outstanding g Salary Salary Due to Staff Staff account account Prepaid Prepaid Insurance Insurance Account Account Accru Accrued ed Income Income Accou Account nt Unearned Unearned Comm Commission ission Accou Account nt

3. Real Rea l Account Acc ounts s:  Those Business assets which can be measure in the term of money their accounts are called Real Accounts.

Rules: “Debit what comes in and and Credit what goes out”.

Types of Real Accounts: I. Tang Tangib ible le Re Real al Acco Accoun unts ts:: Thes These e acco accoun unts ts are are thos those e asse assets ts account which can be touched.

a) b) c) d) e)

Cash Acc Cash Accoun ountt Stock Stock Accou Account nt Furni Furnitur ture e Account Account Land Land Accou Account nt Buildi Building ng Account Account

II. Intang Intangibl ible e Real Real Accoun Accounts: ts: Those Those accounts accounts are those those asset assets s account which can’t touch but can be measured in the term of  money.

a) b) c) d)

Goodw Goodwill ill Acco Account unts s Patent Patents s Accou Accounts nts Trade Trade Mark Mark Accoun Accounts ts Copy Co py Right Right Accou Accounts nts

4. Nominal Nomi nal Account Acco unts s: Income and Expenditure accounts of a business are called nominal accounts.

Rules: “All the Expenses are debited and and Incomes are credited”. Types of Real Accounts: I. Expenditure Accounts: a) Salary Salary Paid Paid Acc Accoun ounts ts b) Rent Rent Paid Paid Acco Account unts s c) Bed Debts Debts Accou Accounts nts d) Commiss Commission ion Paid Paid Accounts Accounts II. Income Accounts: a) Salary Salary Recei Received ved Accoun Accounts ts b) Rent Rent Receiv Received ed Accoun Accounts ts c) Commiss Commission ion Received Received Accounts Accounts d) Interest Interest Received Received Accounts Accounts e) Bed Debts Debts Recovered Recovered Accounts Accounts

Steps for working in the Tally 1. Create Company: In Tally this is the First task or primary task to create a company. For this Purpose we have to select the Create Company option from menu Gateway of Tally. After selecting the option we have to fill up the details for the Company like Company Name, Address, Started Date, and Income Tax No etc. 2. Creates Groups: Groups are created for same type of Ledger A/cs. In  Tally There are many groups which are used for making ledgers. So in the rare cases we have to create groups. These are the main groups in the tally. I. Reserve and Surplus (Retained Earning):  You can use this group heads like Investment Allowance Reserve, Select Ledger and other such reserve accounts. a) Current Assets:  This is the primary group that has all the current assets accounts. It has Six Sub Groups under it. b) Bank Accounts: It is used to hold all accounts of banks. c) Cash in hand: It is used to hold ledger account of cash. d) Deposits: It is used to hold assets like security deposits, rental deposits and all other deposits made by the company. e) Loan and Advances: It is used to hold all advances and loans of  non trading nature given by the company. f) Stock in hand: It is used to hold certain special accounts like raw material, finished goods and work in progress. g) Sundry Debtors: It is used to hold accounts of companies and individuals that give goods on credit to the company. III. Current Liabilities:  This is a primary group and is used to hold outstanding and statuary liabilities of the company. The group has three sub groups under it which are as follows. a) Duties and taxes: It consists all types of taxes and duties like Excise, Local Sales tax, Central Sales Tax, VAT etc. b) Provisions: It is used to hold other tax provisions like Income tax, depreciation in it. c) Sundry Creditors: It is used to hold accounts trade creditors of the company.

IV. Fixed Assets:  This is used to keep accounts of all the fixed assets, patents, trade tights etc. V. Investment:  This is used to hold ledger accounts of shares, bonus

and other securities of the company. VI. Loan Liabilities:  This is used to keep track of loan taken by the company. This group has three sub groups which are as follows. a) Bank OD Accounts: It is used to hold all overdraft accounts with

banks. b) Secured Loans: It is used to hold long/medium term loans taken by the company from financial companies and Banks etc. c) Unsecured Loans: It is used to hold the loans taken unconditionally by the company. VII. Suspense Accounts:  This is used by many companies to maintain a suspense ledger which keeps track of money received or paid by the companies, whose nature of transaction is not yet known. VIII. Miscellaneous Expenses:  The loss of the company, which has not been written off but carried forward to the next year, should fall here. However, tally treats it as a negative profit and carries it to the profit and loss account. IX. Branches/Division:  This is used to keep the names of all companies which may be branches, divisions of the company. X. Sales Account: It is used to all goods sales accounts of the companies. XI. Purchase Account: It is used to all goods purchase accounts of  the companies. XII. Direct Income: It is used to hold ledger accounts of non‐trade income accounts that affect gross profit. XIII. Indirect Income:  This is used to hold ledger accounts of those expenses of the company that determine its gross profit. For example interest received and commission received. XIV. Direct Expenses:  This is used to hold ledger accounts of those expenses of the company which determine its gross profit. Expenses like salary paid to labour, transportation, electricity bills etc. XV. Indirect Expenses: This is used to hold ledger account of those expenses of the company, which determine its net profit. Expenses like advertising, maintenance of vehicles, administrative expenses etc.

3. Create Ledgers: Ledgers are actual account heads to which the transactions are identified. You Make all voucher entries in these accounts. You have to classify all ledgers in to groups. 4. Voucher Entries: For Making the Voucher Entries first of all we have to set the voucher date by pressing F2 then enter the voucher date. There are various types of vouchers in tally. Those are describes as follows: ‐ I. Contra Voucher:  This type of voucher is used for Cash to Bank, Bank to Cash and Bank to Bank Entries. Press F4 to select the voucher type. II. Payment Voucher:  This type of voucher is used for the Cash Payment Entries. Press F5 to select the voucher type. III. Receipts Voucher:  This type of voucher is used for the Cash Receipts Entries. Press F6 to select the voucher type. IV. Journal:  This is used for the Journal Entries like debit of credit Entries. Press F7 to select the voucher type. V. Sales Voucher:  This is used for the Goods Sales Entries. Press F8 to select the voucher type. VI. Purchase Voucher:  This is used for Goods Purchase Entries. Press F9 to select the voucher type. VII. Memo:  This is used to create Memorandum or Reverse Journal Voucher. Press F10 to select the voucher type. 5. Display Reports:  There are several types of reports are generated by the tally like  Trading and Profit and Loss Account, Balance Sheet, Inventory Reporting Ratio Analysis etc.

Introduction to Tally  Tally is a Financial and Inventory Management System. Tally is one of the acclaimed Accounting Software with large user base in India and abroad, which is continuously growing. Tally is developed in India using Tally Development Language (TDL). Tally software was developed by Mr.Bharat Goenka in the year 1988.

Features of  Tally 1. 2.

Accounting wihtout codes Comprehensive Accounting. Maintains complete range of books of Accounts, Final A/c’s like Balance Sheet , Profit & loss A/c, cash and fund flow , Trial Balance and others.

3. 4.

Provides Multiple reports in Diverse formats Various options for interest Calculations

5.

Maintain multiple Godowns for stock management.

6.

Unlimited sub-classifications to get multi-dimensional analysis and comparatives.

7. 8.

Allow accounts of multiple companies simultaneously. Multiple currencies in the same transaction and viewing all reports in one or more currency. Prints online.

9. 10.

print daybook and balance sheet and ledger , trial balance and profit and loss a/c.

11. Backup and restore option 12. Tally is allow to cheque printing 13. Multi tax calculation like VAT, TDS, TCS, FBT, e t c . 14. Calculate Payroll calculation easily. 15. Use Security levels for audit purpose.

 To start Tally : Start -> Programs ->Tally 9 -> Tally 9 Release 2 Or Double click on the Tally shortcut in the desktop to open Tally

3) 4) 5)

Calculator - used for calculator functions. Buttons toolbars - displays buttons that provide quick interaction with tally. Minimize Button - Performs the standard windows function allowing us to minimize tally to work on other applications.

Creating a Company When Tally first loads the Gateway of Tally area is available. When no companies are there , then the Select company option is not activated. The cursor is placed the create company meaning that a company should be created. Press enter in Create company option in order to create a company.

 To create a company choose create company option in the gateway of  tally screen or company information menu. While creating a new company it will ask for the following inforamtion. a)

Directory - In this if needed we have to specify the path where the company file should be stored in your computer. By default D:\Tally\Data is the path taken.

b)

Name - In this we have to type the name of the company.

c)

Mailing Name - In this we have to type the mailing name, which is used to all the letters used in Tally.

d)

Mailing Address - In this we have to type the mailing address, such as street , city, pincode for the company.

i)

 j )

k)

l)

m)

Financial Year - In this we have to type the starting date of the financial year. In accountancy financial year start from April 1 of year to Mar 31 of the next year. For example 1 april 2007 to 31 march 2008. Automatically tally adds 12 months with the starting date of the financial year. Book Beginning From - In this we have to specify the date in which the book should be started. The date given must lie in between the financial year starting date and ending date. Tally Valut Password - In this we have to specify the password for the company, if so the company name will not be displayed in the Select company option. Use Security Control - While opening the company if we need to specify the user name and password for protection ( ex: other person can’t open our company) , we can make this option to yes and specify the user name and password. Base Currency Symbol - This option specifies the information about currency used in the company. Such as Base Currency Symbol, Formal Name,Number of decimal places, Is symbol suffix with amount, symbol for decimal portion, show amount in Millions, Is symbol suffixed with amount etc. Note : All the above information is not must, we can specify the important things and omit the others.

Group And Leger Accounts Organization: Ledger accounts and groups In manual accounting, accounts are grouped upon preparation of Trial balance to prepare final accounts, namely Profit and loss A/c and Balance Sheet. In tally at the time of creation ledger accounts, we place it under appropriate account group. Account Groups provide us the ability to classify our accounts to get all the reports instantly and properly classified. We have the liberty to re-group later to suit our requirements.

Creating a Group  Tally provides a list of 28 pre-defined groups. Of these, 15 are primary groups and 13 are sub-groups. We may configure our groups to enable / disable advanced mode. Press F12 -> Accts/ Inv info -> Account Masters -> Set to yes the following options Allow Advances entries in masters Use Address for Ledger Accounts

- Yes - Yes

Single group - Allows us to work on one group or sub-group at a time. Gateway of Tally -> Accounts Info -> Groups -> Single -> Create

needed. We can create a new parent group by using Alt +c. In other words Alt +C is the shortcut key to create a ledger or group during creation or during voucher entry.

Altering Groups Once created, groups can be altered by selecting Alter for single or multiple groups. The procedure is the same as we used to display groups except of course we may alter the data.

