Course Material

BAAC2205 - Accounting Application by Computer

Diploma II Year (Accounting Specialization)

Department of Business Studies

University of Technology and Applied Sciences (Muscat)

1
INTRODUCTION TO TALLY

Tally is a leading business management software solution company, which today enables
more than 2 million businesses worldwide in over 100 countries. Since the year of inception
1986, Tally provides robust business management applications to small and medium
enterprises in India and other geographies around the world. With a strong research and
development division, Tally strives to deliver innovation and excellence in enterprise resource
planning software for small and medium businesses.
Tally Prime is a complete business management software launched on 9 th November 2020.

JOURNEY OF TALLY

2
MODULE 1
Module objectives
When you have completed this module, you will be able to:

 Describe the basic features of Tally Prime.

 Identify the key components of Working Screen of Tally Prime.

 Start and exit Tally Prime.

 Create a company in Tally Prime.

 Work on other companies in Tally.

3
FEATURES OF TALLY PRIME

Growth Partner
To help the companies in their growth journey, Tally Prime enables the companies to manage
multiple companies and incrementally add features such as multiple go-downs, multi-
currency, order process, cost centres etc. This helps the companies to get rid of complexities,
and in turn, focus on business growth.

Better control over cash flow

Quick and hassle-free bills receivables and payable management helps to get paid faster as
well as managing payment timelines. Also, Tally facilitates easy and efficient stock movement,
making it possible to optimize the cash flow.

Enhanced Business Efficiency

With Tally Prime, one can print or view the reports being in the middle of voucher entry, one
can load another company being in a report without abandoning the activity, get to know the
irregularities or odd details from every reports.

Optimum Inventory Management

Tally’s flexible inventory management system makes it easy to track, forecast and manage
the stock movements efficiently and optimize the inventory levels. Insightful and accurate
inventory reports at a click of a button help you make confident and on-time business
decisions.

Source : https://tallysolutions.com/global/tally-prime/

4
WORKING SCREEN OF TALLY PRIME

1. Title Bar
2. Menu Bar
3. Main Area
4. Button Area
5. Calculator (CTRL+N)

5
1. Title Bar
It is at the top of the working screen of Tally Prime. If provides name of the application on left
side and the standard windows buttons to Minimize, Maximize and Close on the right side.

By clicking on , the license information will be displayed in the pop-up window.

The Esc button and Enter button are used for navigation across Tally Prime. The Enter button
is used to select the commands and Escape button helps you to go back to the previous
screen.

2. Menu Bar
The Menu Bar has the following options :
(i) Company Menu (ALT+K)

6
(ii) Data Menu (ALT+Y)

(iii) Exchange Menu (ALT+Z)

Data Synchronization is used to share and update data between two or more
locations.

(iv) Go To Menu (ALT+G)

The Go To Menu helps to quickly access to any report or Tally commands.

(v) Import (ALT+O)

(vi) Export (ALT+E)
(vii) E-Mail (ALT+M)
(viii) Print (ALT+P)
(ix) F1 Help

7
3. Main Area
The Main Area is separated into two:
1. Left-hand side area
2. Right-hand side area
The left-hand side provides information on Current Period, Current Date and List of
Selected Companies (Name of the company and the date when last entry has been
made).
The right-hand side displays the Gateway of Tally menu such as Create, Alter, Vouchers,
daybook and so on.

4. Button Area
The buttons are designed to make the work easier and faster. F2 is used for changing
date, ALT+F2 is used for changing period. F3 for change company, ALT+F3 to select
company and CTRL+F3 to shut company. F2, F3 and F12 buttons will appear constantly
on all the screens and other shortcuts will appear which are relevant to the screen.

Calculator (CTRL+N)

The Calculator Pane allows you to perform simple and complex mathematical operations
required by the user eliminating the need of an additional calculator. To activate the
calculator press Ctrl+N.
Press Esc button to back to Gateway of Tally.

8
MAINTAINING COMPANY DATA
CREATING A COMPANY
Creating a Company involves providing basic information about the company whose books
of accounts are to be maintained in Tally Prime.
Gateway of Tally

Company Menu (ALT+K)

Select Create Company

Company Creation Form

Press Enter or ‘Y’ to create company

9
Company Creation Screen

Name
Enter the name of the company whose books are being opened.
The name of the company will be your FIRST NAME and FAMILY NAME.
Mailing Name and Address
In addition to the Company Name, Tally Prime provides the facility to enter the Mailing Name
field. It displays the Company Name by default. You may change it as required, if the mailing
name is different from the Company Name. The mailing name and address details are picked
up for inclusion in any report that needs the company name and address as heading. For
example: Balance Sheets, Statement of Accounts, and so on.
The address should be entered as below :
P.C. 112
Governorate
Select Muscat
Country
Select Sultanate of Oman
P.O.Box
Enter 1234

10
Telephone
Enter the Telephone number.
Mobile No
Enter the mobile number of the company.
Fax No
Enter the fax number of the company.
E-mail Address
Enter the E-mail address that will be used to e-mail documents, reports and data from
Tally Prime.
Website
Enter the website of the company.
Financial Year From
The stipulated period of the financial year is 12 months in most countries. Tally Prime
automatically considers 12 months from the date you give here as the Financial Year.
Tally Prime allows you to maintain data for multiple years by changing the period (Alt+F2) at
the Gateway of Tally. In addition, you can also specify the date of actual establishment of the
company (date of incorporation). Enter the current financial year as 1-1-2021.

Change of Features
Different features of a company can be selected or modified by using the F11: Features
button. This button is available in almost all the screens of Tally Prime enabling the user to
modify it as and when your requirements change.

