introduction of Tally 9.Part(2)Tally Full knowledge

Split Company

Split financial Years:-

Presence of old data in cases where they are voluminous causes greater overhead on the system. Splitting financial years enables you to retain most benefits while overcoming this overhead. When you split the data, two things happen:

Ø New companies are created for the respective split periods.

Ø Full data is retained in the original company.

Before you split data, ensure that :-

Ø All unadjusted forex gains / losses have been fully adjusted by journal entries. Verify that the item does not appear in the Balance Sheet.

Ø There are no Purchase Bills /Sales Bills to come. Check the Profit & Loss Account and Inventory Statements Purchase / Sales Bills Pending. You may account them to the respective party accounts or to respective ‘Bills Pending’ Account.

Ø Ensure that a back up of the data exists.

Splitting of Financial Years:-

Ø At the Gate way of Tally, Select [Alt]+F3: Comp. Info.

Ø Select Split Company Data.

Ø Select the Company whose data is to be split.

Ø Splits occur in sets of two periods. Hence, start with the latest. For example assuming that data from 1-9-2009 to 31-08-2010 for a company and you want to split them First, select the beginning of the latest financial year.

Ø On confirming the activity, two new companies will be created one with data from 1-4-2009 to 31-03-2010, and the other from 1-09-2009 to 31-08-10.

Your historical data, whether of one or more financial years, will be preserved as one company, and your current financial year, as another. All the companies are full companies in their own right. Data can be entered, displayed and altered. You will also need to alter the names of the two freshly created companies to suit you.

Group Creation

Groups are accounting or we can say that Groups are collection of ledgers, which are same in their characteristics. You have to define the group whenever you will create a Ledger so that it can be identified that balance of the particular ledger is to be transferred where. For example: If we create the ledger in the name of ABC Tally cannot identify itself that whether this A/c is Exp. / Income/ Asset/ Liability. It can be identified only through the group from which it belongs to.

Tally provides us 28 reserved groups. These groups are created as we create a new company. These groups cannot be deleted. Out of 28 groups 15 are Parent/ Primary groups and rest of 13 groups are called Secondary/ Sub group. These 13 groups belongs to the above 15 groups. Groups are related with:-

1) Income

2) Expenditure

3) Assets

4) Liabilities

Depending upon the nature of business or as per our conveniences we can create as many new groups (Primary and Secondary) as we required.

Accounts Info → Groups → Multi Groups→Alter →Name of Group (All Items)- 28 GROUP

CAPITAL GROUP

Capital Account:-

Ledger Accounts for owners Capital may be placed under Capital Group (or its sub–group). Common example of Ledger Accounts under Capital Account group is Share (or Equity) Capital, Partners’ Capital Accounts, Proprietors Capital Account. Members Capital A/c etc. Separate Ledgers may be created for Equity Capital, Preference Capital A/c etc.

Reserve & Surplus (Retained Earnings):-

It’s a child-group to Capital Account. All Reserve Accounts (referred as Retained Earning) are placed under this group. Common examples are: General Reserve, Capital Reserve, Investment Allowance Reserve, Share Premium Account etc.

LOANS (LIABILITIES) GROUP

Bank OD Account {Bank OCC A/c}:-

While Current Bank A/c should be placed under Current Assets (explained later), Bank Overdraft and Cash/ Credit Accounts availed under Hypothecation, Bill Discounting etc. operated on a day-to-day basis should be placed under this group. Though these bank accounts may be a kind of secured loans, to allow transactions in Payment, Receipt and Contra Vouchers like normal Bank Accounts (although normally these are Secured Loan). The ledger accounts under this group particulars in the Vouchers in same manner like ledgers placed under Bank Accounts (under Current Assets), as explained later.

Secured Loans:-

Debentures, Term Loans (Medium/Long term), Secured Loans taken from Banks, Financial Institutes etc. against security (like mortgage/hypothecation, pledge etc.) should be placed under this group.

Unsecured Loans:-

Loans from outside Parties, Directors, Friends and Relatives (without any collateral security), Deposits etc., should be placed under this group.

CURRENT LIABILITIES GROUP

Duties and Taxes:-

This sub-group is for all Excise, Sales and other Trade Taxes. This head normally constitutes all the Duties & Taxes that you collect or pay through Sales & Purchase transactions, whose balance will appear in Balance Sheet. Examples are: Sales Tax (e.g., WBST, CST), Excise Duty, Marketing Fee, Purchase Tax etc.

Provisions:-

It is a place for all sorts of Provisions (like Provision for Bad Debts etc.) Place similar Provisions as applicable. However Depreciation, provided should go under Fixed Assets.

Current Liabilities:-

Place all other liability account (which are not candidates of any the above 3 groups), like Liabilities for Expenses, Employees contribution for ESI/PF or TDS realized from Contractors/Employees, etc.