Deleting Groups We can delete a group via the Group Alteration screen by pressing Alt +D. However , we cannot delete Tally pre-defined groups,or groups with sub-groups, or groups containing ledgers. The lowest level must be deleted first.

Ledgers Once we have created necessary Masters, now it is the turn of  ledger creation. Tally on its own, Creates 2 ledgers listed below all others we have to create. Cash (under Cash- in - hand Group) Profit & Loss Account (Primary edger) Ledger is the actual account head to which we identify a transaction. We pass all accounting voucher entries using ledgers. All ledgers have to be classified into groups. Hence, a through understanding of a ccount classification is important working with ledgers List of ledgers frequently used and their related Groups

1. Capital Account 2. Name of your creditors 3. Name of your Debtors 4. Name of Expenses Expenses according to the nature 5. Name of Income 6. Name of Bank 7. Name of Current Asset •

stock in hand

•

deposits

Capital Account Sundry Creditors Sundry Debtors Direct Expenses or Indirect of expenses → Indirect Income → Bank Account → Current Assets → → → →

show short term investment 8. Name of Fixed Asset → 9. Name of Current Liabilities → 10. Name of Fixed Liabilities → 11. Name of Loss → 12. Bad Debts → 13. Provision for Bad Debts → 14. Outstanding Expenses → 15. Advance Income → 16. Outstanding Income → 17. Sale Tax / VAT → 18. Excise Duty / CENVAT •

→ Fixed Asset

Current Liabilities Fixed liabilities Direct Expenses or Indirect Exp. Indirect Exp. Current Liabilities Current Liabilities Current Liabilities Current Assets Duties and Taxes Duties and Taxes

Name

Enter the Name of the account Alias

Enter an alias name if required Under

All accounts must be classified under their appropriate Groups. Select the Group under which the Ledger is created from the List of Groups. Go to Gateway of Tally> Accounts Info > Ledgers > Create (under Multiple Ledgers)

Under Group Select the name of the group under which you want to create the Ledgers from the List of Groups. S.No  This is auto generated. Name of Ledger

Exercise: 1

 Name Mailing Name Address State PIN Code Telephone No E-Mail Currency Symbol Maintain

: King Sons : King : 101, 7th Main, M.G. Road, Bangalore : Karnataka : 588 002 : 6789999 : [email protected] : Rs. : Account only

Exercise: 2

 Name Mailing Name Address

State PIN Code Telephone No E-Mail Currency Symbol Maintain

: GI Enterprises : GI : 45, 3rd Main, Rajajinagar, Chennai : Tamil Nadu : 600 268 : 4789043 : [email protected] : Rs. : Account with Inventory

Exercise: 3

Create a Ledger: Mariya’s Capital A/C Canara Bank Purchase Sales Rent Electricity Bill Wages Stationery Discount Paid Insurance Paid Discount Received Commission Paid Paid Petty Cash Office Expenses

 Typewriter A/C Purchase from Nick Computers A/C Rent A/C Salary A/C Return Inward A/C Return Outward A/C Drawing A/C Sold to Suresh A/C  Traveling Expenses A/C Discount Allowed A/C  Telephone Charges A/C Sales to Raba Traders A/C

Accounting Vouchers In manual accounting, we record transactions through Journal entries. In computerized Accounting systems we do it through Voucher entry. Normally, a transaction is supported by a Document, e.g., Supplier’s Bill, Copy of Sales Bill , Counter foil/ Record Slip entry of  Cheque book , Pay -in-slip , Pay Register etc. For every transaction/ source document, we should enter a Voucher. A voucher contains details of the transaction. Particulars If you create Accounts voucher 

In this field you should specify Dr or Cr. Type the letter D or Dr over the existing prompt to change, then select the ledger name from the pop-up list that Tally opens.  There may be multiple Debit and Credit entries in one single voucher. If you create Inventory voucher 

If you are creating inventory voucher in Tally you will give information about the stock item you receive or issue and item related details like the Godown/warehouse, Batch Details, Quantity, Rate, Amount etc. Debit / Credit Amount:

 This field appears in Accounts voucher only. Enter the amount of transaction and press Enter key. Tally will update current balance of the ledger and display it. This will happen only if you gave 'Yes' to the question 'Show Ledger Current Balance?' under Accounting Voucher in Vouchers Entry under F12: configure option. The total will appear on the bottom of the Debit and Credit columns. If both credit and Debit totals are not equal Tally will prompt to enter further Credit / Debit to balance the voucher. If both are equal Tally will move the cursor to Narration field.

After entering narration, when you press Enter key a confirmation prompt will appear Asking 'Accept Yes/No?'. Press Y or Enter to save the voucher or press N to return cursor to the first entry allows you to alter any data in the voucher. If you give  Y Tally will save the voucher and blank screen will appear next to continue voucher entry. Voucher Types in Tally: Payment voucher:

 The payment voucher is for all payments you make through cash or Bank. These payments can be towards expenses, purchases, to trade creditors, etc. Follow the below procedure to create a payment voucher. All payment vouchers must have first entry a debit and at least one credit to a Cash or a Bank Account. You can have any number of debit and credit entries. However, if  you do not credit one cash or bank account and still try to accept the voucher a message appears asking for a cash or bank account. If configured, Fund Transfer entries can also be made in payment voucher. If you have given Yes to 'Print After Saving Voucher?' in Voucher Type creation/Alteration Tally will print the voucher immediately after saving. Receipt Voucher

 The receipt voucher in Tally is for all receipts into the Cash/Bank account. The voucher is similar to the payment voucher except that you debit cash or bank A/cs and credit the ledger from which you receive. The first entry in receipt must be credit and at least one debit to a cash or bank account. There can by any number of  debit and credit entries. If you do not debit one Cash or bank account, a message appears asking you to rectify the entry.

If you have given Yes to 'Print After Saving Voucher?' in Voucher Type creation/Alteration Tally will print the voucher immediately after saving. Alternatively you can print any voucher later by going to Voucher Alteration screen using Display menu. Open the voucher and press Alt-P to display the 'Print Voucher' Screen. Give 'Y' to the Print? Prompt.

Sales Voucher

 The first entry must be a debit involving any debtor, bank or cash account and second should be a credit to ledger placed under sales account group. Rest of the accounts may be any Revenue account or any account under the Group current liabilities. Thus you can include Duties & Taxes from 3rd entry onwards. Purchase voucher

 The first entry must be a credit involving any creditor, Cash or Bank account and second entry should be a debit to a ledger placed under purchase account group. Rest of the accounts may be any revenue account or any account under the Group Current Liabilities Contra Voucher

 The contra voucher is for Fund transfers between cash and Bank accounts only. The following is the rule, For example, If you pay Rs. 10000 cash into State bank Account. Your contra entry should be like this, Particulars Debit/credit Cr. Cash Credit - 15000 Dr. State bank ac Debit - 15000

Credit Note:

Credit Note is raised when a buyer returns some goods that you sold him. or you give him credit due to rate difference or discount/rebate or when there is an exces debit to any party Debit Note:

 You create a Debit Note when you make purchase return or when you have short billed a customer or you are granted credit by your supplier due to rate difference, discount etc. Memo Voucher

 This is purely Non-accounting voucher. These entries will not affect your accounts nor does affect your final results. You can alter and convert a Memo Voucher into a regular voucher when you decide to bring the entry into your books.  You can use memo vouchers to make suspense payments, vouchers not verified at the time of entry, Items given on approval.

Exercise: 5

Journalize the following: No 01 2,00,000 02 03 04 05 06 07 08 09 10 11

Date

Transaction

01-02-2004 02-02-2004 03-02-2004 06-02-2004 09-02-2004 11-02-2004 13-02-2004 15-02-2004 21-02-2004 26-02-2004 27-02-2004

Maruthi & Sons Started business with capital of Rs. Paid into Indian bank Rs. 50,000 Bought goods for cash 14,700 Sold good to JJ Traders on Credit 7,000 Cash Sales 19,000 Received Commission 400 Received seven tables from Amirtha Stores at 500 each Bought goods from Vignesh 2,000 Paid cash to Amirtha Stores Paid rent 1,000 Paid Salary 2,500

Exercise : 6

 Journalize the following:

No

Date

Transaction

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

03-07-2004 05-07-2004 10-07-2004 15-07-2004 17-07-2004 18-07-2004 20-07-2004 23-07-2004 25-07-2004 25-07-2004 27-07-2004 28-07-2004 29-07-2004 29-07-2004 30-07-2004 31-07-2004

Peter started business with Rs. 75,000 Goods purchased 6,000 Good sold Rs. 8,000 Goods purchased from Mathew Rs. 21,000 Goods sold to Sanjay Rs. 24,000 Goods returned to Mathew Rs. 1,300 Goods returned by Sanjay Rs. 500 Opened an account with HDFC Bank Rs. 15,000 Drew from Bank Rs. 4,000 Furniture purchased Rs. 3,500 Sanjay settled his account Settled Mathew’s Account Insurance Premium paid Rs. 350 Electric Charges paid Rs. 250 Drew for Personal use Rs. 1,300 Salary paid Rs. 1,500

Exercise: 7

 Journalize the Following with invoice: HS & Co started the business from 01/04/2004

16/04/2004 16/04/2004 18/04/2004 18/04/2004 18/04/2004 18/04/2004 21/04/2004 21/04/2004 21/04/2004 21/04/2004

Credit sales to Kavitha & co 50,000 (Inv.No. 2) Cash Sales 20,000 (Inv.No. 3) Credit Sales to Ram & Ram 50,000 (Inv.No.4) Credit sales to Kavitha & co 50,000 (Inv.No. 5) Goods returned by Ram & Ram 5,000 (Inv.No.1) Goods returned by Kavitha & co 5000 (Inv.No. 5) Payment made by cheque to Kiran Traders 30,000 Ch. No. 161122 Payment made by cheque to Pooja Traders 30,000 Ch. No. 161123 Received cheques from Ram & Ram 75000 Ch. No. 320321 Received cheques from Kavitha & co 75000 Ch. No. 112310

Payment Made by cash: 26/04/2004 Paid to Petty cash by cash 1,000 26/04/2004 Furniture purchased 20,000 26/04/2004 Salaries paid 10,000 26/04/2004 Rent 4,000 26/04/2004 Electricity charges 3,000 26/04/2004 Telephone charges 3,500 26/04/2004 Cash Purchases 5,000 Payments Made by Petty Cash: 30/04/2004 Conveyance 150 30/04/2004 Postage 100 30/04/2004 Stationeries 200 30/04/2004 Staff Welfare 100 30/04/2004 Stationeries purchased from Jain & Co 1500 on Credit 30/04/2004 Depreciation on Furniture 10% Answer: Balance Sheet Total Rs. 3, 21,950

Memorandum Exercise: 8

25 Apr 2007 27 Apr 2007 01 May 2007 05 May 2007 25 May 2007 02 June 2007

Paid advance in Travailing Rs.10000 Paid salary advance Rs.3000 Paid salary Rs.3000 against advance Paid Traveling exp Rs.8900 against advance Paid rent Advance Rs.5000 Paid rent against advance

Voucher Types: By default Tally 9 provides 18 types of Vouchers (with out counting payroll vouchers) for recording different natures of transactions. However, if you require further Voucher Types that function like the one of the existing type, you can create New Voucher Types and give different Voucher Numbering series.