11
The following changes should be made :
1. Maintain Bill-wise details : NO
2. Maintain Inventory : NO

Security Control

12
Change Control User Access to Company Data to YES

Username(Administrator) : Give your College ID

Select Company
Select Company option allows you to load another company from the list of companies listed
which you may have created earlier.
Press Enter on Select Company or use the button F3: Select Cmp (ALT+F3)

Shut a Company
Shut a Company is to unload it. It does not mean that you have deleted it. Simply select it
again to load and work on it again.
You can shut a company in two ways – either using the button Shut Company (CTRL + F3) or
pressing Enter on Shut Company option on the Company Menu (Alt+K).

Alter a Company
This option allows you to alter information about the existing company, you can modify any
information at any time that is set while creating a company.

13
 Gateway of Tally

Select Company Menu (Alt+K)

Select Alter

Select Company to Alter

Company Alteration Form

Press Enter or ‘Y’ to save changes

Delete a Company
This option allows you to delete an existing company.
To delete a company, you have to load the company first.
Gateway of Tally

Select Company Menu (Alt+K)

Select Alter

Select Company to Delete

Company Alteration Form

Press ALT+D

Press Enter or ‘Y’ to delete

14
 Module 2

Module objectives
When you have completed this module, you will be able to:
 Describe the basic functions of the Tally accounting system.
 Create an initial chart of accounts from the pre-defined set in Tally.
 Maintain the chart of accounts.
 Enter opening balances into the ledgers.
 Confirm that the chart of accounts and opening balances are correct.

15
ACCOUNTING WITH TALLY
The purpose of undertaking this training is to not only understand some of the basic concepts
of accounting, but to also understand the concepts of using a computer and accounting
software to maintain the accounts of a business. It is not the purpose of this training course
to teach accountancy, but to emphasize and confirm the knowledge you would have gained
during your study of the subject. Learning Tally will fulfill this purpose and it is worth
confirming that Tally maintains full, auditable, double entry bookkeeping exactly as you would
expect with a manual ledger system.
All financial transactions are recorded at the level of detail you specify, and Tally has the
capacity to handle millions of transactions – more than you are ever likely to need.
Debit and credit entries in the books are kept separate to highlight the effect of each
transaction and the difference between the sum of all the debit amounts and the sum of all
the credit amounts provides the balance of the account.
Accounts, and the ledgers they contain, are specified as effecting assets, liabilities, income or
expense. In this way, Tally can produce a Profit and Loss Account and Balance Sheet
immediately after each transaction has been entered, as well as a comprehensive range of
other financial statements and reports.

16
PRE-DEFINED GROUPS
By default, Tally Prime provides a list of Groups called pre-defined groups. The user can
create any number of Primary Groups and Sub Groups which are again grouped under a
Primary Group/Sub Group.
There are 28 pre-defined Groups in Tally Prime, out of which 15 are Primary Groups and 13
are Sub-Groups.
15 Primary Groups 13 Sub Groups
Capital Account Reserves & Surplus
Loans (Liability) Bank OD A/c
Secured Loans
Unsecured Loans
Current Liabilities Duties & Taxes
Provisions
Sundry Creditors
Fixed Assets
Investments
Current Assets Stock-in-hand
Deposits (Asset)
Loans & Advances (Asset)
Sundry Debtors
Cash-in-hand
Bank Accounts
Branch / Divisions
Misc. Expenses (ASSET)
Suspense A/c
Sales Accounts
Purchase Accounts
Direct Incomes
Direct Expenses
Indirect Incomes
Indirect Expenses

17
Out of the 15 Primary Groups, 9 Primary Groups appear in the Balance Sheet which are Capital
in nature and 6 Primary Groups appear under Profit & Loss Account which are Revenue in
nature. 13 Sub Groups are classified under the 15 Primary Groups and they appear in the
Balance Sheet.

18
PRE-DEFINED LEDGERS IN TALLY PRIME
There are two pre-defined ledgers available in Tally Prime, they are:
Cash
This Ledger is created under the Group Cash-in-hand. You can enter the opening balance as
on the date of books beginning from. You can also alter the name and even delete the Ledger.
Profit and Loss Account
This Ledger is created under the Group Primary. Previous year’s Profit or Loss is entered as
the opening balance for this ledger. The balance entered here is treated as the opening
profit/loss and shown in the Balance Sheet as opening balance of Profit and Loss account in
the Liabilities side. You cannot delete this ledger, but you can modify the same.

CREATING A LEDGER
There are two modes for creation of Ledger accounts : Single Ledger Mode and Multiple
Ledger Mode
Creating a Single Ledger
By default, Tally Prime contains two Ledger accounts namely, Cash (Under Cash-in- Hand) and
Profit and Loss Account (direct Primary Account). You need to create all other accounts heads.
There are no restrictions in Ledger creation except that you cannot create another Profit &
Loss A/c. Any number of Cash Accounts may be created in any other name for ex: Petty Cash.

Gateway of Tally Gateway of Tally

 
Select Create Select Go To Menu (ALT+G)
 (or) 
Select ledger Select Create Master
 
Single Ledger Creation Form Select ledger
 
Press Enter to create Single Ledger Creation Form

Press Enter to create

19
20
Creating Multi Ledgers
You can create multi Ledgers at a time in this mode. This will save the time of the user.

Gateway of Tally

Select Chart of Accounts

Select ledgers

Single Multi Masters (Alt+H)

Select Multi Create

Multi Ledger Creation Form

Press Enter to create

S.No
This is auto generated.
Name of Ledger
Enter the name of the Ledger.
Under
If you select All Items in Under Group field, you have the option to select the group in this
column.
Opening Balance
This is the balance remaining when you first enter your books on Tally Prime, i.e., the date of
beginning of books. If you have opted to maintain balances bill-by-bill, you must give the bill
details.
Dr/Cr
Specify whether the Opening Balance is Debit or Credit. Tally Prime follows the normal
accounting principles of accounting.

