T.Y. B.

COM (SEM – VI) – E-ACCOUNTING UNIT – III

E-ACCOUNTING (Tally.ERP 9)- BRS

1. Accounting Vouchers (entry with voucher and invoice type)
- Contra Voucher (P4)
- Payment Voucher (F5)
- Receipt Voucher (F6)
- Journal Voucher (F7)
- Sales Voucher/Invoice (F8)
- Credit Note Voucher (CTRL + F8)
- Purchase Voucher (F9)
- Debit Note Voucher (CTRL + F9)

2. Activity for Transactions (without inventory)

Transactions of PQR & Associates for the month of April 2019
Date Transaction
01.04.2019 Opening Balance of ` 50,00,000 for Proprietor’s capital account,
` 35,00,000 in HDFC Bank, ` 3,00,000 of Office furniture, ` 10,00,000 of
Plant & Machinery and Rs.2,00,000 of cash balance on hand.
01.04.2019 You have bought furniture of ` 50,000 in credit from SNK Furniture Mart
with invoice no. SNX-1526. Payment for the same is given by you from
HDFC bank account on 02.04.2019 (cheque no. 10020)
02.04.2019 Goods worth ` 5,00,000 purchased from M/s KH Enterprise vide invoice
no. KH-1120.
03.04.2019 Gods worth ` 1,50,000 had been sold to M/s SK Associates vide invoice
no. SL-001.
04.04.2019 Goods worth ` 1,20,000 had been sold to M/s PR Enterprises vide invoice
no. SL-002.
05.04.2019 Goods worth ` 15,000 had been sold on cash vide cash memo no. CL-100
to M/s J. J. Enterprise.
06.04.2019 ` 3,000 paid through cheque no. 100021 to M/s Bharat Petroleum against
the petrol bill (bill no. E-102056) of ` 5,000 for the month of March 2019
and remaining ` 2,000 paid in cash on 05 .04.2019.
07.04.2019 ` 12,500 paid through cheque no. 100022 to M/s Max Ad Pvt. Ltd. against
advertisement invoice no. MSL - 0780.
08.04.2019 M/s Vision Printing Lab has issued an Invoice no. VSL-165 for ` 7,800
against printing expenditure incurred by PQR & Associates for your
product labeling. The invoice was paid through cheque no. 100023 to M/s
Vision Printing Lab.
04.04.2019 Goods worth ` 2,00,000 purchased from M/s KH Enterprise vide invoice
no. KH-1 128 and payment for which was made through cheque
no.100024 on 24.04.20 19.

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10.04.2019 Goods worth ` 5,00,000 purchased from M/s K.N. Enterprise vide invoice
no. H-1280 and payment for which was made through cheque no. 100025
on 25.04.20 19.
11.04.2019 Goods worth ` 3,00,000 purchased from M/s K.N Enterprise vide invoice
no. H-1282 and payment for which was made through cheque no. 100026
on 26.04.2019.
12.04.2019 Goods worth ` 2,00,000 had been sold to M/s SK Associates vide invoice
no. SL-003 and payment received against invoice vide cheque no.121501
dated 27.04.20 19.
13.04.2019 Goods worth ` 85,000 had been sold to M/s SK Associates vide invoice no.
SL-004 and payment received against invoice vide cheque no. 256300
dated 28.04.20 19.
14.04.2019 Goods worth ` 1,20,000 had been sold to M/s PR Enterprises vide invoice
no. SL-005 and payment received against invoice vide cheque no. 326512
dated 29.04.20 19.
15.04.2019 Goods worth ` 2,50,000 had been sold to M/s PR Enterprises vide invoice
no. SL 006 and payment received against invoice vide cheque no. 245620
dated 29.04.20 19.
16.04.2019 Payment of ` 3,00,000 made to M/s KH Enterprise against invoice no. KH-
1120 vide cheque no. 100027.
17.04.2019 Payment of ` 2,00,000 made to M/s KR Enterprise against invoice no. KH-
1120 vide cheque no. 100028.
18.04.2019 A cheque (ch.no.050021) of ` 1,50,000 had been received from M/s SK
Associates against invoice no. SL-001 and deposited in our bank account.
19.04.2019 A cheque (ch. no. 060031) of ` 1,20,000 had been received from M/s PR
Enterprises against invoice no. SL-002 and deposited in our bank account.