Sundry Creditors:-

Place the ledger account of all Trade Creditors/ suppliers (even if any ledger account has Debit Balance at some point of time due to advance payment etc). If you sell to or purchase from same party, create only one ledger account and place under Sundry Debtors or Sundry Creditors Group (as convenient).

ASSETS GROUP

Fixed Assets:-

This constitutes all the Fixed Assets like Immovable Properties, Patents, Trade Rights etc, Work-in-progress (Capital Projects) etc. fixed Assets may have several subgroups for each type of assets if you wish to have separate Ledger Accounts for individual Asset. You may keep the figures of Original Cost and Accumulated Depreciation for Fixed Assets separately.

Investments:-

Place here all ledger Accounts related to Investment in Shares, Bonds, Govt. Securities and Investment in other companies.

CURRENT ASSETS

Stock-in-hand:-

Create all Ledger Accounts for Closing Stock under this group. Normally, you should create separate Ledger Accounts for Raw materials, Work-in-process and Finished Goods, as required.

Deposits Assets:-

Place all the Deposits made by the Company (Deposits received by the Company should be placed under Unsecured Loans) like Fixed Deposit, Securities Deposits, Deposits with Electricity, Telephone dept, Deposits in other companies, Rental Deposits etc. under this Group.

Loans and Advances:-

Place all Loans & Advances of non-trading nature given (Advances to Suppliers should be debited to the respective Supplier Ledger Account). Examples are: Advances against Salary, Loans to Employees, and Advances to Fixed Assets Suppliers etc.

Sundry Debtors:-

Place all the Trade Customer Ledger Accounts (even if Opening balance is Credit). If you sell to or purchase from same party, create only one ledger account and place under Sundry Debtors or Sundry Creditors Group. Advances received from Customers also should also be Credited to the Customer’s ledger under Sundry Debtors group.

Cash-in-hand:-

Tally creates Cash Ledger Account (Cash-in-hand) and places under this group. You may create more Cash accounts (e.g., Petty cash, Cash-at-Branch, Cash-in-Transit etc) and place under this group.

Bank Accounts:-

All the Bank Accounts like Current Accounts, Saving Accounts etc. (except Cash Credit, Overdraft or Loan Accounts) should be placed here.

Branch/Divisions:-

Place Ledgers for Branch, Division, Affiliate, Sister Concern, Subsidiary etc under this Group. It may help Inter branch reconciliation & consolidation. Tally permits Sales/Purchase transactions also (like Party Accounts).

Misc. Expenses:-

For Limited Companies, Preliminary, Pre-operative and similar expenses (to the extent not written off to Profit & loss A/c) should fall here. Though the accumulated Loss of a Company should also fall in this category, Tally treats it as negative Profit (Net Loss) and carries to profit & Loss a/c.

Suspense Accounts:-

This is a primary Group that appears in balance Sheet. You may create a Suspense ledger to record money paid/received whose details are not yet known. Later on the transaction is posted to the appropriate account. Example: Advance paid fro Traveling Expenses etc. details for which will be known upon submission of TA bills may be recorded in such ledger. As far as practicable, avoid using such Account.

Sales:-

All sorts of Sales should constitute this group. You may have multiple Sales Accounts. You may create separate accounts for Sales and Sales Return or club up Sales and Sales Returns in one Account-the net effect in Accounts however remains same. You may create different Ledgers for Sales according to tax Liability or Products or other criterion as per your reporting requirement.

Direct Income (Income Direct):-

This Group holds Ledger Accounts for Income considered for computation of Gross Profit. Professionals may place Ledger Accounts like Professional Service Charges or Servicing Charges under this group.

Indirect Income (Income indirect):-

Normally, all non-major revenues like receipts on account of Rent, Interest Commission, Dividend etc should be placed here. Ledger Accounts placed under this group are excluded for computation of Gross Profit but are considered for computation of Net profit only.

Purchase:-

This group holds all trade Purchases. You may create separate Accounts for Purchases and purchases return or club up Purchases and purchases returns in one accounts- although net effect in accounts remains same. Most often, Purchases Bills include various additional charges like Freight, Delivery Charges, Postage, Sales Tax, Excise Duty, etc., required for computing additional cost on Purchases should be placed here.

Direct Expenses (Expenses Direct):-

Place all ledger Accounts of Direct Expenses considered for computing Gross Profit/Loss, Example: Carriage Inwards, Wages etc.

Indirect Expenses (Expenses Indirect):-

All expenses considered for computation of Net Profit/Loss only (and not considered for computation of Gross Profit) should be placed here.

Example:-

Assets are two Types:

Tangible Asset:-

Ø Building 50,000

Ø Land 25,000

Ø Plant & Machinery 20,000

Intangible Asset:-

Ø Goodwill 15,000

Ø Patent 10,000

Group creation screen will be shown as follows:-

Name:-

Enter the group name you want to create. It should be unique.