21
22
Displaying the List of Accounts
The list accounts in Tally Prime can be displayed as under :

Gateway of Tally

Select Chart of Accounts

Select ledgers

List of Ledgers

Press F5 for ledger View

23
Altering a Ledger Account
Alteration of Account Ledgers is possible under Single Ledgers as well as Multi Ledgers mode.
Altering Single Ledgers

Gateway of Tally Gateway of Tally

 
Select Alter Select Go To Menu (ALT+G)
 
Select ledger Select Alter Master
 (OR) 
Select the Ledger Account to Select ledger
alter 
 Select the Ledger Account to
Single Ledger Alteration Form alter
 
Press Enter to save changes Single Ledger Alteration Form

Press Enter to save changes

24
Altering Multiple Ledgers

Gateway of Tally

Select Chart of Accounts

Select ledgers

Single Multi Masters (Alt+H)

Select Multi Alter

Select All Items

Multi Ledger Alteration Form

Press Enter to create

25
Deletion of Ledgers:
You can delete the ledger if no vouchers have been created under this ledger.
If you want to delete a Ledger for which Vouchers have been created, then you have to first
delete all the Vouchers from that Ledger and then delete the Ledger Account.

Gateway of Tally Gateway of Tally

 
Select Alter Select Go To Menu (ALT+G)
 
Select ledger Select Alter Master
 
Select the Ledger Account to (or)
Select ledger
delete 
 Select the Ledger Account to
Single Ledger Alteration Form delete
 
Press Alt+D Single Ledger Alteration Form
 
Press Enter to Delete Press Alt+D

Press Enter to Delete

26
Display Trial Balance
A Trial Balance is a summary of all ledger balances to check whether the figures are correct
and balanced. Considering that the journal entries are error-free and posted correctly to the
general ledger, the total of all debit balances should equal the total of all the credit balances.
In Tally Prime, the matching of the Trial Balance is a foregone conclusion since all voucher
entries are in Debit - Credit format and must balance at the entry point.
To view the Trial Balance

Gateway of Tally Gateway of Tally

 

Select Display More Reports Select Go To Menu (Alt+G)

 (or) 

Select Trail balance Select Trail balance

 

Press F5 for Ledger-Wise Trail Press F5 for Ledger-Wise Trail

Balance Balance

27
PRACTICE PROBLEMS
1. Create the following ledger accounts in Tally 9
S.No Name of the Account Dr Cr
1 Share capital 298,000
2 Land and buildings 120,000
3 Machinery 85,000
4 Motor vehicles 76,000
5 Closing Stock 23,400
6 Purchases 265,500
7 Sales 490,100
8 Salaries and wages 79,200
9 B's A/C 256,000
10 C's A/C 199,200
11 Telephone charges 6,500
12 Electricity charges 5,200
13 Insurance 4,500
14 Interest received 22,500
15 Traveling expenses 7,500
16 Bank A/C 68,000
17 Motor expenses 7,750
18 Repairs 2,100
19 Printing and stationery 3,150
20 Sales Returns 16,500
21 Purchase Returns 2,500
22 Fuel and Power 10,000
23 Loan from Bank 25,000
24 Carriage on Purchases 2,000
25 Discount received 1,000

28
2. Create the following ledger accounts in Tally 9
S.No Name of the Account Dr Cr
1 Salaries 36,320
2 Sales 173,500
3 Plant & Machinery 34,300
4 Commission Paid 1,880
5 Closing Stock 11,100
6 Repairs 1670
7 General Expenses 460
8 Sales Returns 1,000
9 Discount Allowed 1,150
10 Rent and Rates 3,220
11 Purchases 144,670
12 A's A/C 1,430
13 Travelling Expenses 2,630
14 Carriage Inward 240
15 B's A/C 14,260
16 Capital 62,500
17 Drawings 3,500
18 Bank A/C 1,090
19 Purchase Returns 400
20 Investments 6,000

29
3. Identify the ledger accounts required to record the following transaction in Tally 9
Date Amount (in RO)
2018
Jan 1 Opening Balances : Buildings 40,000
Cash 25,000
Machinery 30,000
Al Anwar Trading LLC 15,000 (Dr)
Al Mawarid Company 20,000 (Cr)
Capital ?
Jan 2 Deposited into Bank 15,000
Jan 31 Purchased goods and paid by cheque 5,000
Feb 1 Purchased goods from Musandam Marketing and 10,000
Trading Co. and got 5% trade discount
Feb 2 Brought additional capital into business 25,000
Mar 1 Received from Al Anwar Trading LLC in full settlement by 14,500
cheque
Mar 2 Goods distributed as free samples 2,000
Mar 31 Cash purchases 3,500
Apr 1 Sold goods to Oman International Trading LLC and 12,000
offered 7% trade discount
Apr 2 Goods returned to Musandam Marketing and Trading 500
Co.
May 1 Goods taken by proprietor for personal use 1500
May 2 Paid Insurance premium 250
May 31 Purchased Furniture from Taghleef Industrial Company 20,000
June 1 Sold goods to Tomoor Oman and offered 10% cash 8,000
discount
June 2 Received Commission 750
July 1 Goods returned by Oman International Trading LLC 600
July 2 Paid Musandam Marketing and Trading Co. by cheque 6,000
July 31 Received from Oman International Trading LLC 4,500
Aug 1 Cash taken by proprietor for personal use 2,000
Aug 2 Sold machinery worth of RO 3500 for RO 2800
Aug 31 Withdrew from bank 2,500
Sep 1 Paid Musandam Marketing and Trading Co. in full 2,700
settlement
Sep 2 Received from Oman International Trading LLC in full 5,800
settlement
Oct 1 Paid salaries and Wages through bank transfer 3,000
Oct 2 Paid the amount due to Al Mawarid Company

30
Date Name of the Account Name of the Account Type of Voucher

2018 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Aug 31

Sep 1

Sep 2

Oct 1

Oct 2

31
 Module 3
Module Objectives
When you have completed this Module, you will be able to:

 Describe the purpose of the Tally vouchers.