Sample Solution:
Date Ledgers to be created Voucher Invoice Debit (`) Credit
Type No./ (`)
Cheque
No.
01.04.2019 Dr- Furniture A/c SNK – 50,000
1526
Cr- SNK Furniture Mart 50,000
(Being, Office furniture
purchased from SNK
furniture mart with
invoice no. SNK-1526.)
02.04.2019 Dr – Purchase a/c F9: KH - 5,00,000
Purchase 1120
Cr- KH Enterprise (Being 5,00,000
goods purchased from
KH Enterprise with
invoice no. KH-112O

(3) Bank Reconciliation

Most Businesses these days prefer to receive and make payments via their Bank
accounts. Typically, while transactions via Bank, an organization prepares a
deposit slip to credit the payments received into firm’s account, generate payment
advice and tracks funds in order to always ensure that the bank account has the
minimum funds required at all times.

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But as the number of transactions increase, it becomes a challenging task for
organizations to prepare a large number of deposit slips, covering letters and
reconcile the bank ledger balance and the bank statements.

Meaning: A Bank Reconciliation is a process that Explains the difference between

the bank balance shown in an Organization’s Bank Statement, as supplied by the
Bank, and the corresponding amount shown in the organization’s own records at a
particular point of time.

Requirement of Bank Reconciliation: Differences in Organization’s Bank

Statement provided by bank organization’s and own records maintained by an
Organization is because of,
(a) a cheque or a list of cheques issued by the organisation has not been
presented to the bank,
(b) a banking transaction, such as a credit received, or a charge made by the
bank, has not yet been recorded in the organization’s books, or
(c) either the bank or the organisation itself has made an error.

Importance:
(i) Bank reconciliation is an important process that helps a Business to cross-
verify, its own books of accounts with the bank statement.
(ii) Comparing the two statements with long list of transactions is stressful and
error-prone exercise using the manual and conventional method.
(iii) However, Tally ERP 9 will minimize the time spent and risk of making errors
during bank reconciliation using the newly introduced various features by
software.

Types of Bank Reconciliation:

There are two types of Bank reconciliation.
(a) Manual bank reconciliation
(b) Automatic bank reconciliation

It may be very easy to reconcile the difference by looking/checking at very recent

transactions in either the Bank Statement or the Organization’s own accounting
records (Cash Book) and trying to see whether any amount match with the
difference shown as Bank Statement. Otherwise, it will become time consuming
process for bank reconciliation whereby, accountant supposed to go through and
match every transaction in both set of record i.e. Bank Statement supplied by
Bank and Organization’s own records. For a good practise of

Accounting, it will be desirable to carry out such reconciliations at reasonable and

frequent Intervals.
If on frequent basis such activities are not carried out then it will become
accumulation of banking entries work which will result into delay of Accounting
and ultimately effects good accounting practices negatively.

Reconciling Bank Accounts

The bank where you hold a current account has sent you a bank statement for the
first week ended Feb 29, 2019 showing the following entries:

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Bank Statement of SQR Traders - Bank Account for Feb 2019
Date Particulars Deposits Withdrawals Balance
01.02.2019 Balance b/f 4,50,000
02.02.2019 Cheque No. 12545 60,000 3,90,000
reference -
Employee Wages
03.02.2019 Cheque NO. 12546 45,000 3,45,000
reference -- ABC
Trading Co.
05.02.2019 Cheque No. 12447 50,000 3,95,000
reference — PQR
Ltd.
07.02.2019 Balance c/f 3,95,000

As there is opening balance of HDFC current bank account we need to first create
a ledger of HDFC current bank account with opening balance of ` 4,50,000.

After creating a HDFC current bank account, we are supposed to pass necessary
journal entries in the bank account.
After passing necessary journal entries, now we can go for bank reconciliation.
Step I
Display> Accounts Book>Cash/Bank Book>choose your specific bank i.e., HDFC
Bank.
Step II
Select the specific month for which bank reconciliation we want to do. In our case
we are supposed to do bank reconciliation for the month of April 2020.