To identify a voucher uniquely, normally every voucher is given unique number. The number may be allotted by the user, or can be automatically generated by Tally, according to options set in voucher Types under Accounts Info.  Tally provides provides three three options options for for voucher voucher numbering numbering 1)

Auto Autom matic atic 2) Ma Manu nual al 3) None None

If Automatic is opted for the selected Voucher Types, Tally allots incremental number and cursor would not move here. And we cannot change the voucher number. If Manual is specified for the selected voucher type, cursor would blink at the voucher number field to input from keyboard. We can modify the voucher Number If none is opted for the selected Voucher Type, voucher number field would not appear.

Features  Tally controls operational Features through F11: Features button. F11:Fe F11 :Featu atures res but button ton app appea earr alm almos ostt in eve every ry scr screen een upo upon n sele selecti cting ng a company. We get same option irrespective irres pective of screen where we launch lau nch it. Feature Featu re settings are company speci specific. fic. We can acti activate vate an option for one company and deactivate the same for another company.

Accounting Features - 11 1.

Integrate Accou Integrate Accounts nts and Invento Inventory: ry: This optio option n basic basically ally affec affects ts accounts. If we se sett th thiis opti tio on to Yes es,, the va vallue of st sto ock is automatically computed computed on the basis of Inventory Inv entory and posted in Balance sheet, Profit & loss a/c and we are not allowed to input the stock value value on our our own as the accounts are integrate integrated d with the Inventory Part. If we set No, our Accounts & Inventory remains separate and we have to input the value of closing stock in the ledger under Stockin-hand group which is posted in the Balance Sheet & Profit & Loss A/c.

Currency option would be available available at Accounts Info menu and in ledger creation we can specify currency for the ledger. In case we do not need foriegn currency curr ency option, we should respond No, that would keep, Accounts Info menu and ledger creation screen tidly. 4. Maintain Billwise Details: By default, Tally would maintain ledger wise balance and display net debit or credit balance for a ledger. If we receive or grant credit on purchase or sales, mere ledger balance may not reflect the true state of affairs-as a ledger may show an amount due which may not be over due on that date. By maintaining maintaining Bill wise wise details, we can get bill wise outstandi outstanding ng ,compute bill wise overdue overdu e interest , In case case we need these features, respond respond  Yes to this option that would allow to selectiv selectively ely option to maintai maintain n Bill Wise Deta De tail ils s fo forr ledg ledgers. ers. In ca se mer e led ger ba lanc es is suff icie nt to m eet ou r requirement. Respond No to keep the ledger creation screen more sleek. 5. Maintain Cost Centres: If we wish to make cost centre wise allocation, respond Yes that th at would activate Cost Centres option which we would get in Accounts inof menu 6. More than One cost Category: I f we r e s pond Yes to t he a bo ve option option,, we are asked this question. If we wish to allocate allocate a transaction transaction to more than one set of cost centres simultaneously, respond Yes that woul would d activate Cost Category option under accounts info menu and we would be able to allocate to multiple set of cost centres. 7. Interest Calculations:Interest is re-calculated with every change in balance outst outstanding. anding. The Cr in the interest inte rest amount should sh ould not be confuse confused d to mean an Income. It only means that it is payable and is a liability. 8. slip.

Maintain Payroll: If we set this option to yes, we can create a employee pay

9. Allow Invoicing: If we set this option to yes, we can enter sales transactions transact ions in Invoice Invoice mode also if we respond respond No, we will will ne restricte restricted d to enter sales transactions in voucher mode only. 10. Maintain Budgets and Controls: If we wish to use Budget to compare with actual or other budgets and a nd get variance or set Credit Limit for party,set this feature to yes. When When we set this feature feature to yes, Budget option would be avaliable at Accounts info and Credit Limits under Accounts Info-Ledger menu. In case we do not need to use Budgets or credit limits, set to No. 11. Use Reversing Journals & Optional Vouchers:If we set this option to yes, It would be enable to voucher entry. 12. Allow Zero valued entries: If we need to make Voucher entires whose monetary transaction value is 0, respond yes (For example, to prepare an Invoice for sample of zero value), otherwise respond No. 13. Enable Cheque printing : You can choose to write cheques directly from Tally. Cheques will be printed when printing a Payment Voucher. Vouche r. However, first activate the capability and set dimensions

Multi-Currency Organizations who transact in multiple currencies need to record transaction in the currencies they transact with. We can create and transact in any currency. We can also enter selling and buying rate of different currencies.

Symbol

:

Enter currency symbol

Formal Name

:

Enter the name of currency, must be different from the symbol.

Numb Number er of Deci Decima mall plac places es

:

Ente Enterr the the numb number er of deci decima mall plac places es for for the the Currency.

Rate of Exchange:  Thee screen screen always always comes up in Alter Alter mode. mode.

Rate of Exchange:

It operate on day-to-day

Stan Stand dard ard Rate Rate

The The stan stand dard ard rate rate is used used to calc calcul ulat ate e vari varian ance ces s from from

:

 The actual actual transacti transaction on rates rates Selling ing Rate Rate

:

Ente Enterr the rat rate at which we are sel selling the the curre rrency to our money exchange.

Buying ing Rat Rate

:

Ente Enterr the rat rate at which we are buying the curre rrency from our Banker or Money Exchanger.

Come to voucher entry → Press F5 → Payment → Payment is made to Krishna  Traders in Dollars Dollars that that is 50 dollars. dollars. The entry entry is passed as shown shown below below :

Once enter is pressed in the amount column the Dollar gets converted to Rupee as on the date of voucher Entry as shown below and the amount is displayed based on Rupee currency.

Exercise: 9

Mr. Laxman started a business in the name of Laxmana Traders on 1/5/2005 02/5/2005 Received capital from Murali 1000 Dollars. 02/5/2005 Standard rate Dollars 67,68,65 03/5/2008 Purchased items from Vimal & co for 150 Dollars 03/5/2008 Standard rate Dollars 61, 63, 60 06/5/2008 Sold goods to Raja & Raja for 75 Dollars 06/5/2008 Standard rate Dollars 46, 48, 47 08/5/2008 Received 70 Dollars from Raja & Raja 08/5/2008 Standard rate Dollars 58, 59, 57

Exercise: 10

Create currencies for the following:

$ (Dollar) # (Frank) £ (Pound) ¥ (Yen)  € (Euro)

Standard Rate

Selling Rate

Buying Rate

62 45 72 58 82

63 47 73 60 83

60 46 72 59 82

27.2.2004 Sold to Peter Steel Enterprises € 200 28-02-2004 Peter Steel Enterprises settled his account. 28-02-2004 Drew from Bank Rs.10, 000

Cost Categories and Cost Centres By providing cost centre, a transaction can be allocated to it which would then enable extraction of all transactions for a cost centre. Hence, a cost centre can be said to be any unit of an organization to which transactions can be allocated when only costs or expenses are allocated to these units; they are referred to as cost canters. F11-Featrues→ Set yes to two options Maintain Cost centre

yes

More than one Cost Category

yes

Steps Involved:

Cost Categories

→

Single

→

create

Name: Department Allocated Revenue Items: yes Accept

→

yes

Cost Centre→Multiple Cost Centre

Create

→

Under Cost Centre: All items. In Category Column → Select Department Under Name of Cost Centre Accept

→

yes

→

Type the different types of Cost Centres

By Salaries Rs. 45,600

Once we press enter we get the following screen, select Cost Category, then select cost centres and type the salary amount incurred for the different departments as shown below:

 Type to cash → Type the Narration

→

Accept Yes

COST CENTRE CLASS Cost Centre Classes affect all voucher types. In voucher entry, the alloc ation scre en would not appea r, but alloca tion would be made automatically.

Steps Involved: 1. Press F11 -> Features -> Maintain Cost Centres and more than one cost category options should be set to Yes. 2. during entry 3.

press F11 -> Features -> Pre-defined cost centre allocation set Yes.

The following screen appears.

5.

Select the name of the cost category as Department , select Cost Centres and type the Percentage of allocation for each department. The percentage should be typed by us. Press Enter Accept Yes.

6.

Come to Voucher Entry. Press F5 -> payment -> Under Cost Centre Class -> Select the name of the class as Expenses allocation.  Then pass the entry.

 To view the Allocation of Expenses under different Cost Centre: Display -> Statements of Accouts -> Cost centres

Exercise No: 11

Cost Category: Chennai Cost Centre: Marketing, Finance, Administration

01/4/2005 Paid Salary Rs.28, 000 (M-10, 000, F-10, 000, A- 8,000) 03/4/2005 Paid Rent Rs. 8, 000 (M-2, 300, F- 2,200, A- 3, 500) 17/4/2005 Paid Stationeries Rs. 3,000 for all departments 24/4/2005 Paid Electricity charges Rs. 12,000 (M-4, 000, F- 3,500, A- 4,500) 30/4/2005 Paid Sales Tax Rs. 1,650 for all departments 01/4/2005 Paid Income Tax Rs. 1,800 for all departments

Exercise No: 12

Cost Category: Department Cost Centre: Account, Purchase, Sales, Computer

Date

Expenses

Accoun t

Purchas e

Sales Compute  Total r

03/5/05

Electric Bill

2000

2000

1400

5000

1040 0

05/5/05

Rent

1500

1500

300

3000

630 0

07/5/05

Interest

500

200

150

85 0

05/5/05

Wages

500

200

70 0

09/5/05

Stationery

250

50

12

100

0 13/5/05

Salary

25/5/05

Postal Charge

27/4/05

T l

4500

2000

3000

400

52 0

4000

1350 0

150

55 0

Bill

1300

300

200

1500

330

Bill-Wise Details By activating the Bill wise feature in F11: Features, the ledger masters under Sundry Debtors and Sundry Creditors automatically displays an additional option called Maintain balances bill-by-bill. On setting this option to Yes, you get an additional option Default Credit Period. When you enter details of sales and purchases with Bill-wise turned on, Tally prompts you to identify the invoice with an appropriate reference number.  The reference can then be used to allocate payments to the correct invoice to maintain an accurate account of outstanding. Bill-Wise Types: New Ref:

