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Tally Notes
Accounting:
The main purpose of accounting is to ascertain profit or loss during a specified period,
to show financial condition of the business on a particular date and to have the control
over the firm‟s property. In other words an account is a systematic record of all
transaction relating to a person, an asset, a liability, an expense or an income. Account
is also called A/C. such accounting records are required to be maintained to measure
the income of the business, communicate the information. So that it may be used by
manager, owners and other parties.
Double Entry System:
We have seen earlier that every business transaction has two aspects, i.e., when we
received something we give. Something else in return. For Example, when we
purchased goods for cash, we received goods and give cash in return, similarly in a
credit sale of goods, goods are given to the customer and customer becomes debtor for
the amount of goods sold to him. This method of writing every transaction in two
accounts is known as Double Entry System Of Accounting of the two accounts, one
account is given debit while the other account is given credit with an equal amount.
Thus, on any date, the total of all debits must be equal to the total of all credit because
every debit has a corresponding credit.
Rules of Double Entry System/Golden Rule Of Accounting:
There are separate rules of the double entry system in respect of personal, real, and
nominal accounts which are discussed below……
1. Personal account: These accounts record a business‟s dealing with persons or
firms. The person receiving something is given debit and the person giving
something is given credit. In other word personal account recording transaction
with person or firm.
DEBIT THE RECEIVER
Personal Account Rule
CREDIT THE GIVER
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Tally Notes
2. Real account: These are the accounts of asset entering the business is given
debit and assert leaving the business is given credit. In other word real account
is that A/C of property or possession E.g. Goods A/c, furniture A/C, etc. For
example, when goods are sold for cash, cash account will be giving debit as
cash comes in and Goods account will be credited as goods go out. So, the rule
…..
DEBIT WHAT COMES IN
Real Account Rule
CREDIT WHAT GOES OUT
3. Nominal/ Fictitious Account: These account deals with expenses, income,
profit and losses. For example, when rent is paid to the land lord, rent account
will ne debited as it is an expense and cash account will be credited as it goes
out. Other example commission A/C, Advertising A/C, Discount A/c, wages
A/C.
DEBIT ALL EXPENSES & LOSSES
Nominal Account Rule
CREDIT ALL INCOME & GAIN
(Account recording transaction which do not affect particular person but effect
business in general are known as IMPERSONAL A/C‟S. it may be either Real
Or Nominal A/C RULE.)
Few basic terms:
Business transaction: Any exchange of money or money‟s worth as goods
and service between two parties is called a business transaction. It may relate to
purchased and sale of goods, receipt and payment of cash and rending of
service by one party to another.
Debtor: A debtor is a person who owes money. The amount due from him is
called debt. The amount due from a person as per the books of account is called
a book debt. For example Sold Goods to Rolex Industry in credit. The Rolex
Industry is known as Debtor.
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Tally Notes
Creditor: A person to whom money is owing or payable is called a creditor.
For example purchased goods from Sam Company in credit basis. The Sam
Company is known as Creditors.
Capital: This is the owner‟s financial interest or holding in business and is
represented by the value of net assets.
Goods: This including all articles, commodities or merchandise in which the
business deals. Thus, cloth would be goods for a dealer in cloth; furniture
would be goods for a dealer in furniture and so on.
Assets: Any physical thing or right owned that has money value is an asset. In
other words, an asset is that expenditure which results in acquiring of some
property or benefit of a lasting nature.
Drawings: Any amount or goods withdrawn by the owner of a business for
personal use is called drawing.
Voucher: Any written document in support of a business transaction is called a
voucher.
Journal:
Journal is derived from the French word “JOUR” which means a day. Journal
therefore means a daily record of business transaction. Journal is a book of original
entry because transaction is first written in the journal from which it is posted to the
ledger at any convenient time.
Ledger:
We know, journal records all business transaction separately and date wise. The
transaction pertaining to a particular person, assets, expense, or income is recorded at
different place in the journal as they occur on different dates. Hence, journal fails to
bring the similar transaction together at one place. Thus, to have a consolidated view
of the similar transaction different accounts are prepare in the ledger. A ledger
account may be defined as a summary statement of all the transaction relating to a
person, assert, expense or income which have taken place during a given period of
time and shows their net effect.
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Tally Notes
Trial balance:
The end of the financial year or at any other time, the balance of the all ledger
accounts are extracted and are written up in a statement known as trial balance and
finally totaled up to see if the total of debit balances is equal to the total of credit
balances. A Trial Balance may thus be defined as a statement of debit and credit total
or balance extracted from the various A/C in the ledger with a view to test the
arithmetical accuracy of the book.
1. To have balances of all the accounts of the ledger.
2. To have proof that the double entry of each transaction has been recorded
because of its agreement.
3. To have material accuracy of preparing the profit and loss account and balance
sheet of the business.
Balance sheet:
A balance sheet is a statement prepared with a view to measure the financial position
of a business on a certain fixes date. The financial position of a concern is indicating
by its assets on a given date and its liabilities on that date. Excess of asserts over
liabilities represents the capital and is indicative of the financial soundness of the
company. A balance sheet is also described as a statement showing the source and
application of the capital. It is a statement and not an account and prepared from real
and personal A/C. the left hand side of the balance sheet may be viewed as a
description of sources from which it currently operated and the right hand side as a
description of the firm in which that capital is invested on a specified date.
The balance sheet is a statement, which projects the financial position of a business on
a given date. This is one of the backbones of TALLY. At the gateway of Tally, press
B to being up the balance sheet.