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Step III - Press Ctrl + R from keyboard for Reconciliation

Step IV - Enter the Bank date on which a particular transaction is cleared in bank
date column. So, in our case as we are working with education version of Tally
Prime, we are assuming that all bank transaction gets cleared in Bank of 02nd
April 2020. That why we had entered 02/04/2020 in Bank date column. After
giving bank date for all transaction, save it.

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Step V - Now one can check the output with the same function key of Ctrl + R
from keyboard, we can see there is no transaction pending to reconcile in the
month of April 2020 and the screen will looks like as follows,

Now we can see that balance as per Company Bank and Balance as per Bank
comes to ` 3,95,000 i.e., same amount is reflecting in balance as per Company
Bank and Balance as per Bank. So, it shows there in no difference between these
two balances. It means we have successfully completed bank reconciliation.

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Cost Centers and Cost Categories
Cost Centres
A cost centre is any unit of an organisation to which transactions (generally,
revenue) can be allocated. When only costs or expenses are allocated to these
units, they are referred to as Cost Centres. When profits are also allocated to
these units, they become Profit Centres. You can now obtain a Profit and Loss
account of each such Profit Centre.
Transactions are allocated to cost centres. This enables accounting all transactions
for that particular cost centre. You can view the cost centre break up of each
transaction as well as the details of transactions for each Cost Centre.
Some examples of Cost Centres are:
Departments of an organisation - Finance, Manufacturing, Marketing, and so on.
• Products of a company.
• Individuals such as Salesman A, Salesman B.
You can classify cost centres, just as you classify Group/Ledger accounts. You can
have Primary Cost Centres and several levels of Cost Centres under each Primary
Cost Centre.
Consider the following example.
• Primary Cost Centres - Finance, Manufacturing, Marketing.
• Under Marketing, classify the company’s sales executives (Salesman A,
Salesman B, Salesman C) as Cost Centres. This will help you track a sales
executive’s performance, in terms of cost and revenue generated.
Allocate expenditure incurred on sales by the salesmen, as well as the sales
generated by them, directly to their Cost Centres. The allocation is done at the
time of voucher entry. This prevents allocation errors at the end of the period.
By allocating expenses and sales transactions to the salesmen, you are setting up
a valuable information system that tracks the performance of your salesmen.
Enable Cost Centres
1. From Gateway of Tally> Click F11: Features> Accounting Features.
2. Enable the option Maintain Cost Centres.
3. Press Ctrl+A to save the Company Operations Alteration screen.
By default, Tally Prime activates the Cost Centre feature for Ledger accounts
under Sales Accounts, Purchase Accounts, Expense, and Income groups.

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Create Cost Centre

Create a single cost centre

1. Go to Gateway of Tally > Masters> Create> Cost Centres
2. Press Backspace to change the default Category, if required.
3. Enter the Name.
4. Select the parent cost centre Under which the cost centre must be grouped.
5. Press Enter to save the Cost Centre.

Note: Unlike groups, you can allocate transactions to Primary Cost Centres.
However, you should do so when you do not have Sub Cost Centres under the
Primary Cost Centre.

Alter a Cost Centre

You can alter an existing cost centre in the single mode. Alternatively, multiple
cost centres can be altered in the multiple mode, if required.
1. Go to Gateway of Tally> Masters> Alter>Cost Centres S
2. Make changes as required.
3. Press Ctrl+A to accept.

Delete a Cost Centre

Cost centres can also be deleted in the alteration mode.

1. Go to Gateway of Tally >Masters> Alter>Cost Centres>

2. Select the Cost Centre from the List of Cost Centres. The Cost Centre Alteration
screen appears.
3. Click D: Delete.
4. Click Enter to confirm deletion of the cost centre.

Note: You can delete a cost centre only if:

1. It does not have any Cost Centres created under it.
2. It is not used in any transactions.

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Cost Category

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TYPE - I
` 1,00,000- Salary Expense — Company SK Construction Co
Mahesh Sharma — 20%
Rakesh Varma —25%
Shivam Parmar — 15%
Paresh Agarwal — 15%
Heena Shah —25%
In this Example company has to pay salary so after creating Cost Centre and Cost
Categories next step is to enter it in payment voucher.