 To enter new credit purchase or new credit sales value Advance

 To settle payment or receipt before purchase or sales Against Ref:

 To settle payment or receipt against purchase or sales On Account

 To settle an opening balance to study party Creation of Bill_Wise_Details: F11: Accounting Feature: Maintain Bill-wise Details? Yes (for Non-trading A/c s also) No Ledger creation: Purchase → Purchase A/c Ram & Co → Sundry Creditor

Report: Go to Gateway of Tally > Display > Statements of Accounts > Outstanding> Receivables/Payables. Exercise No: 13

Capital 2, 50,000 Sundry debtors Milky (P)Ltd 5160

Bill No S/01-02/301 S/01-02/304 S/01-02/309

Date 27/01/02 26/02/02 27/03/02

Amount 1430 1730 2000

Due days 30 30 45

Sundry Creditors Praveen & Sons 7050

Bill No C/01-02/1248 C/01-02/1252 C/01-02/1282

Date 26/01/2002 21/02/2002 25/03/2002

Fixed Assets Furniture Computer Opening Stock Cash in hand SBI

Amount 1500 4050 1500

30,000 40,000 10,000 70,000 1, 01,890

Voucher Entry: Sales bill

Milky (P)Ltds Bill No 202 214 256 301

Date 30/04/02 15/05/02 31/07/02 28/10/02

Amount 1430 1500 3640 2750

Due days 30 30 15

Due days 30 30 45

815 30/03/03 Purchase bills

2130

30

Praveen & Sons Bill No 0001 0002 0003 0004 0005

Date 03/04/02 05/05/02 16/08/02 22/11/02 31/03/03

Amount 455 1000 1675 4050 12350

02/02/03 15/02/03 24/02/03 31/03/03

11450 5540 875 1234

Due days 15 30 30 45

Malar & Co 0006 0007 0008 0009 Received cash

Milky (P) Ltd Bill No 304 214 301 351

Date 02/05/02 17/06/02 01/11/02 31/03/03

Amount 1730 1500 2750 4000

Kamal & co 417 452 515 659

30/4/022230 20/8/025000 31/1/03 10000 25/1/031530

Payments Made

Praveen & Sons 1282 0001 0004 0005

15/5/021500 4/4/02 455 20/9/024050 30/3/0312000

Malar & Sons 0006 0007

5/3/03 10,000 15/3/035,540

30 15 15 30

Interest Calculations  The Activate Interest Calculation field is displayed in the Ledger Creation screen only if Activate Interest Calculations is set to Yes in F11: Features. Set this field to Yes for each specific ledger account for which interest is to be calculated. Simple Mode (Where advanced parameters are not applicable)

 To calculate Interest in the Simple Mode: 1. Go to Gateway of Tally> F11: Features > Set Activate Interest Calculation to Yes. > Set Use Advanced Parameters to No. 2. In the Ledger Creation screen set Activate Interest Calculation to Yes. 3. The Interest Parameters sub screen is displayed. Enter the Rate and select the interest style from the list. Interest calculation transaction by transaction

Interest calculated on Outstanding Balances. 1. Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)> Bank 

2. 3. 4. 5.

Ltd (bank account) Set Activate interest Calculation to Yes. Rate: 15%. Interest Style:. Of the four options, select 365-Day Year. Accept the screen.

 The Interest Calculations Report can be displayed and printed. Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger> Bank Account Interest calculation transaction by transaction

1. 2. 3. 4.

Alter a Customer account Set Activate Interest Calculation to Yes. Set Calculate Interest Transaction-by-transaction to Yes. Set Over-ride Parameters for each transaction to No.

 To view the Interest calculated Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger>  Advanced Mode (Where advanced parameters are applicable)

 The advanced parameters are particularly useful where interest rates change from time to time.

•

For Ledgers created under the Group Sundry Debtors/Sundry Creditors, the Interest Parameters sub-screen is displayed as shown below:

•

For Ledgers created under the Group Bank Accounts, or if the option Calculate Interest Transaction by Transaction is set to No, then the Interest Parameters sub-screen is displayed as shown below

 To view the report on Outstanding balances: Go to Gateway of Tally> Display> Statements of Accounts.> Interest Calculations> Ledgers> Bank Ltd. Advanced Parameters - Interest calculation transaction by transaction:  Activate and specify interest calculations in ledger masters.

[Credit period is 45 days, Bill no.24] Interest Rate 12% and 15% 6.6.2004 Sold goods to Kamalam & Co for a sum of Rs. 1,25,000 [Credit period is 45 days] Interest rate 13% and 18% 2.12.2004 Amount paid to Raabiya Traders plus the interest rate. 3.3.2005 Amount received from Kamalam plus the interest rate. Display the interest calculations from 1-06-2004 to 31-03-2005

Budgets Budgets are used to set targets and compare against actual and get variances. We can create multiple budgets for different purpose. Press F11-Accounting Features

→

Maintain Budgets and Controls- set yes

Creation of Budgets: Gateway of Tally

→

Accounts Info → Budgets→ create

On selection of create option, we get a screen as shown below

Name Under Period of Budget

: Enter a name of the Budget for identification : Primary : Given the period range of the Budget in the Columns From and To Press Enter → Under Ledgers → Type yes, the next screen appears and type the contents as shown below:

Account Name

:

Cost Centre  Type of Budget

: :

Name of the Group or Ledger for which the budget is created. Not applicable We get 2 options to select the type of Budget, namely

 To view the Budget, Go to Gateway of Tally → Display → Trial Balance → Press Alt + B → Budget Variance → select the name of the Budget → Press Enter

Exercise: 15 Expenses

Budget

Conveyance Wages Carriage Outwards Electricity Expenses Advertising Selling and Distribution

5,400 50,000 500 3,000 2,000 1,500

Enter the following entries for Budget and Controls

May 2005 Paid Conveyance Paid Wages Paid Carriage Outwards Paid Electricity Expenses Paid Advertising Paid Selling and Distribution

200 500 2,500 3,000 2,000 1,100

June 2005 Paid Conveyance Paid Wages Paid Carriage Outwards Paid Electricity Expenses Paid Advertising Paid Selling and Distribution

500 250 1,500 2,000 2,000 1,220

Bank Reconciliation Bank Reconciliation means that the accounts maintained by the banker tallies with

3. Bring the cursor to May and Press Enter. This brings up the vouchers for the month of May 2005

4. It is helpful to see the Narration as that contains cheque numbers and other details. So Press F12: Configure and activate Show Narration. 5. Since this is a Bank Account, an additional button F5 Reconcile will be visible on the right. Press F5 6. The display now becomes an Edit screen in reconciliation mode. The primary components are: A Column for the Banker’s Date •  The Reconciliation at the bottom of the screen, • Showing: Balance as per Company Books, Amounts not Reflected In Bank and Balance as per bank 7. Enter the bank date for the payment voucher and contra voucher. 8. The next time we come for reconciliation, we will be presented with only those vouchers, which remain unreconciled.

Exercise: 16

01/4/2005 Received Capital by Cash 1,00,000 02/4/2005 Cash deposited in SBI 50000

09/4/2005 11/4/2005 12/4/2005 15/4/2005 17/4/2005 30/4/2005

Sachin 5000 Amutha 7500 Sachin 10000 Amutha 4500 Kavitha 12000 Bank Charges 250

Pass Book of SBI as on 30/4/2005 Date

Name

Deposits (Dr) Withdrawal (Cr)

02/4/05 06/4/05 09/4/05 10/4/05 13/4/05 14/4/05 17/4/05 30/4/05

Cash Kiran Sanjay Kavitha Amutha Sachin Kavi Bank

50000 45000 25000

Balance 50000 Cr   95000 Cr   120000 Cr   105000 Cr   97500 Cr   87500 Cr   102500 Cr   102250 Cr  

7500 10000 15000 250

Exercise: 17 Jeevan & Co Started business on 1/4/2004 1/4/2004 Received capital by Cash Rs. 50,0000 1/4/2004 Cash deposited in Canara Bank Rs. 20,000 Following is the details of Deposit Slip (Sundry Debtors) 10/4/2004 Kabir 12/4/2004 Usha 14/4/2004 Syam 25/4/2004 Usha 29/4/2004 Kabir

40,000 25,000 20,000 15,000 10,000

Following is the details of counter Foil of Cheque Book (Sundry Creditors) 11/4/2004 13/4/2004 15/4/2004 17/4/2004 19/4/2004 28/4/2004 30/4/2004 D t

Ashima Textiles 12,500 Fashion Textiles 3,350 Silky 5,000 Ashima Textiles 10,000 Fashion Textiles 5,000 Silky 3,000 Bank Charges 100 N

D

it (D )

Withd

l (C )

B l

Optional and Post-Dated Voucher  This is another non-accounting voucher. Unlike a Memo voucher, this is not a separate voucher type. You can mark an existing voucher (for example, a payment voucher or a receipt voucher) as Optional. Press CTRL + L or click on Optional from the Button Bar. This button toggles with Regular. By marking a voucher Optional, the voucher does not get posted anywhere but remains in the Optional Register.  You can make a voucher type default to Optional if you need to create a new voucher type or alter an existing voucher type. Go to Gateway of Tally > Accounts Info > Voucher Types> select a Voucher Type> Set Make Optional as default to Yes. Enabling Optional Vouchers

1.

Go to Gateway of Tally

Select F11:Features > Accounting Features to display Company 2. Operations Alteration screen 3.

Set Use Rev. Journals & Optional Vouchers? to Yes.

4.

Accept the screen to save.

Use of Optional Vouchers

• If you do not want a transaction that is incomplete to affect the accounts, you can mark this as an Optional Voucher. Once the transaction is complete, modify the voucher and post it as Regular Voucher. For example, Performa sales invoice. In fact, an optional sales invoice prints as a Performa Invoice. • Optional Vouchers allow you to see the impact of transactions without actually posting them. • Optional Vouchers can be used to forecast future sales. For example, create a New Voucher Type - Sales Forecast. Record future sales projections using this voucher type. Let us consider the following example.

On 30th June you want to view the Balance Sheet as of today but June rent is not due for payment until the first week of July. This liability is not reflected in the Balance Sheet. To overcome this, enter an Optional Voucher dated 30th June. The above entry is made as shown below 1.

Enter Date

When you view the Balance Sheet, generate a report with the Optional Voucher included. The Optional Voucher should be already defined as a Scenario (Refer section on Scenario Management for more details). The voucher affects the report temporarily. Once you quit the report, Tally does not retain the Scenario details.  The next time you view the balance sheet, it will not include the effect of the Optional Voucher unless you include it.