 Use vouchers to record accounting transactions.
 Generate Daybook
 Modify or delete vouchers recorded in the Tally

32
PRE-DEFINED VOUCHERS
Tally comprises of the following predefined Vouchers, to suit different business requirements
for recording various transactions. Tally also allows you to create user-defined Vouchers
(Voucher Types) as per your requirements.
 Payment voucher
 Receipt voucher
 Contra voucher
 Journal voucher
 Credit note voucher
 Debit note voucher
 Sales voucher
 Purchase voucher

33
PRE-DEFINED VOUCHERS
The function of each voucher type is now explained.
Payment Voucher
All the payments made by cash and cheque payments will be recorded in the payment
voucher.

Receipt Voucher
All the cash and cheque receipts will be recorded in the receipt voucher.

Sales Voucher
The credit sales of goods will be recorded in the sales voucher.

Purchase Voucher
The credit purchases of goods will be recorded in the purchase voucher.

Credit Note Voucher

The goods returned by the customer (Sales Returns) will be recorded in the credit note
voucher.

Debit Note Voucher

The goods returned to the supplier (Purchase Returns) will be recorded in the debit note
voucher.

Contra Voucher
If only Bank A/c and cash A/c are involved in a transaction, then that transaction will be
recorded in contra voucher. The examples of contra entries :
(a) Cash deposited into Bank
(b) Cash withdrawn from bank for office use
(c) Funds Transfer to one bank A/C to another Bank A/C

Journal Voucher
The transactions which are not covered in the above vouchers will be recorded using journal
voucher.

34
DISPLAY DAY BOOK
The Day Book lists all transactions made in a particular day and by default displays the last
voucher entry date of a regular voucher. It could also be set up to list all the transactions
made over a certain period. Transactions include all financial vouchers, reversing and
memorandum journals as well as inventory vouchers.
In Tally Prime, the Day Book is by default displayed for the current date (as on the last date
of voucher entry). However, you may specify the required period, as per your requirements.
To view the Day Book,

Gateway of Tally Gateway of Tally

 
Select Day Book Select Go To Menu (Alt+G)
 
Press ALT+F2 to change period to Select Day Book
(or)
1-1-2021 to 31-12-2021


Press ALT+F2 to change period to
Daybook 1-1-2021 to 31-12-2021
 
Press ALT+F5 for detailed Daybook

Press ALT+F5 for detailed

35
36
Altering a Voucher

Gateway of Tally Gateway of Tally

 

Select Day Book Select Go To Menu (Alt+G)

 

Press ALT+F2 to change period to Select Day Book

1-1-2021 to 31-12-2021 
 Press ALT+F2 to change period to
Daybook 1-1-2021 to 31-12-2021

 

Press ALT+F5 for detailed Daybook

(or)
 

Select the Voucher to Alter Press ALT+F5 for detailed

 

Voucher Alteration form Select the Voucher to Alter

 

Press Enter to Save Changes Voucher Alteration form


Press Enter to Save Changes

37
38
Deleting a Voucher

Gateway of Tally Gateway of Tally

 

Select Day Book Select Go To Menu (Alt+G)

 

Press ALT+F2 to change period to Select Day Book

1-1-2021 to 31-12-2021 
 Press ALT+F2 to change period to
Daybook 1-1-2021 to 31-12-2021

 

Press ALT+F5 for detailed Daybook

(or)
 

Select the Voucher to Delete Press ALT+F5 for detailed

 

Voucher Alteration form Select the Voucher to Alter

 

Press Alt+D Voucher Alteration form

 

Press Enter to delete Press Alt+D


Press Enter to delete

39
PRACTICE PROBLEMS
1. Record the following transactions in Tally Prime

Jan 1 : Opening Balances : Buildings A/C : RO 25000

Furniture A/C : RO 15000
Cash A/C : RO 10000
Bank A/C : RO 5000
A’s A/C : RO 10000 (Dr)
B’s A/C : RO 5000 (cr)
Capital A/C : ?
Jan 2 : Brought additional capital into Business : RO 25000
Jan 31: Purchased goods : RO 2000
Feb 1 : Received from ‘A’ by cheque : RO 4000
Feb 2 : Paid carriage Inwards : RO 300
Mar 1 : Cash Sales : RO 4000
Mar 2 : Paid Factory Insurance : RO 200
Mar 31 : Cash taken by proprietor for personal use : RO 1000
Apr 1 : Received rent by cheque : RO 600
Apr 2 : Paid ‘B’ : RO 2000
May 1 : Paid Salaries and Wages : RO 1500
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