Tally Notes
Accounting:
The main purpose of accounting is to ascertain profit or loss during a specified period,
to show financial condition of the business on a particular date and to have the control
over the firm‟s property. In other words an account is a systematic record of all
transaction relating to a person, an asset, a liability, an expense or an income. Account
is also called A/C. such accounting records are required to be maintained to measure
the income of the business, communicate the information. So that it may be used by
manager, owners and other parties.
Double Entry System:
We have seen earlier that every business transaction has two aspects, i.e., when we
received something we give. Something else in return. For Example, when we
purchased goods for cash, we received goods and give cash in return, similarly in a
credit sale of goods, goods are given to the customer and customer becomes debtor for
the amount of goods sold to him. This method of writing every transaction in two
accounts is known as Double Entry System Of Accounting of the two accounts, one
account is given debit while the other account is given credit with an equal amount.
Thus, on any date, the total of all debits must be equal to the total of all credit because
every debit has a corresponding credit.
Rules of Double Entry System/Golden Rule Of Accounting:
There are separate rules of the double entry system in respect of personal, real, and
nominal accounts which are discussed below……
1. Personal account: These accounts record a business‟s dealing with persons or
firms. The person receiving something is given debit and the person giving
something is given credit. In other word personal account recording transaction
with person or firm.
DEBIT THE RECEIVER
Personal Account Rule
CREDIT THE GIVER
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Tally Notes
2. Real account: These are the accounts of asset entering the business is given
debit and assert leaving the business is given credit. In other word real account
is that A/C of property or possession E.g. Goods A/c, furniture A/C, etc. For
example, when goods are sold for cash, cash account will be giving debit as
cash comes in and Goods account will be credited as goods go out. So, the rule
…..
DEBIT WHAT COMES IN
Real Account Rule
CREDIT WHAT GOES OUT
3. Nominal/ Fictitious Account: These account deals with expenses, income,
profit and losses. For example, when rent is paid to the land lord, rent account
will ne debited as it is an expense and cash account will be credited as it goes
out. Other example commission A/C, Advertising A/C, Discount A/c, wages
A/C.
DEBIT ALL EXPENSES & LOSSES
Nominal Account Rule
CREDIT ALL INCOME & GAIN
(Account recording transaction which do not affect particular person but effect
business in general are known as IMPERSONAL A/C‟S. it may be either Real
Or Nominal A/C RULE.)
Few basic terms:
Business transaction: Any exchange of money or money‟s worth as goods
and service between two parties is called a business transaction. It may relate to
purchased and sale of goods, receipt and payment of cash and rending of
service by one party to another.
Debtor: A debtor is a person who owes money. The amount due from him is
called debt. The amount due from a person as per the books of account is called
a book debt. For example Sold Goods to Rolex Industry in credit. The Rolex
Industry is known as Debtor.
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Tally Notes
Creditor: A person to whom money is owing or payable is called a creditor.
For example purchased goods from Sam Company in credit basis. The Sam
Company is known as Creditors.
Capital: This is the owner‟s financial interest or holding in business and is
represented by the value of net assets.
Goods: This including all articles, commodities or merchandise in which the
business deals. Thus, cloth would be goods for a dealer in cloth; furniture
would be goods for a dealer in furniture and so on.
Assets: Any physical thing or right owned that has money value is an asset. In
other words, an asset is that expenditure which results in acquiring of some
property or benefit of a lasting nature.
Drawings: Any amount or goods withdrawn by the owner of a business for
personal use is called drawing.
Voucher: Any written document in support of a business transaction is called a
voucher.
Journal:
Journal is derived from the French word “JOUR” which means a day. Journal
therefore means a daily record of business transaction. Journal is a book of original
entry because transaction is first written in the journal from which it is posted to the
ledger at any convenient time.
Ledger:
We know, journal records all business transaction separately and date wise. The
transaction pertaining to a particular person, assets, expense, or income is recorded at
different place in the journal as they occur on different dates. Hence, journal fails to
bring the similar transaction together at one place. Thus, to have a consolidated view
of the similar transaction different accounts are prepare in the ledger. A ledger
account may be defined as a summary statement of all the transaction relating to a
person, assert, expense or income which have taken place during a given period of
time and shows their net effect.
, https://sscstudy.com/
Tally Notes
Trial balance:
The end of the financial year or at any other time, the balance of the all ledger
accounts are extracted and are written up in a statement known as trial balance and
finally totaled up to see if the total of debit balances is equal to the total of credit
balances. A Trial Balance may thus be defined as a statement of debit and credit total
or balance extracted from the various A/C in the ledger with a view to test the
arithmetical accuracy of the book.
1. To have balances of all the accounts of the ledger.
2. To have proof that the double entry of each transaction has been recorded
because of its agreement.
3. To have material accuracy of preparing the profit and loss account and balance
sheet of the business.
Balance sheet:
A balance sheet is a statement prepared with a view to measure the financial position
of a business on a certain fixes date. The financial position of a concern is indicating
by its assets on a given date and its liabilities on that date. Excess of asserts over
liabilities represents the capital and is indicative of the financial soundness of the
company. A balance sheet is also described as a statement showing the source and
application of the capital. It is a statement and not an account and prepared from real
and personal A/C. the left hand side of the balance sheet may be viewed as a
description of sources from which it currently operated and the right hand side as a
description of the firm in which that capital is invested on a specified date.
The balance sheet is a statement, which projects the financial position of a business on
a given date. This is one of the backbones of TALLY. At the gateway of Tally, press
B to being up the balance sheet.