Post-Dated Vouchers While entering vouchers, you can mark them as post dated. Tally will not update the vouchers in ledgers until the specified date is approached. This is useful to enter transactions that take place on a regular basis. For example, if you pay for something by installments, you can set up the payments in advance, and Tally will only enter them in the ledgers as they fall due. Mark vouchers Post Dated by using CTRL + T or click on Post dated button from the Button Bar. This button toggles with Current .

Accounting with Inventory Inventory accounting includes recording stock details, the purchase of stock, the sale of stock, stock movement between storage locations/ godowns and providing information on stock availability. With  Tally it is possible to integrate the inventory and accounting systems so that financial statements reflect the closing stock value from the Inventory system.  The Inventory system oper ates in much the same way as the accounting system. First we set up the inventory details, which is a similar operation to creating the chart of accouts although , in this case there is no pre-defined set of stock groups. Second, we create the individual stock items. which is similar to setting up the ledgers. Finally, We are ready to use vouchers to record the various stock transactions.

Stock items: Stock items are the actual items in stock, and we account for the issued and receipts of stock at this level.

Stock Groups: We classify stock items into stock group based on any common feature.

Stock Categories:  This is a useful Tally feature, Which allows us to classify similar stock items together across different stock groups, enabling us to obtain reports on alternatives or substitutes for a stock item.

Locations/Godowns: We can specify where the stock items are held, e.g., which warehouse shelf or rack, obtain stock repor ts for each Godown, and account for movement of stock between locations/Godowns.

Units of  measure: We will need to create units of measure for stock items. These can be simple units such as nos, metres, kilograms, pieces, or compound units, e.g., box of 10 pieces or 1 dozen is 12 nos.

Maintain Accounts with Inventory  Tally displays a pop-up list called Type of Company – this is how your books of accounts will be maintained.

Accounts only Select this only if you do not have any inventory transactions (suitable for professionals and corporate offices). Tally would not permit intrusion ofInventory related information that are not required. However, at a later date (if required) you can alter the information as Maintain Accounts-with-Inventory – Tally accordingly now provides all the inventory-related information.

Accounts-with-Inventory

Stock Groups Stock items can be grouped together under Stock Groups to reflect their classification based on of some commonality. Grouping would enable easy location and reporting of stock items in statements. Hence, items of a particular brand can be grouped together so that you can extract stock of all items of that brand. For example, create Stock Groups like Sony. Your stock items could then be Sony 3.5" disks, Sony tapes, etc. Classify the Sony products under the Stock Group Sony.

Creating Single Stock Group : Gateway of Tally→Inventory Info→Stock Group→Single Stock Group In the Name field→ Enter Sony In the under field → Select Primary Can Quantities of Items be Added? Set yes

Check the data is correct and press enter and Accept – Yes

Name Give the name of the stock group. Here we wish to create a group Sony. Under

group creation screen. Select group name from the Pop-up list of Groups for the Under Group

•

field. •

In Name of Stock Group type and enter sub group name.

•

In the next line type another group name and Accept -> yes.

Displaying and Altering Stock Groups Once created, stock groups can be displayed and altered in single and multiple mode. We can delete a stock group via single Stock group alter by pressing +. However. we cannot delete a stock group with sub-groups or stock items.The lower levels must be deleted first

Delete a Stock Group Note:You can delete a stock group only if it does not have any children under it. The children could be stock group or stock item or both. Gateway of Tally—>Inventory Info—>Stock Groups—>Single Alter  Press [ALT]+[D]to delete the stock group  You cannot delete a stock group from multiple mode.

Stock Categories: Stock Categories offers parallel classification of items. You may create Stock Categories like Floppy Disks and Floppy Drives. Require information like total stock of floppy disks or alternative items that could be used, these would be best available through Stock Categories. F11 Features: Maintain Stock Categories – Yes

Creating Single Stock Category: Gateway of Tally > Inventory Info > Stock Categories In the Name field→ Enter Floppy Disks In the under field → Select Primary

categories menu.

Display or Alter a Stock Category Gateway of Tally—>Inventory Info—>Stock Categories—>Single/Multiple Display 

Or Gateway of Tally—>Inventory Info—>Stock Categories—>Single/Multiple Alter 

Select the stock category whose particulars you wish to display. When you display or alter a stock category, the information entered while creating it is displayed. •

Display from this mode is for master information only. You will not obtain any balances for a stock category here. Use the Display option from the Gateway of Tally for display of balances and transactions.

•

In earlier days of computing, one would look at the master information for balances. Tally believes that balances are a logical consequence of the transactions; hence, they should be available with the transaction summaries.  You would find all summaries and details through the Display option in the main Gateway of Tally.

Delete a Stock Category  You can delete a stock category only if it does not have any children under it.  The children could be stock category or stock item or both. Gateway of Tally—>Inventory Info—>Stock Categories—>Single Alter 

Press [ALT]+[D]to delete the stock category

Units of  Measure  You will need to create units of measure for stock items. These can be simple units such as numbers., metres, kilograms, pieces, or compound units, e.g. box, where, say, one box equals ten pieces.

Create a Unit of  Measure  There are two types of Unit of measure: 1. Simple 2. Compound Select Units of measure from the Inventory info menu and select create the Units menu to bring up the unit creation screen.

Use the up arrow or backspace key to position the highlight in the Type field. Select Compound form the types of units Pop-up menu. Select doz as the First Unit. Type and enter 12 as the conversion factor. Select nos as the Second Unit and accept the data. Press enter to return to the units menu.

Displaying and altering units of measure Gateway of Tally > Inventory Info. > Units of Measure > Display/Alter Once created, units of measure can be displayed and altered. You can delete a unit of measure in the alteration screen by pressing [Alt]+[D]. However, you cannot delete a unit of measure that is part of a compound measure. The compound measure must be deleted first.

Godown Godown is the place to store goods. Tally allows us to create any number of  Godown and nest into any number of levels. F11 Features: Maintain Multiple Godowns? Yes

Creating single Godown: Gateway of Tally > Inventory Info. > Locations > Create

Name In the Name field, give the name of the location.

Address Give a address of the godown, if required.

Under Give the location under which this location is to be sub-grouped. Use [alt]+[C] to create the parent location. Select primary if it is not a child of any location.

Allow Storage of  Materials?  Tally permits you to create a location/godown where you may not store materials at all but treat it as a virtual location. Virtual location are useful in case like Head Office which may have many different stock points under it that s tore materials. Hen ce, Head Office acts li ke a primary group location. Or , for example, designate London as a virtual location with Wimbledon Warehous e, Harrow Wareh ouse, Brixt on Wa re house as sublocations/ godowns. These sub-locations or godowns will allow storage of materials.

Displaying and altering stock godowns Once created, stock locations can be displayed and altered in single and multiple mode. You can delete a stock location via Single Location Alter by pressing [Alt]+[D]. However, you cannot delete a stock location with sub- locations. The lower levels must be deleted first.

Stock  Item Stock items are the actual items in stock, and we account for the issued and receipts of stock at this level.

Stock items are the actual items in stock, and we account for the issued and receipts of stock at this level.

Delete a stock item  You can delete a stock item only if it has not been used form transaction entry. Gateway of Tally > Inventory Info > Stock Items > Single Alter  Press [ALT]+[D] to delete the Stock Item

Stock Group

Exercise No: 18

a)  Journalize the following Transaction in the Book of Anandha Stores 2007 Aug

01 Anand Started the business Rs.7,00,000 08 Anand Deposit into the Indian Bank Rs.25,000 10 Purchase 100 kg Ponni Rice per kg Rs.20.50 19 Purchase from Rasi Stores 200 kg Ambai 18 per kg Rs.17

Sep

02 Salary for staff Rs.4,500 05 Paid Rent for Rs.5,000 15 Purchase 50 lit Gingilly Oil per lit Rs.98 17 Purchase 300 Hamam soap (100g) per soap Rs.13 Paid Stationery Rs. 450

29 Sold to Jeya Traders, 50 kg Ponni Rice Rs.22 45 kg Hamam Soap (150g) Rs.20 Nov

03 Sales Ambai 18, 50kg per Rs.18 and 75 Lax Soap per soap Rs.13 to Laxmi Store 5 6 12 18 23 24 28

Dec

Sales 10 lit VVD Coconut Oil per lit 80 Paid Salary Rs.4,500 Purchase Weight Machine Rs. 8,000 Sales 35 lit Gingilly Oil per lit Rs.99.50 Paid Telephone Bill Rs. 1,200 Return by Jeya Traders14 kg Ponni Rice Sales 15 Hamam Soap(100g) for cash per soap Rs.15

05 Amount Settled by Jeya Traders 7 Paid to Haji Store Rs.1,000 8 Paid Salary Rs. 4,500 15 Purchase 20 lit Gingilly Oil Rs. 98

Stock Group: Rice, Soap, Oil

b)  Journalize the following Transaction in the Book of Rahuman & Sons 2006 Oct

01 Started business with Capital Rs. 10, 00,000 2 5 6 7

Opened a Bank account in HDFC Rs. 1,00,000 Purchased Stationery item for Rs.5,500 Purchased Furniture for Rs. 23,000 Credit Purchased from Guru Store Inv. No. 123  Television

Rs. 6,000

10 nos

Fridge

Rs. 8,800

15 nos

Audio System

Rs. 4,500

5 nos

10 Credit Purchased from ALM Traders Inv. No. 124  Television Fridge

Rs. 6,500

3 nos

Rs. 7,900

5 nos

20 Sold Goods to Varun & Co on Credit  Television

Rs. 7,000

10 nos

Fridge

Rs. 9,000

15 nos

Audio System

Rs. 5,500

5 nos

22 Paid Telephone Charges Rs. 1000 23 Received cash Rs. 16,000 from Varun & Co 24 Paid made by Cash Paid to Petty Cash Rs. 2,000 Salaries

Rs.10,000

Wages

Rs. 7,000

Carriage Inward

Rs. 1,500

26 Payment Made by Petty Cash Conveyance Rs. 200 Postage

Rs. 150

Stationeries

Rs. 120

Staff Welfare

Rs. 200

Stock Categories Exercise No: 19

1.4.2007 Kishore Trading Company Started business with cash 80,000 4.4.2007 Paid into Bank Rs. 10,000 6.4.2007 Purchase from Uthira & Co (Inv.no. 111) Television

BPL Color TV

Rs. 7,000

10 nos

BPL Black & White Rs. 9,000 12 nos Sony

Rs. 12,500 10 nos

Samsung

Rs. 11,200 15 nos

9.4.2007 Purchase from Ruba & Sons (Inv. No. 122) Computer

16.4.2007Credit Purchase from Santhosh Electricals (Inv.No. 133) Fan Usha

Rs. 1,000

5 nos

Philips

Rs. 1,200

8 nos

20.4.2007Cash Sales (Inv.No.2) Computer HCL

Rs. 12,000

4 nos

LG

Rs. 10,000

4 nos

Usha

Rs. 1,000

2 nos

Philips

Rs. 1,200

4 nos

Fan

22.4.2004 Paid into Telephone Charges Rs. 1,000 24.4.2004 Cash Purchase Mixci Kanchan

Rs. 1,200

5 nos

Preethi

Rs. 1,500

5 nos

Butterfly

Rs. 1,000

5 nos

26.4.2004 Payments Made by cash Paid to Petty Cash Rs.20, 000 Furniture

Rs. 1,500

Salaries

Rs.10, 000

Wages

Rs. 7,000

Carriage Inward

Rs. 1,500

27-4-2004 Payment Made by Petty Cash Conveyance

Rs. 200

Postage

Rs. 150

Stationeries

Rs. 120

Staff Welfare

Rs. 200

Godown Exercise No: 20

Godown Item

Rate (Rs.)