Step - 1 Voucher > Payment Voucher (F5)

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To check reports -
Go to Gate way of Tally > Display more reports> Statement of Accounts > Cost
Centre > Cost category summary

TYPE - II
` 2,95,000- Salary Expense - Company SK Construction Co
Mahesh Sharma - 35,000
Rakesh Varma - 45,000
Shivam Parmar - 55,000
Paresh Agarwal - 75,000
Heena Shah - 85,000
E-ACCOUNTING (Tally.ERP 9) - BRS 13
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Activity for Cost Category & Cost Center
TYPE – I

Cost Category & Cost Center

Pre-Define ratio (3:4:2:1)
TYPE - I

Unit of Measurement
How to enable Alternate Unit of Measurement?
Unit of measurement is very necessary for the purpose of maintaining the stock
items and accounting with inventory. Along with unit of measurement, alternate
unit of measurement is also frequently use d in the accounting with inventory.
Let’s see how to enable the alternate unit of measurement with tally prime.
For the purpose of activating alternate unit function, you have to reach up to point
of creating stock item while passing a particular journal entry for either purchase
or sales transactions. So, for the purpose of understanding, we try to pass an
entry for purchase of 50 Boxes of MCB (1000 Nos) at the price of ` 1500 per box
from ABC Associates on 01.04.2020 with invoice number 001.

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Create stock Item of MCB in Tally prime.

At the time of creating a unit of measurement of Number, we want to create an

Alternate Unit of Measurement, so press F12 Configuration button and you will see
the following screen. Enter Yes at second last item available in the screen and
save it.

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Now, we can see there are two unit of measurement in the screen for our entry
purpose.

After saving the above, one can complete the entry work.

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* Inventory Vouchers
Tally. ERP 9 inventory vouchers perform the same function in the inventory
system a accounting vouchers do. They are the means by which you enter
transactions relating to the Inventory. The vouchers record transactions relating to
the issue and receipt of stock, the transfer of stock between godowns, and
physical stock adjustments. The following inventory vouchers are available in
Tally. ERP 9:
(a) Purchase Order (AIt+F4) (e) Stock Journal (Alt+F7)
(b) Sales Order (Alt+F5) (f) Delivery Note (Alt+F8)
(c) Rejections Out (Alt+F6) (g) Receipt Note (Alt+F9)
(d) Rejections In (Ctrl+ F6) (h) Physical Stock (Alt+F10)
(a) Purchase Order (Alt+F4): A Purchase order entry has to be made in the
books of the company to assist them in check in whether the goods have been
received or not. The Purchase Order number can be used as a reference. For
example, the company wishes to place an order with the supplier for some goods.

Purchase order
Description Records placing an order for stock items to suppliers
Details Recorded Supplier’s stock item, Ledger account, Name and address,
Order details, name of Due on, Godown, Quantity, Rate,
Amount, Narration.

(b) Sales Order (Alt+F5): A Sales Order entry has to be made to record this.
The Sales Order number can be used as a reference. For example, a customer
places an order with the company for purchasing some goods.

Sales order
Description Records order details for stock items received from customers.
Details Customer’s Ledger account, Name and address, Order details,
Recorded name of stock item, Due on, Godown, Quantity, Rate, Amount,
Narration.
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(c) Rejections Out (Alt+F6): A Rejections Out entry is passed to record the
rejected goods. This is a pure inventory voucher. For example: We have
purchased some goods and have rejected a part of it.
Rejections Out (Purchase Return)
Description Records rejected stock details returned to suppliers.
Details Ledger Account, Suppliers name and address, stock item,
Recorded Tracking details, Order details, Godown, Quantity Rate,
Amount, Narration.

(d) Rejections In (Ctrl+ F6): A Rejections In entry is passed to record the

rejected goods. The Rejections In entry is a pure inventory voucher. For example,
a customer has rejected goods that was sold earlier.
Rejections Out (Sales Return)
Description Records rejected stock details received from customers
Details Ledger account, Customer’s name and address, stock item,
Recorded Tracking details, order details, Godown, Quantity, Rate,
Amount, Narration.

(e) Stock Journal (Alt+F7): To record the consumption of goods there is no

need for entries on both sides of the voucher. Such entries can be entered in a
stock journal voucher. For example: the company transfers items of stock from
the warehouse to the shop.
Stock Journal
Description Essentially records the transfer of stock from one Godown to
another.
Details Names of from and to godowns, name of stock item, quantity,
Recorded rate, amount, narration.