40
2. Record the following transactions in Tally Prime

2021 Amount (in RO)

Jan 1 Opening Balances :
Cash A/C 25,000
Bank A/C 40,000
Machinery A/C 50,000
Furniture A/C 40,000
Land and Buildings A/C 60,000
Sohar International Urea & Chemical Industries A/C 25,000 (Dr)
Loan from bank against Land and Buildings 30,000
Steinweg Oman L.L.C A/C 15,000 (Cr)
Capital A/C ?
Jan 2 Brought additional capital into business 50,000
Jan 31 Purchased goods and paid by Cheque 10,000
Feb 1 Deposited into bank 35,000
Feb 2 Cash Sales 20,000
Mar 1 Sold goods to Al-Batina International Engineering & Services 25,000
and offered 10% trade discount
Mar 2 Purchased goods from Majis Industrial Services Company and 12,000
got 5% trade discount
Mar 31 Withdrew from bank 10,000
Apr 1 Goods returned to Majis Industrial Services Company 2,000
Apr 2 Sold furniture worth of RO 4000 for RO 3200
May 1 Paid Carriage Outwards 2,000
May 2 Goods returned by Al-Batina International Engineering & 2,500
Services
May 31 Withdrew from bank for personal use 4,000
June 1 Goods distributed as free samples 3,000
June 2 Paid Wages by cheque 12,000
July 1 Received from Al-Batina International Engineering & Services by 10,000
cheque
July 2 Sold goods to SPT Middle East Company and offered 10% cash 18,000
discount
July 31 Purchased Equipment from Larsen & Toubro Heavy Engineering 50,000
LLC
Aug 1 Received from Sohar International Urea & Chemical Industries 23,000
in full settlement
Aug 2 Goods taken by proprietor for personal use 2,500
Aug 31 Purchased goods from Sharq Sohar Steel Rolling Mills 8,000
Sep 1 Received rent by cheque 6,500
Sep 2 Paid Steinweg Oman L.L.C by cheque 10,000
Oct 1 Received from Al-Batina International Engineering & Services in 9,000
full settlement
Oct 2 Paid Majis Industrial Services Company in full settlement 8,200
Oct 31 Paid Salaries 9,500

41
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Aug 31

Sep 1

Sep 2

Oct 1

Oct 2

Oct 31

42
3. Record the following transactions in Tally Prime

Date Amount (in

RO)
2021
Jan 1 Opening Balances : Buildings A/C 40,000
Furniture A/C 25,000
Cash A/C 10,000
Bank A/C 12,500
Al Kamil Steel Product Company A/C ( Dr. Balance) 10,000
Bank overdraft 7,500
Capital A/C ?
Jan 2 Brought additional capital into the business 30,0`00
Jan 31 Deposited into bank 20,000
Feb 1 Purchased goods and paid by cheque 5,000
Feb 2 Purchased goods from Taghleef Industrial Company and 15,000
got 5% trade discount
Mar 1 Cash Sales 10,000
Mar 2 Goods returned to Taghleef Industrial Company 1,000
Mar 31 Purchased Equipment from Oman National Engineering 20,000
Company
Apr 1 Withdrew from bank for office use 2,000
Apr 2 Sold goods to National Industries 15,000
May 1 Paid Wages and Salaries 3,000
May 2 Goods returned by National Industries 1,500
May 31 Paid carriage inwards 1,500
June 1 Received Commission 2,000
June 2 Received from National Industries 8,000
July 1 Paid to Taghleef Industrial Company 10,000
July 2 Received from Al Kamil Steel Product Company in full 9,500
settlement
July 31 Paid to Taghleef Industrial Company in full settlement 3,000
Aug 1 Goods Distributed as free samples 5,000
Aug 2 Received a cheque from National Industries in full 5,000
settlement
Aug 31 Cash taken by proprietor for personal use 1,000
Sep 1 Paid Telephone charges by cheque 300
Sep 2 Paid Rent 2,000
Oct 1 Paid for Fuel and Power 1,000

43
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Aug 31

Sep 1

Sep 2

Oct 1

44
4. Record the following transactions in Tally Prime

Date 2021 Amount (in RO)

Jan 1 Opening Balances : Bank A/C 50000
Cash A/C 25000
Machinery A/C 45000
Furniture A/C 25000
National Industrial Services Co LLC A/C 12500 (Dr)
Jabal Oman LLC A/C 10000 (Cr)
Loan from bank against machinery 20000
Capital A/C ?
Jan 2 Brought additional capital into business 50000
Jan 31 Deposited into bank 30000
Feb 1 Purchased goods from Voltamp Manufacturing Co. LLC and got 10000
10% trade discount
Feb 2 Sold goods to Al-Nahdah Construction And Energy Services and 15000
offered 5% trade discount
Mar 1 Goods returned to Voltamp Manufacturing Co. LLC 2000
Mar 2 Cash Sales 25000
Mar 31 Paid to Voltamp Manufacturing Co. LLC 4000
Apr 1 Goods returned by Al-Nahdah Construction And Energy Services 3000
Apr 2 Paid Carriage inwards 300
May 1 Received Commission by cheque 2600
May 2 Paid Jabal Oman LLC in full settlement 9500
May 31 Received from Al-Nahdah Construction And Energy Services by 6000
cheque
June 1 Sold Furniture worth of RO 2500 for RO 2800
June 2 Goods taken by proprietor for personal use 1000
July 1 Paid Wages 3400
July 2 Withdrew from bank 4000
July 31 Goods distributed as free samples 4500
Aug 1 Paid Carriage Outwards 250
Aug 2 Purchased goods from Galfar Engineering & Contracting LLC 6000
and got 6% cash discount
Sep 1 Paid to Voltamp Manufacturing Co. LLC in full settlement 2600
Sep 2 Sold Machinery worth of RO 4000 for RO 3600
Oct 1 Received from Al-Nahdah Construction And Energy Services in 5000
full settlement
Oct 2 Purchased Equipment from Middle West Oilfield Services 30000
Oct 31 Cash taken by proprietor for personal use 2000
Nov 1 Paid salaries through bank transfer 7500

45
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Sep 1

Sep 2

Oct 1

Oct 2

Oct 31

Nov 1

46
5. Record the following transactions in Tally Prime

Date Amount (in RO)