Pettai (kg)

Town (kg)

I.R. 20

18

1500

2000

Ponni

20

1000

1300

Basm ati

22

1000

1000

I.R. 8

17

2000

500

5.9.2007

Purchase from Samir Stores (Invoice No. 44) Godown

Item

Rate(R  Junction s.) (kg)

Palay (kg)

Black Gram

35

1000

1000

Green Gram

25

2500

1400

Wheat

18

1800

1500

8.9.2007 Credit Sales Laxman Traders (Invoice No. 1)

Godown Item

Rate(R  Junction s.) (kg)

Palay (kg)

Black Gram

38.50

500

450

Green Gram

26.50

2000

750

Wheat

20.25

1000

250

Sunflower Refined Oil

18

1800

1500

12.9.2007 Received cheque from Laxman Traders From 2,00,000 20.9.2007 Payment made by Cheque Samir Stores Rs. 50,000 Kalyan Store

Rs. 25,000

25.9.2007 Payments made by cash Paid to petty Cash Rs. 2,000 Furniture

Rs. 25,000

Salaries

Rs. 30,000

Wages

Rs. 25,000

Carriage Inwards Rent

27.9.2007

Rs. 4,000 Rs. 10,000

Electricity Charges

Rs. 5,430

Telephone Charges

Rs. 8,340

Payment made by Petty Cash Conveyance Rs. 250 Postages

Rs. 300

Stationeries

Rs. 250

Staff Welfare

Rs. 200

Vehicle Maintenance

Rs. 250

General Expenses Rs. 150 30.9.2007

Depreciate 10% on Furniture

Integrate Accounts with Inventory F11: Features ->F2: Inventory

Effect on Balance Sheet and Profit & Loss  Account 

 The option in F11:Features has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes, it brings the stock/inventory balance figures from the inventory records and provides a drill down to the Stock registers from the Balance Sheet. If it is set to No, it ignores the inventory books figures and picks up manually entered closing stock balances. Stock records often contain compensating errors caused by wrong allocation to items and the like. The feature enables finalisation of  financial books without waiting for reconciliation of stocks that may take time.

Allow entries

Zero

value

F11: Features ->F2: Inventory  To use zero values in vouchers, activate the feature in F11:Company Features.  There is usually no point in having a voucher that is totally without value. However, in some situations, zero values are required, for example,

Batch- wise Details Batch-wise details are given for maint aining batch information pertaining to stock items. The various options are activating batch-wise details, setting manufacturing date and expiry date. Manufacturing date and expiry date options can be used only in accordance with batch-wise details as per requirements. This is useful for business that deal in goods that have expiry dates like medicines, food and other edibles. During voucher entry, Date of manufacture of the product defaults to the date of the Voucher. Which can be changed but not to a date later than the voucher date. Expiry date cannot be a date prior to the voucher date.

 Tally walk - through to activate batch-wise details:

7. 8.

Create it under Stock Group - Ketchup (create the group if it does not exist . Put it under Stock Category ‘Sauces’.

9.

Activate the option “ Maintain in Batches” in that item.

10. Track date of Manufacture - yes 11. Use Expiry Dates- Yes 12. Alter Standard Rates - No 13. Rate of Duty - 5 14. Accept defaults for other options.

15. Create a ledgerAnantha Departmental Store under sundry Creditors 16. Get back to Gateway of Tally menu an go to voucher entry. 17. Press F9: Purchase. 18. Create the following entries. 19. Date: 02-06-2008. Purchase 150 nos form Anantha Departmental Stores 120.00. Purchase Invoice number AD/001 20. Credit period 20 days. 21. After we enter item an item allocation screen will appear, here enter batch no as AD/001 having manufacturing date as 02/06/2008 and expiry date as 1/2/2009. 22. Accept the voucher. Exercise: 20

Enter the following entries for Batches and Expiry dates:

2007 May

01 Kabir invested Rs. 5,00,000 02 Paid into HDFC bank Rs. 45,000 05 Purchase Computer Rs. 16,000

date 9-10-2007] Mohana & Co 14 Sales Viva 25 nos for Rs. 275 to Kavitha Store 15 Sales Rin 100 gm 230 nos for Rs. 21 to Kavitha Store 25 Purchase Liril 200 nos for Rs.22.50 [Batch no. Li302, Expiry date 11-10-2007] 28 Sales La Soap 6 nos for Rs. 12 and Liril 55 nos for 24 to Malar  Traders 2007 June

02 Purchase Maltova 250 nos for 220 [Batch no. M202, Expiry date 1-7-2007] from Rajiya & Co 16 Purchase Power Soap 300 nos for 12 50 [Batch no. P302, Expiry date 1-8-2007] from Mohana & Co 17 Paid Rent Rs. 3,000 18 Paid Telephone Bill Rs. 3,400 19 Paid Salary Rs. 13,000 20 Purchase La Soap 100 nos for Rs.11.50 [Batch no. L303, Expiry date 9-10-2007] from Mohana & Co 21 Sales Maltova 25 nos for Rs. 230 to Jerry Store 22 Sales Power Soap 230 nos for Rs. 13 to Jerry Store 29 Paid Electricity Bill Rs. 2,300 30 Withdraw Cash for Personal use Rs. 1,300

2007 Sep 2009]

04 Purchase Boost 50 nos for 230 [ Batch No. B203, Expiry date 25-911 Paid Salary 13,000 13 Paid Rent Rs. 3,000 23 Sales La Soap 60 nos for 13 [Batch no. L303, Expiry date 9-10-2007] 24 Purchase Lux 300 nos for Rs. 15 [Batch No. Lx304, Expiry date 11-112007] from Mohana&Co 25 Sales Lux 150 nos for Rs.16.50 to Nirupama Store

Use Different Actual & Billed Quantity  This option enables you to specify quantities, that are different from that delivered, when invoicing, and record the fact. It is possible that you have delivered goods but some of them are in dispute and your customer wishes to be invoiced for only the quantity that he agrees to. He may consider the rest later and would then like to be invoiced. On the other hand, the rest is so bad that it is useless even for you to take back. Hence, you can record the fact when raising the invoice without altering the delivery note or passing a rejection entry. Select this option if you have many such occasions. Normally, the Billed and Acutal quantity is same when we set the

option Use different Actual and Billed Qty to No in F11: Features. However the quantity deliverd/ received may be different from quantity billed ub same cases as:

i.

iii.

Free items are received or given.( Free & sold items are same. For example, 1 box of Surf Excel is given free on every 5 box of  surf excel. Free items are received or given. (Free & sold items are different). For example, one piece of 100gm Promise tooth pase given free on every 5 box Surf Excel.

iv.

The billing quantity is rounded off 

v.

Invoicing in Part.

If the Billing quantity is different from actual quantity, to enter both quantities in transaction, we need to activate option Use different Acutal & billed qty under F11: Features -> F2: Inventory . Consquently during transaction entry, we wil be prompted to enter 2 quantities, i.e., Actual and billed. Actual Quantity will update stock and Billed Quantity will be used to compute transaction value.

Exercise: 21 20.10.2006Purchased the following items from Omega InfoTech in an sale offer made by them. The offer was that on every purchase of 5 items one item is given free. He purchased the following items and agreed to make payment with in 10 days.

Items

Processors Hard Disks Printers Monitor

Purchased Quantity 25 20 20 20

Free of cost 5 4 4 4

Total Quantity 30 24 24 24

Rate

5200 3200 5100 10500

UPS

20

4

24

1700

25.10.2006Vimal introduced the sale offer and sold the following items on credit Paramount Services and Peripherals: Items

Processors Hard Disks

Purchased Free of Quantity Cost 25 5 20 4

Total Rate Quantity 30 6800 24 3500

Purchased Quantity 10 12 20

Total Quantity 14 16 24

28.10.2006I – Tech Peripherals Items

Printers Monitor UPS

Free of Cost 4 4 4

Rate

6000 11000 2300

Order With Tracking Number In Tally, order processing is linked to inventories. You can track the order position of a stock item, know what goods that were ordered have arrived, whether you have fulfilled the orders on time and what is the delay, if any. In this module, you learn how to record purchase orders, and to call the orders while entering a purchase invoice and likewise with sales orders and sales invoices. You will also learn how to display outstanding orders position and the effect of orders on stocks. Remember, orders do not affect financial records nor do they update inventories. Activate Sales and Purchase Order Processing in F11: Company Features. •

•

•

 Activate Tracking numbers in F11: Company Features, if it is not already activated. In this unit, you will use Not Applicable for Tracking Numbers. We will take up entries using Tracking numbers in the next unit. Create a stock item Bricks with unit of measure Pcs. This is tradeable item as well as to be used for construction. Stock will be maintained. Hence, Treat all Purchases as Consumed should be set to No. Create a Supplier - Universal Bricks with bill-wise activated and no interest calculation.

Purchase Order Processing Purchase Order details will also depend on configuration settings. Hence, have a look at the configuration and voucher types.  Activate Accounting allocations in Order Entry.

Enter a Purchase Order 

1. 2. 3. 4.

Return to Gateway of Tally. Select Voucher Entry->F9: Purchase ->Select Purchase Order(Alt+4) Voucher date: 15/12/08. Party's A/c Name: Universal Bricks Order No: The voucher number will be your Purchase Order number. This particular Order  No. field is an additional field to record order number if different from the voucher number. Name of the item: Bricks. (Once the name is given the Item Allocations subscreen pops-up that needs to be filled in.) Due on: 25/12/08 - The due date for delivery of the item. This will enable monitoring of  outstanding deliveries. The order can be split for delivery on different dates. Location: Warehouse. (in case multiple location feature is active, this field is required to be given, else it does not appear.) Quantity, Rate and Amount - 5000 Pcs @ 3 per Pc. The amount is calculated but is modifiable to enable rounding off.

