Basics of Financial Accounting

with Tally

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Agenda
In this session, we will discuss:
● Introduction to Financial Accounting
● Tally Fundamentals
● Recording Transactions
● Creating Financial Statements
● Analysis of Tally Reports
● Tally Tips and Tricks

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Accounting
According to the American Institute of Certified Public Accounts (AICPA), “Accounting is the Art of
recording, classifying and summarizing, in a significant manner and in terms of money, transactions and
events which are, in part at least, of financial character and interpreting the result thereof.”
The process of accounting:
● Classification into assets, liabilities, capital, revenue and expenses.
● Preparation of income statement.
● Communication of results.
● Identification of accounting transactions which have documentary evidence.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Functions of Accounting
● Recording

● Classifying

● Summarizing

● Analyzing

● Interpreting

● Communicating

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Journal Entry
● A journal entry is a record of a business transaction in accounting. It is the first step in the accounting
cycle and involves recording the financial effects of a transaction in a company's general ledger. Journal
entries are used to maintain a chronological and systematic record of all financial transactions that
occur within a business.
● Format or Performa of Journal Entries.

Debit Credit
Date Particulars L/f
(amount) (amount)

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Ledger Accounts
● A ledger account, also known as a general ledger account or simply an account, is a record or a specific
location where financial transactions related to a particular category or type are recorded. It is a
fundamental component of the double-entry bookkeeping system.
● Format or Performa of Ledger Accounts.

Date Particulars Amount Date Particulars Amount

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Trial Balance
● A trial balance is a list of all the general ledger accounts of a company and their respective balances at a
specific point in time. It serves as an intermediate step in the accounting cycle to ensure that the total
debits equal the total credits before preparing financial statements.
● Format or Performa of Trial Balance.

Date / Debit Credit

Particulars
SL No (Amount) (Amount)

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Tally Fundamentals

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Introduction to Tally
● Tally is a popular accounting and financial management software widely used by businesses and
individuals for managing their financial transactions and records.
● It is designed to streamline and automate various accounting tasks, making it easier to maintain
accurate and up-to-date financial records.
● Tally software is a versatile accounting and financial management tool widely used by businesses and
individuals to streamline their financial operations.
● The primary purpose of Tally is to assist in the efficient recording, management, and analysis of
financial data.
● Is both accurate and convenient to use even if you are not well versed with the accounting.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Features of Tally
Accounting

Billing and Invoicing

Inventory Management

GST Compliance

Multi-Currency Support

Bank Reconciliation

Financial Reports
Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Features of Tally (Cont’d)
TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) Compliance

Payroll Management

Backup and Restore

GST Compliance

Data Security

Audit and Compliance Features

Remote Access
Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Purpose of Tally Software
● Financial Record Keeping
● Double-Entry Accounting
● Financial Reporting
● GST and Tax Compliance
● Inventory Management
● Customization
● Multi-Company Support

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Difference between all Tally version
● Tally 4.5 - Do's based on Account with Inventory
● Tally 5.4 - Window based Account with Inventory
● Tally 6.3 - With Online finalization Auditing
● Tally 7.0 - Import and Export features.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Difference between all Tally version (Cont’d)
● Tally 7.2 - With VAT, TDS & Excise Duty.
● Tally 8.1 - With FBT and Excise Duty
● Tally 9.0 - 8.1 with Payroll system, Multi-Language Extra formality feature.
● Tally ERP 9.0 - Tally ERP.9 with Remote Access facility, Multi-budgets & scenarios & etc.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Advantages of Tally.ERP9
● Remote Access
● Tally.NET
● Simplified Installation Features
● Control Centre
● Enhanced Look and feel
● Enhanced Payroll Compliance
● Excise for Manufactures
● Auditors edition of Tally.ERP9
● Enhanced Tax Deducted at Source

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Steps to install and set up Tally ERP 9
● System Requirements
● Download Tally ERP 9
● Install the Software

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Setting up Tally
● Start Tally
● Activate Your License
● Create a Company
● Enable Features
● Configure Your Chart of Accounts
● Enter Opening Balances
● Start Recording Transactions
● Set Up Security and User Access Control
● Data Backup
● Explore Tally Documentation and Support

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Recording Transactions

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Creating and Managing Company in Tally
● Company Creation:
○ Steps to create a new company in Tally.
○ Considerations for naming and configuration.