2021
Jan 1 Cash A/C 11,000
Machinery A/C 50,000
Bank A/C 32,500
Areej Products Company 12,500 (Cr)
National Packaging Factory A/C 15,000 (Dr)
Capital A/C ?
Jan 2 Purchased goods and paid by cheque 7,500
Jan 31 Purchased goods from Oman Chemical Industries 12,500
Feb 1 Cash Sales 20,000
Feb 2 Sold goods to Taageer Services and offered 10% trade 15,000
discount
Mar 1 Purchased goods from Raysut Industries Company and 8,000
received 5% trade discount
Mar 2 Cash withdrawn from bank by proprietor for personal 1,200
use
Mar 31 Sold Machinery worth of RO 3500 for RO 3,250
Apr 1 Goods returned to Oman Chemical Industries 1,500
Apr 2 Paid to Areej Products Company in full settlement 12,000
May 1 Goods returned by Taageer Services 1,000
May 2 Paid carriage on purchases 200
May 31 Withdrew from bank for office use 1,500
June 1 Brought additional capital into business 40,000
June 2 Received cash from National Packaging Factory 6,000
July 1 Purchased Equipment from Oman International LLC 11,500
July 2 Paid Insurance on Office Building 1,350
July 31 Paid for fuel and Power 850
Aug 1 Cash taken by proprietor for personal use 2,000
Aug 2 Sold goods to L&T Industries and offered 10% cash 16,000
discount
Aug 31 Goods distributed as free samples 2,500
Sep 1 Deposited into Bank 15,000
Sep 2 Received cash from National Packaging Factory in full 8,750
settlement
Oct 1 Received interest 150
Oct 2 Paid Electricity charges by cheque 1,100
Oct 31 Paid Salaries and Wages 2,500

47
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Jan 2

Jan 31

Feb 1

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Aug 31

Sep 1

Sep 2

Oct 1

Oct 2

Oct 31

48
6. Record the following transactions in Tally Prime

Date Amount (in RO)

2021
Jan 1 Cash A/C 42,000
Building A/C 50,000
Machinery A/C 25,000
Orix trading LLC A/C 15,000 (Dr)
Loan from Bank A/C 12,000
Capital A/C ?
Feb 2 Deposited into Bank 20,000
Mar 1 Purchased goods and paid by cheque 7,500
Mar 2 Purchased goods from Musandam Trading Co. and got 5% 6,000
trade discount
Mar 31 Brought additional capital into business 25,000
Apr 1 Received from Orix Trading LLC in full settlement by cheque 14,000
Apr 2 Goods distributed as free samples 2,000
May 1 Cash purchases 3,500
May 2 Sold goods to Oman International Trading LLC and offered 9,000
7% trade discount
May 31 Goods returned to Musandam Trading Co. 1,000
June 1 Goods taken by proprietor for personal use 2,000
June 2 Paid Insurance premium 250
July 1 Purchased Furniture from Taghleef Industrial Company 20,000
July 2 Sold goods to Tomoor Oman and offered 10% cash 10,000
discount
July 31 Cash Sales 6,000
Aug 1 Received Commission 2,500
Aug 2 Goods returned by Oman International Trading LLC 1,200
Aug 31 Paid Musandam Trading Co. by cheque 3,000
Sep 1 Received from Oman International Trading LLC 4,000
Sep 2 Sold Furniture worth of RO 2000 for RO 2500
Oct 1 Cash taken by proprietor for personal use 3,500
Oct 31 Sold machinery worth of RO 1500 for RO 1200
Oct 31 Withdrew from bank 2,500
Nov 1 Paid Musandam Trading Co. in full settlement 1,500
Dec 1 Received from Oman International Trading LLC in full 3,000
settlement
Dec 31 Paid salaries and Wages through bank transfer 6,000

49
Date Name of the Account Name of the Account Type of Voucher

2021 Dr Cr

Feb 2

Mar 1

Mar 2

Mar 31

Apr 1

Apr 2

May 1

May 2

May 31

June 1

June 2

July 1

July 2

July 31

Aug 1

Aug 2

Aug 31

Sep 1

Sep 2

Oct 1

Oct 31

Oct 31

Nov 1

Dec 1

Dec 31

50
 Module 4

Module Objectives
When you have completed this Module, you will be able to:
 Generate Income Statement
 Generate Balance Sheet
 Generate any other reports as required

51
DISPLAY INCOME STATEMENT

Profit and Loss Account or Income Statement is a periodic statement, which shows the net
result of business operations for a specified period. All the expenses incurred and incomes
earned during the reporting period are recorded in the Profit and Loss account or Income and
Expenditure account.
The profit and loss account in TallyPrime displays the information based on the default
primary groups. It is updated instantly with every transaction/ voucher that is entered and
saved. No special processing is required to produce a profit and loss account in TallyPrime.

To view the Profit & Loss Account of your company,

Go to Gateway of Tally → Profit & Loss A/C → Press ALT+F5 for detailed

The Profit & Loss Account is displayed as shown:

52
DISPLAY BALANCE SHEET
A Balance Sheet is a financial statement that reports a firm's financial position at a specific
time. The term balance sheet implies that a report shows the balance between two figures. It
shows a balance between the assets and liabilities of a firm and the owner's funds. The
fundamental accounting equation applicable is therefore, Assets = Liabilities + Owner's
Equity.
To view the Balance Sheet:
Go to Gateway of Tally → Balance Sheet → Press ALT+F5 for detailed

53
DISPLAY SUMMARY OF LEDGER ACCOUNTS
The Summary of Ledger Accounts can be generated by as under :

Gateway of Tally

Select Display More Reports


Select Account Books

Select Ledger

Select the Account from the List of Accounts

Select period from 1-1-2022 to 31-12-2022 (F2)

Ledger Account

54
GENERATION OF OTHER REPORTS USING TALLY

Gateway of Tally

Select GoTo (Alt+G)

Select the required Report

55
 Module 5
Module Objectives
When you have completed this Module, you will be able to:
 The basic functions of the Tally PRIME Inventory System
 Creating and maintaining Inventory Masters
 Creating and maintaining stock details
 Creating stock items and entering opening balances

56
Inventory accounting includes recording of stock details like the purchase of stock, the sale of
stock, stock movement between storage locations or godowns and providing information on
stock availability. Tally Prime makes it possible to integrate the inventory and accounting
systems so that the financial statements reflect the closing stock value from the Inventory
system. The inventory system operates in much the same way as the accounting system.
1. First you set up the inventory details, which is a similar operation to creating the chart
of accounts although, in this case, there are no pre-defined set of stock groups.
2. Second, you create the individual stock items, which is similar to setting up the
ledgers.