Alias:-

It can be abbreviated name/code. In drop down list alias and group name both will be displayed you can select any one of them. Alias name can be more then one.

Under:-

Select the group under which you want to create the group (For Secondary Group). Properties of parent group will be assigned to secondary group. Select primary in this field to create primary group. Now it will ask about following:-

Nature of Group:-

Select the type of group is (Asset/liabilities/Income/Expenditure).

Does it Affect Gross Profit:-

If the nature of group is Income/ Expenses select Yes to make them Direct Exp./Income No for Indirect.

Group behaves like Sub-Ledger:-

There is no sub-ledger concept in Tally. You can use it only to make reports compact. As some groups like Sundry Debtors may have number of ledgers. So as reports like Trial Balance Etc. will become too long. You may use group as ledger and underlying ledgers as subgroup to make the reports compact.

Net Debit/Credit Balance for Reporting:-

Select Yes to get net balance in reports otherwise it will show you total of both Debit and Credit Side.

Used for Calculation (e.g. taxes, discounts):-

Yes if ledgers under this group would have percentages for discounts/taxes to be used for invoice entry.

Select the following to create a new group at Gateway of Tally

Gateway of Tally → Accounts Info → Group → Single Group → Create

Tangible Asset

Intangible Asset

Multiple Group Creation

If you want to Create/Display/Modify more than one group at a time you can multiple groups. It will fast your work. Select the following:-

Gateway of Tally → Accounts Info → Group → Multiple Group → Create

Group Alteration:-

Gateway of Tally → Accounts Info → Group → Multiple Group → Alter

You would normally choose this option when you need to alter names or changes parents of many groups. Select a particulars group for altering sub-groups under it or [All Items] to list all groups, their parents as well as position indices. Change restrictions as given in single Groups also apply to multiple groups

Ledger Creation

A Ledger is the actual account head to which you identify a transaction. You pass all accounting voucher entries using ledger.

Ledger creation screen will be shown as follows:-

Name:-

Enter the ledger name you want to create. It should be unique.

Alias:-

It can be abbreviated name/code. In drop down list alias and ledger name both will be displayed you can select any one of them. Alias name can be more then one.

Under:-

All accounts must be classified in their appropriate groups. You must specify which group the ledger falls under. A Group is not important by itself, but because it controls the usage of ledger accounts. A wrong classification would affect the treatment of the ledger account in final statements and during voucher entry. You can, of course, alter a ledger account to change its group classification at any time.

Mailing Detail

Name: -

Enter the ledger name you want to create. (Above ledger name are enter)

Address: -

Enter the ledger Address which you create.

State: -

Enter the state name. Example- U.P., Delhi

Pin Code:-

Enter the pin code of the state.

Tax Information

Pan / IT No.:-

Enter the Pan / IT No. of Party Name.

Sale Tax No.:-

Enter the sale tax registration number of the party.

Opening Balance:-

Enter the Opening balance Amount of the last Financial Year. (If Any)

Dr / Cr: -

Specify whether the Opening Balance is Debit or Credit. Tally follows the normal accounting principals of accounting.

Select the following to create a new ledger at Gateway of Tally

Gateway of Tally → Accounts Info → ledger → Single ledger → Create

Building

Plant & Machinery

Land

Goodwill

Patent

Multiple Ledger Creation

However, you are encouraged to first create a ledger under each group in single mode and then the rest of the ledgers in multiple modes. Tally will set the setting of that ledger as default for other ledgers created in multiple modes.

Select the following to create a new ledger at Gateway of Tally

Gateway of Tally → Accounts Info → ledger → Multiple ledgers → Create

Q1. The following of Trial Balance of XYZ Company as at 31^st march 2009. Prepare the Profit & Loss A/c & Balance Sheet.

Particulars	Amount (Dr.)	Amount (Cr.)
Drawing	5000	-----------
Furniture	5000	-----------
Plant & Machinery	5000	-----------
Opening Stock	8500	-----------
Capital	-----------	25000
Wages	8500
Creditors	-----------	13500
Debtors	19500
Bills Payable	-----------	500
Salaries	4000	-----------
Building	6000	-----------
General Expenses	2000	-----------
Power Fuel	500	-----------
Return Inward	750	-----------
Bank Charges	100	-----------
Patents	6250	-----------
Carriage Inward	450	-----------
Carriage Outward	550	-----------
Cash	400	-----------
Bank Loan	-----------	2500
Return Outward	-----------	250
Sales	-----------	61750
Manufacturing Expenses	2000	-----------
Rent, Taxes & Insurance	1000	-----------
Motor Car Expenses	600	-----------
Purchase	24400	-----------
Discount (Dr)	250	-----------
Travelling Expenses	1250	-----------
Bank	1500	-----------
Total Amount	103500	103500