(f) Delivery Note (Alt+F8): Goods that are being delivered to a customer are
recorded in a Delivery Note voucher.
Delivery Note
Description Records delivery of new stock to customers
Details Reference, ledger account, supplier’s (if supplementary details
Recorded are set to yes, in F12: Delivery Note Configuration) then,
name and address, Order & dispatch details, name of stock
item, Tracking details, Order details, Godown, Quantity,
Rate(optional), Amount(optional), narration.

(g) Receipt Note (Alt+F9): Goods that are received from the supplier are
recorded in a Receipt Note (Goods Receipt Note - GRN) voucher.
Receipt Note
Description Records receipt of new stock from suppliers
Details Reference, ledger account, (If supplementary details are set to
Recorded yes in F12: Receipt Note Configuration) then, Order details,
Supplier’s name and address, name of stock item, Tracking
details, Order details, Godown, Quantity, Rate (optional),
Amount (optional), narration.
(h) Physical Stock (Alt+F1O): Tally.ERP 9 considers the stock available based
on the entry made in a physical stock voucher. For example, on conducting a
stock-check, the company finds a discrepancy between the actual stock and the
recorded stock figure.

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Physical Stock
Description Records the physical stock count as the new stock balance
Details Name of stock item, Godown, Physical stock quantity
Recorded

* Activity for Purchase & Sales with inventory

Date Particulars
1.10.2019 20 boxes of ―1OA x 1 Way Switch‖ containing 20 pieces per box of
` 95 per box purchased from Anchor Electrical Pvt. Ltd. with Invoice
No. ABR/045.
2.10.2019 45 boxes of ―10A x 2 Way Switch‖ containing 20 pieces per box of
` 105 per box purchased from Anchor Electricals Pvt. Ltd. with
Invoice No. ABR/048.
3.10.2019 30 boxes of ―1OA x 1 Way Switch with Neon‖ containing 20 pieces
per box of ` 115 per box purchased from Anchor Electricals Pvt. Ltd.
with Invoice No. ABR/080.
4.10.2019 60 boxes of ―10A x 1 Way Switch with Fan Mark‖ containing 20
pieces per box of ` 124 per box purchased from Anchor Electricals
Pvt. Ltd. with Invoice No.ABR/112.
5.10.2019 35 boxes of ―1OA Bell Push Switch with Neon‖ containing 20 pieces
per box of ` 130 per box purchased from Anchor Electricals Pvt. Ltd.
with Invoice No. ABR/280.
6.10.2019 35 boxes of ―20A 1 Way Switch‖ containing 20 pieces per box of
` 126 per box purchased from Anchor Electricals Pvt. Ltd. with
Invoice No. ABR/325.
7.10.2019 45 boxes of ―20A 2 Way Switch‖ containing 20 pieces per box of
` 135 per box purchased from Anchor Electricals Pvt. Ltd. with
Invoice No. ABR/428.
8.10.2019 05 boxes of ―1OA x 1 Way Switch‖ containing 20 pieces per box of
` 109 per box sold to M/s Shiva Electrical vide sales Invoice No. LS/
18 - 19/101
10.10.2019 15 boxes of ―1OA x 2 Way Switch‖ containing 20 pieces per box of
` 135 per box sold to M/s Mitesh Electrical Pvt. Ltd. vide sales
Invoice No. LS/18-19/102.
18.10.2019 10 boxes of ―1OA x 1 Way Switch with Neon‖ containing 20 pieces
per box of ` 137 per box sold to M/s Pratham Electric Co. vide sales
Invoice No. LS/18-19/103.
20.10.2019 25 boxes of ―1OA x 1 Way Switch with Fan Mark‖ containing 20
pieces per box of ` 139 per box sold to M/s Pratham Electric Co.
vide sales Invoice No. LS/18-19/104.
25.10.2019 15 boxes of ―10A Bell Push Switch with Neon‖ containing 20 pieces
per box of ` 140 per box sold to M/s Sejal Electrics & Store vide
sales Invoice No. LS/18-19/105.
26.10.2019 05 boxes of ―20A 1 Way Switch‖ containing 20 pieces per box of
` 156 per box sold to M/s Sejal Electrics & Store vide sales Invoice
No. LS/1 8-19/106.
28.10.2019 45 boxes of ―20A 2 Way Switch‖ containing 20 pieces per box of
` 171 per box sold to M/s Shiva Electrical vide sales Invoice No.
LS/1 8-19/107.
29.10.2019 05 boxes of ―10A x 2 Way witch‖ containing 20 pieces per box of
` 105 per box returned back to Anchor Electricals Pvt. Ltd. as
defective product and Debit note has been issued vide debit note
no. DR/APL/01
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30.10.2019 05 boxes of ―10A x 1 Way Switch with Fan Mark‖ containing 20
pieces per box of ` 139 per box received back from M/s Pratham
Electric Co. vide credit not with credit note no. CR/UR/02.