INVENTORY INFORMATION
The Inventory Info menu, lists the inventory masters like Stock Group, Stock Items, Units of
Measure of the company, using which you can create, alter and display the inventory master
details.
Before you start entering inventory information, ‘Maintain Inventory’ option under company
features (F11) should be changed to YES

57
3.1 STOCK GROUPS
Stock Groups are provided to help in the classification of stock items. Classification is done
based on some common behaviour. Grouping stock items makes it easy to identify and report
them in the statements.
Let us consider the following example for creating Inventory information in Tally Prime

Stock Category Units Salalah Duqm Cost per

Unit
(OMR)
Home Appliances
Washing Machine
Manual Ikon Boxes 30 60 40
Semi-Automatic Gpass Nos 288 192 60
Fully Automatic Bosch Packs 180 120 90
Cooking Range
2 Burners Super Boxes 70 50 25
General
4 Burners Hisense Packs 110 130 40
4 Burners with Grill Rennai Nos 150 140 80
Music Systems
Audio
Channel 2.1 Sony Boxes of 80 60 200
5No.s
Channel 4.1 Boss Packs 100 140 220
Hifi system with5.1 JBL Nos 40 60 250
Television
Full HD Samsung Boxes 40 20 220
UHD LG Packs 16 24 280
Curved TCL Nos 10 16 320

58
3.1.1 Creating Stock Group
i. Create the Stock Group – Home Appliances under Primary.

Gateway of Tally

Select Create

Select Stock Group under Inventory Masters

Stock Group Creation Form

Press Enter to create

Ensure that the screen appears as shown below:

Press Y or Enter to accept the screen.

Similarly, create Music Systems under Primary.

59
ii. Create Washing Machine under Home Appliances.
The screen is displayed as shown below:

Press Y or Enter to accept the screen.

Also create Cooking Range under Home Appliances, Audio under Music Systems and
television Under Music Systems.

3.2 STOCK CATEGORIES

This is a feature, which offers a parallel classification of stock items. Like Stock Groups, Stock
categories are also classified based on some similar behaviour. The advantage of using
Tally Prime lies in categorising Stock items together, (based on functionality) across different
stock groups.
3.2.1 Creating Single Stock Category

Gateway of Tally

Select Create

Select Stock Category under Inventory Masters

Stock Category Creation Form

Press Enter to create

60
i. Create Stock Category Ikon Under Primary

Press Y or Enter to accept the screen.

Similarly , Create Gpass, Bosch, Super General, Hisense, Rennai, Sony, Boss, JBL, Samsung, LG
and TCL under Primary.

3.2.1 Creating Multiple Stock Category

Gateway of Tally

Select Chart of Accounts

Select Stock category under Inventory Masters

Select Multi Masters (Alt+H)

Select Multi Create

Multi Stock Category Creation Form

Select ‘All Items’

Press Enter to create

61
62
3.3 LOCATIONS
A place where stock items are stored is referred to as Location. You can specify where the
stock items are kept. For example: A warehouse, shelf or rack etc, and obtain stock reports
for each Location and account for the movement of stock between locations.

3.3.1 Creating a Location :

Gateway of Tally

Select Create

Select Stock Location under Inventory Masters

Stock Location Creation Form

Press Enter to create

i. Create a Location – Salalah under Primary.

Ensure that the screen is displayed as shown below:

Press Y or Enter to accept the screen.

Similarly create Duqm under primary.

63
64
3.4 UNITS OF MEASURE
Stock Items are mainly purchased and sold on the basis of quantity. The quantity in turn is
measured by units. In such cases, it is necessary to create the Unit of Measure. The Units of
Measure can either be simple or compound. Examples of simple units are: nos., metres,
kilograms, pieces etc. Examples for compound units are: a box of 10 pieces etc. Create the
Units of Measure before creating the Stock Items.

3.4.1 Creating Simple Units of Measure :

Gateway of Tally

Select Create

Select Unit under Inventory Masters

Unit Creation Form

Under Type Select “Single”

Press Enter to create

Ensure that the screen appears as shown below:

65
3.4.1 Creating Compound Units of Measure :
Gateway of Tally

Select Create

Select Unit under Inventory Masters

Unit Creation Form

Under Type Select “Compound”

Press Enter to create

66
Before creation of the compound units of measure, the two units used need to be created
under simple units of measure. For creating a compound unit of ‘Boxes of 5 No.s’, first you
need to create Boxes and Units as simple units of measure.

3.5 STOCK ITEMS

Stock items are goods that you manufacture or trade (sell and purchase). It is the primary
inventory entity. Stock Items in the Inventory transactions are similar to ledgers being used
in accounting transactions. Therefore, Stock Items are important in an inventory just as
ledgers are important in accounting.