● Company Configuration
○ Configuring company details such as address, fiscal year, and more.
○ Setting up security controls and access levels.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Creating and Managing Company in Tally

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Chart of Accounts
● Understanding Chart of Accounts Definition and purpose.
● Importance in organizing and classifying financial transactions.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Voucher Entry in Tally
● Types of Vouchers
● Each voucher type's specific purpose.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Voucher Entry in Tally (Cont’d)
● Recording Sales and Purchase Transactions
● Cash and Bank Transactions

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Details of purchase order
● Products that are ordered
● Quantities i.e., (kg, meters, numbers etc.,)
● Price at which it is ordered
● Name of the vendor to whom the purchase order is being sent
● Shipment address or delivery location where the goods are required
● Billing address of the company
● Terms and conditions of payment.
● Due date of delivery/consignment

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Details of purchase order

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Trial Balance
● Purpose and Preparation of Trial Balance, Understanding the trial balance as a tool for financial
validation.
● Steps to prepare a trial balance in Tally.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Profit and Loss Statement
● Components of Profit and Loss Statement
● Calculating Net Profit/Loss

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Profit and Loss Statement

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Balance Sheet
● Explanation of assets, liabilities, and equity sections.
● Balance sheet as a snapshot of the company's financial position.

Objectives of Balance sheet:

● It helps in ascertaining the financial position of the business on a given day.
● Details of owner’s equity can be determined.
● The information from the Balance sheet helps you create provision for future loss/contingencies by
creating reserves.
● It provides a snapshot of business health including the economic resources the business owns, owes,
and the sources of financing for those resources.
● Ascertain if the business is financially autonomous and therefore solvent.
● Determine the financial liquidity of the business.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Components of Balance Sheet

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Process of preparing Balance Sheet

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Format of Balance Sheet

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Tally Reports Overview

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Types of Reports in Tally
● Overview of financial statements, stock summary, and other reports.
● Customization options and filters.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Sample Audit Report in Tally

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Keyboard Shortcuts in Tally
General Shortcuts:
● Alt + F1: To close a company.
● Alt + F2: To change the company.
● Ctrl + A: To accept a form wherever you use it.
● Ctrl + Alt + B: To check the Company Statutory details.
● Alt + F3: To select the Company from the list.
● Alt + F9: To see the detailed list of shortcuts.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Keyboard Shortcuts in Tally (Cont’d)
Gateway of Tally Shortcuts:
● G: To open the GATEWAY OF TALLY screen.
● R: To open the Display menu for Reports.
● I: To open the Display menu for Statutory Reports.
● X: To open the Display menu for Exceptions Reports.
● V: To open the Display menu for Voucher Reports.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Keyboard Shortcuts in Tally (Cont’d)
Voucher Entry Shortcuts:
● F2: To change the date.
● F4: To toggle between voucher types.
● F6: To select the narration.
● Ctrl + P: To print the voucher.
● Ctrl + R: To repeat narration.
● Alt + P: To print a report.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Keyboard Shortcuts in Tally (Cont’d)
Reports Shortcuts:
● Alt + 2: To view a detailed report.
● Alt + E: To export the report in different formats.
● Alt + I: To zoom in on a report.
● Alt + U: To upload data to the cloud.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Summary
Here’s a brief recap:
● Understand the core principles of financial accounting, emphasizing the systematic recording and
analysis of transactions for informed decision-making in business management.
● Master Tally basics by navigating the interface, creating companies, and gaining hands-on experience.
Establish a solid foundation for efficient Tally usage.
● Learn the essentials of recording diverse financial transactions in Tally, covering chart of accounts
comprehension and practical voucher entry exercises for accurate daily financial tracking.
● Generate and interpret crucial financial statements such as the Trial Balance, Profit and Loss
Statement, and Balance Sheet using Tally. Gain insights into the financial health of a company.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited
Summary
Here’s a brief recap:
● Explore various Tally reports and enhance data analysis skills for extracting valuable financial insights.
Customize reports and interpret data to support informed decision-making.
● Discover time-saving keyboard shortcuts, troubleshoot common issues, and implement efficient data
entry techniques. Gain practical insights to optimize Tally usage for enhanced productivity.

Proprietary content. ©Great Learning. All Rights Reserved. Unauthorized use or distribution prohibited