* Activity for Bank Transactions (require to do bank reconciliation)

Date Particulars
02.10.2019 A payment of ` 2,24,200/- was issued vide ch.no.202020 in name
of Anchor Electricals Pvt. Ltd. against invoice no. ABR/045.
03.10.2019 A payment of ` 5,57,550- was issued vide ch.no.202021 in name of
Anchor Electricals Pvt. Ltd. against invoice no. ABR/048.
04.10.2019 A payment of ` 40,710- was issued vide ch.no.202024 in name of
Anchor Electricals Pvt. Ltd. against invoice no. ABR/080.
05.10.2019 A payment of ` 87,792- was issued vide ch.no.202026 in name of
Anchor Electricals Pvt. Ltd. against invoice no. ABR/112.
06.10.2019 A payment of ` 53,690- was issued vide ch.no.202028 in name of
Anchor Electricals Pvt. Ltd. against invoice no. ABR/280.
09.10.2019 A payment of ` 64,310/- was received vide ch.no.502050 from M/s
Shiva Electrical against invoice no LS/18-19/101
11.10.2019 A payment of ` 23,895/- was received vide ch.no.603040 from M/s
Mitesh Electrical Pvt. Ltd against invoice no.LS/18-19/102.
19.10.2019 A payment of ` 16,166/- was received vide ch.no.801090 from M/s
Pratham Electric Co against invoice no.LS/18-19/103.
22.10.2019 A payment of ` 41,005/- was received vide ch.no.80 1092 from M/s
Pratham Electric Co against invoice no.LS/18-19/104.
26.10.2019 A payment of ` 24,780/- was received vide ch.no.101022 from M/s
Sejal Electrics & Store against invoice no.LS/18-19/105.

Cheque issued by you was cleared in bank on 3rd days and cheque
received from customers was cleared on 4th day after presenting
cheque in the Bank of Baroda.
Please consider the date of issue and date of receipt for the above
consideration. Pass on the above all entries and also do Bank
Reconciliation for the month of Oct 2019.

* Purchase order processing in Tally. ERP 9:

An efficient purchase management tool: With Tally. ERP 9, you can manage your
purchases efficiently by creating purchase records, generating expense reports,
and updating to purchase records as and when needed.

Purchase Order: A Purchase order (PO) is a commercial document and, first

official offer issued by a buyer to a seller indicating types, quantities, and agreed
pricks for products or services. A PO or purchase order is used to control the
purchasing of products and services from external suppliers.

Enable Purchase Order:

• To enable Purchase Order in Tally. ERP 9, click on ―F - 11‖: Features (F2 :
Inventory Features)
• In the Order Processing section, set Allow Purchase Order Processing to ―YES‖,
to create purchase order

Prepare Purchase Order:

(a) Go to Gateway of Tally> Inventory Vouchers> Ctrl+F2 > F4: Purchase Order
to view the Order Voucher Creation screen

E-ACCOUNTING (Tally.ERP 9) - BRS 20

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(b) Enter the Party’s A/c Name
(c) Enter the Order No
(d) Select the stock item name from the List of Stock Items or press Alt + C to
create a new stock item
(e) Enter the Quantity of the item, as required
(f) Enter the Rate of the item
(g) Press Ctrl + A to accept

View Purchase Order summary:

Purchase Order Summary statement provides the users with detailed information
on the outstanding purchase orders.
To access purchase order Outstanding,
• Go to Gateway of Tally (GOT)
• Select Display and click on Statements of Inventory
• Then click on Purchase Order Outstanding


E-ACCOUNTING (Tally.ERP 9) - BRS 21