3.5.1 Creating a Single Stock Item

Gateway of Tally

Select Create

Select Stock Item under Inventory Masters

Stock Location Creation Form

Press Enter to create

67
Enter the following details:
Name: The name of the stock item.
Under: The stock group under which you want to classify the stock item.
Category: The stock category you want to classify the stock item for parallel classification.
Units: The unit of measure for the stock item being created.
Rate of Duty: Enter the rate of duty charged on the item.
Opening Balance: The opening balance of a stock item, refers to the stock available with us.
Godowns that have already been created, must have the opening balance quantity and the
location specified.
You need to enter the total quantity in all the locations. After entering the total quantity, the
quantity in each location can be entered as under :

68
69
3.5.1 Creating a Multiple Stock Item
Gateway of Tally

Select Chart of Accounts

Select Stock Item under Inventory Masters

Select Multi Masters (Alt+H)

Select Multi Create

Multi Stock Item Creation Form

Select ‘All Items’

Press Enter to create

70
71
3.6 GENERATING STOCK SUMMARY REPORT
The Stock summary report can be generated be selecting Stock Summary from gateway of
Tally. Then Select F5 to get report Stock Item Wise and also select ALT+F5 for detailed.

72
PRACTICE PROBLEMS

1. Create your company and record the following stock items in Tally Prime
Cost per
Stock Category Units Muscat Nizwa
unit
HOME & LIVING
Kitchen Appliances
Microwaves Ikon Nos 15 25 27.900
Juicers Braun Nos 12 16 12.600
Black and
Coffee Makers Deckers Nos 12 25 19.300
Home Appliances
Vacuum Cleaners Hitachi Nos 14 8 26.900
Sewing Machines Singer Nos 12 16 46.500
Air Purifiers Samsung Nos 10 4 127.000
Luggage
Soft Trolleys Sky bags Nos 42 26 39.900
Hard Trolleys Wagon R Nos 32 21 27.900
Laptop Bags Puma Nos 16 8 11.900

GROCERY
Cold Beverages
Instant Flavored Drink Foster Clark Kgs 125 80 3.480
Box of 12
Water Oman oasis Nos 220 140 0.890
Pack of 9
Juice Rani Nos 300 240 0.570
Cooking Ingredients
Olive Oil Figaro Litres 125 75 2.550
Frying Oil Khafeef Litres 250 120 16.800

ELECTRONICS
Camera Store
SLR Cameras Nikon Nos 24 16 189.900
Digital Cameras Canon Nos 18 8 38.000
Action Camera ThiEye Nos 10 12 59.900
Computer Devices
Laptops Asus Nos 34 16 72.900
Desktops Dell Nos 22 21 204.900
Gaming Laptops HP Nos 6 4 469.900

73
2. Create your company and record the following stock items in Tally Prime

Al Cost per
Stock Category Units Ruwi
Ghubra unit
GROCERY
Breakfast and spreads
Instant Oats pouch Qateo Kgs 30 60 0.750
Pack of 2
2.580
Honey Capilona Nos 288 192
Apricot Jam Hartley’s Nos 180 120 1.210
Fresh Food
330 ml Greek Yoghurt
3.525
drink Nada Nos 70 50
Organic Almond milk Pure Harvest Litres 110 130 2.950
200 ml Laban up drink Almarai Nos 150 140 5.200

ELECTRONICS
Audio
Bluetooth earphone Ikon Nos 80 60 4.500
Wireless Ear buds Aukey Nos 100 140 9.300
Gaming headset JBL Nos 40 60 17.800
TV
40-inch Smart TV Samsung Nos 40 20 85.500
55 inches LED TV LG Nos 16 24 636.500
ULED ultra-HD smart Hisense Nos 10 16 329.850

LIFESTYLE
Bags and Wallets
Women’s bag John louis Nos 48 32 9.900
Sling bag Eten Nos 36 16 10.450
Backpack Debackers Nos 20 24 19.900

74
3. Create your company and record the following stock items in Tally Prime

Stock Category Units Muscat Salalah Cost per unit

LIVING ROOM
Sofa Sets
3 seater fabric sofa bed Carissa Nos 25 50 77.900
3+2+1 Fabric sofa set Esteban Nos 24 32 110.600
1 seater Fabric sofa set Krist Nos 24 50 59.300
Wall Decor
Photo Frame Petite Nos 38 20 4.500
Glass wall clock Stalpa Nos 24 32 2.250
Stone Wall clock Verse Nos 20 8 127.000
Chandeliers
Neon Chandeliers Razzy Nos 80 20 51.900
Candle Hanging
24.500
Chandelier Nadia Nos 64 42
Crystal Hanging
121.430
Chandelier Hidayat Nos 32 16
OUTDOOR
Dining sets
Marble dining set Glazy Nos 150 60 369.550
Steel dining set Oman oasis Nos 220 140 66.500
Dining table Helen Nos 300 240 0.570
Outdoor play
Kids Slde Kids play Nos 250 150 42.550
Kids slide football goal Kids play Nos 250 120 56.800
Activity swing Playwell Nos 150 100 74.800

75
4. Create your company and record the following stock items in Tally Prime

Stock Category Units Cost Muscat Salalah Ibra

GROCERY
Baby & Kids
Baby Powder Johnson Nos 0.875 30 45 15
Mixed Fruits Cereal Hero Baby Nos 0.400 120 160 80

MOBILES AND
GADGETS
Mobiles
Smart Phones Apple Nos 349.000 65 43 42
Feature Phones Nokia Nos 21.500 20 15 10
Wearable gadgets
Smart Watches Huawei Nos 94.900 32 26 24
Fitness Trakers Xiaomi Nos 12.900 16 15 13

FRESH FOOD
Fruits vegetables
Salad vegetables Tom Cherry Kgs 6.760 45 40 20
Fresh Juice Lulu Litres 1.150 80 90 50
Bakery
Cakes Americana Packs 0.640 220 180 100
Bread Dahabi Grams 0.100 100 120 100

76
Contact Information
Dr. T V V Phani Kumar
Office No. BS 047
Ext : 5216
email : phani.kumar@hct.edu.om

77