5. 6. 7. 8.

Item allocation sub-screen: •

•

•

Next Item: Since no other item is required, press [Enter] on the blank field to take the cursor to the tax/expense field. Expense/Tax: Once the item details have been entered, you might specify tax to be charged and other expenses like freight, if any. The tax or expense has to exist as a ledger account or  it may be created using [alt]+[C]. Select Freight @3% on the item values. Narration: Optional.

Alter a Purchase Order  You can alter a Purchase Order by displaying it from a variety of places but is easier through the Purchase Orders Book or the Day Book. Gateway of Tally ->Display -> Day Book or Gateway of Tally, Inventory Books, Purchase Order Book.

Sales Order Processing :-Create Sales Orders Sales order entry is exactly like Purchase Orders. Sales Order details will also depend on configuration settings. Hence, have a look at the configuration and voucher types.

1. 2. 3.

4. 5. 6. 7. 8. 9.

Gateway of Tally->Voucher Entry ->F8:Sales ->Select Sales Order (Alt+5) Voucher date: 16/12/08. Party's A/c Name: Wimbledon Properties Order No: The voucher number will be your internal serial number. This particular Order No. field is for the customer's order number which is different from the voucher number. Enter  WP/5. Name of the item: Bricks. Due on: 26/12/08.The due date for delivery of the item. This will enable monitoring of  outstanding deliveries. The order can be split for delivery on different dates. Location: Warehouse. Quantity, Rate and Amount - 4000 Pcs @ 5 per Pc. Next Item: Since no other item is required, press [Enter] on the blank field to take the cursor to the tax/expense field. Expense/Tax: Once the item details have been entered, you might specify tax to be charged and other expenses like freight, if any. The tax or expense has to exist as a ledger account or it may be created using [alt]+[C]. Select or create Tax @ 17.5% to be charged on the item values.

Alter a Sales Order  You can alter a Sales Order by displaying it from a variety of places but is easier through the Sales Orders Book or the Day Book. Gateway of Tally->Display-> Day Book or Display, Inventory Books, Sales Order Book.

View Order position Stock summary is perhaps the best place to view the order position. Gateway of Tally -> Stock Summary ->Detailed [F1] Currently, all you see is the closing balances or stock in hand as on the last day of the period. However, you do not know how much stock is on order both inward and outward. if you knew that, you could take plan your stocks better and not lose out on orders. 1. 2. 3.

Press the Orders button [alt]+[F7] Select Sales Orders Outstanding Type No for Due orders only. You are now in Sales Order Outstanding screen showing On Order items. Of course, you have

4. 5. 6.

only Bricks on order  Select the line Bricks and press Enter. The outstanding Sales order for Bricks is detailed. Select F12:Configuration. Select Yes to all options.

You now see your Order Analysis with Sales and Purchase Orders outstanding position for the stock item Bricks. 1. 2. 3. 4. 5.

6.

Return to the Stock Summary screen Select Detailed Press [alt]+[n] Auto-Column Button. Select Orders & Stock Details. Remove Rate and item from display by configuring it using F12. This will enable all columns to fit in one screen. Take note of the change in figures. Can you accept an order for 2000 bricks ? You may further drill down into each column to view greater detail. In the Stock Summary screen, you can even bring up a new column using [alt]+[C] the New Column button and g et more options for detail. Experiment with Types of Values to get familiar with them. They are powerful and give great business information.

Adjust Orders You adjust orders at the time of raising delivery notes and invoices. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Select Voucher Entry Select Purchase -> Purchase Enter a Purchase invoice no UB/6 Voucher date: 25/12/08. Party's A/c Name: Universal Bricks Name of the item: Bricks. (Once the name is given the Item Allocations subscreen pops-up that needs to be filled in.) Tracking number : Not Applicable as goods are accompanying the bill. Order No: Select the order number. All fields are filled up. Now enter as you would normally in a Purchase voucher. Quantity, Rate and Amount - 5000 Pcs @ 3 per Pc. Expense/Tax: Freight @3% on the item values

Reorder Level Reorder Level signifies the quantity of a Stock Item in hand, after reaching which you must place orders for your supplies. The importance of Reorder Level arises from the desire to have sufficient stocks to service customer orders and, at the same time, not to unnecessarily accumulate stock.  Therefore, the points to be considered while deciding the reorder levels are as follows. o

 The lead-time for suppliers to deliver the stock.

o

 The delivery time specified by the customer.

o

 The stock-in-hand to satisfy orders in the meantime.

In simple mode, Tally accepts the quantities that you specify. In advanced mode, it considers the past consumption patterns to suggest reorder levels. You can however, choose to define your own reorder levels. You may also specify the minimum quantity of the item to be

ordered, either in simple or advanced mode.  The purpose of specifying reorder levels is to obtain a report that indicates the quantity of a Stock Item that you must order. Specifying Reorder Levels

Go to Gateway of Tally > Inventory Info > Reorder Levels Select a group of Stock Items from the List of Groups, to specify Reorder Levels for the Stock Items in the Specify Reorder Levels screen. For each item in stock, you can define a Reorder Level and the Minimum Order Quantity. If  you click Simple Reorder button, the consumption alternatives will not be available and hence you have to input the quantities. Note: The option Reorder Levels is displayed in the Inventory Info. menu only if Allow Purchase Order Processing is enabled in F11: Features.

 The Reorder level screen appears as follows:  The options that you have while defining Reorder Level and Minimum Order Quantity for individual stock items are as follows. Reorder Level/Quantity

Enter the level/quantity in this field. Advance Parameter for Reorder Level (Consumption for the Last)

 This field lets Tally calculate the reorder level/order quantity based on the total consumption in the past for a chosen period. Period

 The choices for periods are: Days, Weeks, Months and Years. Note that it is not the average consumption for the period but the total consumption. Enter zero (0), if you do not want Tally to calculate the reorder level based on the consumption of the item in the past. Criteria

Choose whether you want the higher/lower of the two, i.e., input/calculated level/quantity. Rounding Method

Specify whether the calculated level/quantity must be rounded and also the method of  rounding. Minimum order quantity

 You can specify the minimum order quantity required.

 Tracking Number  You were buying and selling goods or services where the stock would be affected when making the purchase or sales entry. Many businesses deliver stock with a delivery note or a challan. The bill is raised later. The bill has to be linked or tracked with the goods already delivered. In Tally, tracking numbers do the job. Tracking numbers allow Goods Receipt and Goods Delivery Notes for goods not accompanied by an invoice to be linked with the invoice that is raised later. Of course, Tally permits the opposite too. A bill can be raised first and the goods delivered. Again, tracking numbers do the trick.  Tally walk-through for using tracking numbers 1. 2. 3. 4. 5. 6. 7. 8.

Go to voucher entry. Select Purchase, Receipt Note. Enter the following transaction: On 12/12/98 - Ref GRN/UB - 1000 Pcs of Bricks received from Universal Bricks @2 per Pc. For Bricks, select Tracking Number GRN/UB and give item details. Press Enter on the blank Tracking number to return to the main voucher. Accept the voucher and Return to Gateway of Tally Select 'Display', 'Statements of Inventory', and then 'Purchase Bills Pending'.

Purchase Bills Pending screen: 1. Tally tracks down the Goods received but whose bills have not been received. 2. View the Profit & Loss Account and the Purchase Accounts. 3. Tally provides the purchase so that the profits are correctly arrived at. 4. View the Balance Sheet, Sundry Creditors. Has Tally provided for the liability? 5.  Tracking numbers - track bills with goods delivered Now go back to Voucher Entry 1.

On 15/12/08, you receive the purchase bill no UB/15 from Universal Bricks for their Delivery Note no GRN/UB for 1000 Pcs of Bricks @ 2 per Pc. You get 30 days credit.

2.

Select Purchase, Purchase Ref: UB/15 Cr Universal Bricks Billwise UB/15 30 days 2000 Dr Project Purchase

3.

Inventory Allocation

2000 2000

•

•

 Tracking Number: Select GRN/UB. Note UB/15 is also listed there. Do not select this. Accept the other information that is filled up. Press Enter on the blank  Tracking number to return to the main voucher.

4. Cost Centre is activated for Project Purchase. Select Projects and Assignments Category and Buildings Cost centre. 5. Accept the voucher. 6. Now go back to Purchase Bills Pending. Is there anything pending? Exercise No: 22

a) 1.4.2008 1.4.2008 5.4.2008 5.4.2009

7.4.2008

Received Capital By Cash Rs.5,00,000 Cash Deposited in SBI Rs.2,00,000 Purchase Order Made to Rahul Textiles [P.O.N0.101] Due 12.4 Cotton Sarees 50 nos at Rs.300 Chudithar 50 nos at Rs.400 Purchase Order Made to Kiran Textiles [P.O.N0.102] Due 15.4 Cotton Sarees 75 nos at Rs.300 Chudithar 60 nos at Rs.400

10.4.2008

10.4.2008 12.4.2008

Purchase Order Made to Sona Textiles [P.O.N0.103] Due 25.4  T-Shirts 100 nos at Rs.100  Jeans 100 nos at Rs.1000 Purchase invoice raised for the Order 102 [Bill No.1234] Received Materials For the Purchase Order From Sona Textiles [P.O.N0.103] [RN.NO 567]

15-4-2008

Returned T-Shirts 10 nos, Jeans 5 nos [RN.NO.567]

20-4-2008

Purchase invoice raised for Sona Textiles [Bill No.5678]

18-4-2008

Sales Order Received From Arjun Stores [SO.NO.111] Due Date 25/4

22.4.2008

27.4.2008 29.4.2008

Cotton Sarees 60 nos 500 Chudithar 40 nos 750 Sales Order Received From Brinkley Garments [SO.NO.118] Due Date 30/4  T-Shirts 60 nos 150  Jeans 60 nos 1300 Sales Invoice Raised For Sales Order NO 111 [Arjun Stores] + TNGST 4% Delivery Note Given For Brinkley Garments For Sales Order No.118 [DN.NO.556]

1-5-2008

5.5.2008

Returns From Brinkley Garments  T-Shirts 10 nos  Jeans 5 nos Sales Invoice Raised For The Delivery Note 556

b) Kiran Electricals Started Business of Electrical items 1.8.2002 1.8.2002 7.8.2002

10.8.2002

14.8.2002 19.8.2002

Received Cash For Capital Rs.8,00,000/Deposited in UCO Bank Rs.3,00,000/Purchase Order Made to Nithya Fan House [NO.124] [Due Date 14/8] Ceiling Fan 500 nos @ Rs.1500  Table Fan 500 nos @ Rs.1200 Purchase Order Made to Athi Electricals [NO.111] [Due Date 18/8] Ceiling Fan 150 nos @ Rs.1500  Table Fan 150 nos @ Rs.1200 Purchase Invoice Raised For Order NO.124 Received Materials For the Purchase Order NO.111 through Receipt Note NO.12

20.8.2002

Returned 10 nos of the Ceiling Fan & 5 nos of Table Fan For the Order NO.124

22.8.2002

Sales Order Received From Akshai Traders [NO.2,Due Date 1/9] Ceiling Fan 300 nos @ Rs.2000  Table Fan 300 nos @ Rs.1500 Raised Sales Invoice For the Order NO.2 with Sales Tax @ 4% Sales Order Received From ABI Traders [3.Due Date 10/9] Ceiling Fan 200 nos  Table Fan 200 nos Delivery Note Raised For the Order NO.3 Returned 5 nos of Ceiling Fan.Table Fan Sales Invoice raised For the Order NO.3

1-9-2002 2.9.2002

10-9-2002 12.9.2002 14-9-2002

 Track Additional Cost Of Purchase Normally, in case of purchase, taxes etc, are also considered to be part of purchase and we may wish to debit purchase account only for the entire cost. With this feature, without debiting separate account, we may get breakup of basic price as well as additional cost incurred, resulting into the Effective Rate on various inventory reports. For Example, Athi & Co purchased the following components CPU

50nos

15000

Keyboard

50nos

7000

At the time of purchase of components, they spent additional cost such as Carriage Packing charges

15000 2000

F 11 Features – Activate the options  Track Additional Cost of Purchase - Yes •

Create ledger Under Sundry Creditor Athi & Co

•

Create an Unit of Measure Nos as Shown below:

•

Create a stock item as CPU

•

Pass purchase Entry

After entering the purchase go to Display →Inventory Books → Movement Analysis → Stock Item Analysis → Select the Item

Exercise: 23 a)

On 1/1/2005 Received capital by cash Rs. 5, 00,000 On 2/1/2005 Deposited in ICICI Bank Rs. 2, 00,000 On 5/1/2005 Purchased from GTL 500 Nos. of Lux Soaps @ 15/No Sales Tax4% Packing Carriage

Rs. 500 Rs. 700

[Create bill no. Credit days 30] On 8/1/2005 Purchased from GTL 500 Nos. of Power Soaps @ 10/No Sales Tax

4%

Packing

Rs. 700

Carriage

Rs. 1000

[Create bill no. Credit days 30] On 20/1/2005 Purchased from GTL 200 Nos. of Arial Powder @ 50/No Sales Tax

4%

Packing

Rs. 750

Carriage

Rs. 1200

[Create bill no. Credit days 30] On 31/1/2005 Paid to GTL for all the products. Discount received 5 %

b)

Rahuvar & Sons purchased the following components CPU

100 Nos

15000

Keyboard

100 Nos

7000

Mouse

100 Nos

1500

IC Chips

150 Nos

1000

At the time of Purchase of components they spent additional cost such as Carriage  Tax

15,000 4%

Packing Charges

20,000

Labour Charges

5,000

Bill of Materials A Bill of Materials contains a list of items that make up another item. In other words, it is a list of constituent items for a product. Enable Bill of Materials Facility

 To activate or enable Bill of Materials go to Gateway of Tally, Click on F12: Configure and select Accounts/inventory Info from the menu. Now say yes to "Allow component list details (Bill of Materials)?"

A Bill of Material should be available while manufacturing an item. Hence, first enable manufacturing entries. This is done through a stock journal. Create a new manufacturing journal Create a new voucher type called Manufacturing Journal under Stock   Journal.

1. To create a new Manufacturing Journal go to Gateway of Tally. Select Accts Info, Voucher Type and then Create. 2. Give Mfg.Journal (Manufacturing Journal) as the name and under ' Voucher types' select Stock Journal. 3. Follow the normal Voucher type creation as explained earlier for the rest. 4. Select Yes for "Use as Manufacturing Journal" and accept the screen.

Create a Bill of Material

 You can create a Bill of Material (BoM) for any stock item. Typically, you would like to create a BoM only for those items that are being manufactured. You will specify a BoM at the time of creating a stock item or altering its master. Tally walk-through to specify its Bill of Materials  JC Computer Supplies decides to get into the business of Televisions. They want to assemble their own televisions and sell them. Therefore,

1. Create a stock item Television. Create it under a new stock group Home Electronics. 2. Unit of measure - nos. 3. Say Yes to "Set Components (BoM)?" 4. Once this is made to yes it takes you to a screen where you can enter 1 each for Unit of Manufacture and items VDU, Picture tube, IC Chips, Sound Card and aerial which are required for the assembly of one Television. These items do not exist. Create them and group them under a stock group Television Parts. Unit of  measure - nos.

5. Give Standard Cost for each of the items as follows:6. VDU - 2000, Picture Tube - 3750, Sound Card - 500, IC Chips - 5000, Aerial 300. 7. You propose to store them On-Site. Accept the screen. Accept all other defaults. None of the items will have any opening stock balance.  The purpose of creating a bill of material is to enable consumption of the materials in the ratio specified when the product is manufactured. Tally uses a Manufacturing  Journal to enter goods manufactured with bill of materials. First you should purchase the components required to produce the television. Make a purchase voucher entry as follows: On 21 December 08, bought 10 pcs each of the following at the standard cost mentioned against them:

1. 300.

VDU - 2000, Picture Tube - 3750, Sound Card - 500, IC Chips - 5000, Aerial -

Paid cheque from Current Account immediately. Stored On-Site. Account Purchases. Ignore Tax. Manufacturing Journal Entry

From the Gateway of Tally Menu select Voucher Entry, As you have created new voucher type Mfg. Journal, a pop-up menu will show both the default Stock journal and the manufacturing journal.

1. Select manufacturing journal. 2. Under the Name of Product to be manufactured, type Television. 3. Manufacture it in the On-Site. 4. Quantity to be manufactured - 5. 5. Under Component (consumption) the component list for the television to be manufactured under proportionate quantity of each component is picked up automatically. The default location as specified in the BoM is also given for each component. The standard cost is picked up for each item. However the entire component list can be altered. 6. It will take you to the screen giving the details of additional cost. Under Additional Cost Components you may specify the additional cost incurred for producing the item. Additional cost of Wages - 3000 and Power - 2000 have been incurred. Add them in. If ledger accounts for these expenses do not exist, create them under Direct Expenses. 7. Note that the additional costs entered for the Iedgers, do not reflect in the relevant ledger with the amount but only add to, the cost of the item.

Exercise : 24 a)

Stock Item VCD Player Components

Aerial

Rs.2, 250

IC Chips

Rs.1, 200

Speaker (2 nos)

Rs.1, 500

On 19-08-2007

Manufactured 250 Nos of VCD Player Additional cost Power

Rs. 20,000

Wages

Rs. 15,000

b)

Moorthy &Co purchased the following components for used Switch Boards: 1. 12×8 Wooden Board

1 No.

18.00/no

2. Switches

4 Nos.

15.00/no

3. 2pin plug point

1 No

20.00/no

4. 3 pin plug point

2 Nos

25.00/no

On 10/5/2004 They manufactured 100 units of switch Boards Additional costs incurred are as follows: Wages Power

15000

10000

At the time of Purchase of components, they spent additional cost such as Carriage

5000

Tax

4%

c)

Manu &Co purchased the following components for used Computer: 1. Mother Board

1 No.

6,900

2. SMPS

1 No.

4,780

3. Hard Disk

1 No

4,900

4. RAM

1 No.

2,500

5. Floppy Drive

1 No.

550

6. CD Drive

1 No.

1,280

On 10/5/2004 They manufactured 10 Numbers of Computer Additional costs incurred are as follows: Wages Power

3, 000

2, 000

Price List This feature is provided in Tally to allow different pricing structure for the same item depending on their quantity of purchase or sale.

Activate and create Price List Types

1. 2. 3. 4.

Press F11: Features. At the bottom the last option is Set/Modify Other Company Features. Type Yes. Activate "Use Multiple price levels for invoicing". Tally takes you to "Company Price Levels" screen. Type the different price levels - Retail Sales, Export Sales and Whole Sale and accept the screen. Accept all the features and return to Gateway of Tally.

Create a Price List

1. 2. 3.

4. 5. 6.

7.

The following are the steps to create a price list. Simply go through them but create the price list in the exercise. From the Gateway of Tally select Inventory Info and Click on Price List. Select the required stock item group from the List of Groups or you can even select All Items if you require to set the price list for all the Stock Items you have created. Now the Price List screen is displayed. Select the price level from the pop - up for e.g. Retail Sales and enter the date from which your price list is applicable. Enter the Quantity, Rate and the Discount % for the respective items.  You will find the Standard Cost Price of the items displayed on the extreme right of the screen

More than one Price level can be entered for a single Stock Item.

Note: These prices will automatically appear while making an Invoice once the price level is specified.

When we change the price list with a new 'applicable from' date, the previous prices given for the item will be shown in the Historical Details column. Now the customer ledger accounts have to be altered to put them in the relevant price level. a)

Retail Sales

Bronze

8 Less than 10 Nos. 10 Nos. to 25 Nos. From 25 onwards

Rs.65 Rs.65 Rs.65

5% 10%

Less than 10 Nos. 10 Nos. to 25 From 25 onwards

Rs.80 Rs.80 Rs.80

5% 7.5%

Rs.100 Rs.100 Rs.100

5% 8%

Rs.55 Rs.55 Rs.55

5% 10%

Rs.75 Rs.75 Rs.75

5% 10%

Gold 8

Silver 8 Less then 10 Nos. 10 Nos. to Nos. From 25 onwards Whole Sales Price

Bronze 8 Less than 10 Nos. 10 Nos. to Nos. From 25 onwards Gold

8 Less than 10 Nos. 10 Nos. to 25 Nos. From 25 onwards Silver 8

Less than 10 Nos. Rs.95 10 Nos. to 25 Nos. Rs.95 5% From 25 onwards Rs.95 8% On 02-06-2007 Purchased 50 Nos of Gold 8, 25 Nos of Silver 8, 22 Nos of Bronze 8. On 04-06-2007 Sold to Tirumathi & Co 25 Nos of Gold 8, 15 Nos of Silver 8, 10 Nos of  Bronze 8. (Retail Sales) On 16-06-2007 Purchased 25 Nos of Gold 8, 25 Nos of Silver 8, 25 Nos of Bronze 8 On 25-06-2007 Sold to Jeba & Co 5 Nos of Gold 8, 5 Nos of Silver 8, 10 Nos of  Bronze 8 (Whole Sales)

b) Export price

Cotton sari

Less than 50 Nos.

Rs.700