understanding tally

Understanding Tally

How to Work in Tally

Automatically all ledgers,Profit and loss,

Balance sheet, Trial balance will be created

Pass those entries in Tally,

Think about Entries to be passedz

How to Pass Entries

ExpensesPurchases 600Freight 100 Salary 100 Profit 400Total 1200

IncomesSales 1000Interest 200

Total 1200

Profit and Loss Account

LiabilitiesCapital 1000Profit 400Loan 200Creditors 400Total 2000

AssetsFurniture 1000Debtor 600Cash 100Bank 300Total 2000

Balance Sheet

Golden Rules for Passing Entries• All Expenses Dr• All Incomes Cr• All Assets (Increase) Dr• All liabilities (Increase) Cr • All Assets (Decrease) Cr• All liabilities (Decrease) Dr

Pass Entries

Cash brought into business as Capital Rs 100000

Particulars Dr Cr

Cash A/c Dr 100000 To Capital A/c 100000

Golden Rules for Passing EntriesAll Expenses- DrAll Incomes –CrAll Assets (Increase)-DrAll liabilities (Increase)- CrAll Assets (Decrease)-CrAll liabilities (Decrease)-Dr


Balance SheetLiabilitiesCapital 1000Profit 400Loan 200Creditors 400Total 2000

Pass Entries

Furniture purchased for Cash for Rs 10000 Particulars Dr CrFurniture A/c Dr 10000

To Cash A/c10000


LiabilitiesCapital 1000Profit 400Loan 200Creditors 400Total 2000


Balance Sheet

Pass Entries

Cash deposited in Bank Account Rs 50000

Particulars Dr Cr• Bank A/c Dr 50000

To Cash A/c 50000


Liabilities Capital 1000Profit 400Loan 200Creditors 400Total 2000


Balance Sheet

Pass Entries

Goods Purchased from ABC & Co Rs 10000

Particulars Dr Cr Purchases A/c Dr 10000

To ABC & Co A/c 10000

Amount Paid to ABC & Co by Cash 10000

Particulars Dr CrABC & Co A/c 10000

To Cash A/c 10000




Total 1200


LiabilitiesSh Capital 1000Profit 400Loan 200Creditors 400Total 2000


Pass Entries

Sales made to PQR & Co Rs 15000PQR & Co A/c Dr 15000

To Sales A/c 15000

Cheque Received from PQR & Co Rs 15000 deposited in Bank

Bank A/c Dr 15000 To PQR & Co A/c 15000




Total 1200


LiabilitiesSh Capital 1000Profit 400Loan 200Creditors 400Total 2000


Types of Entries in Tally

1. Receipt EntriesWhen Cash or Bank is debited

Cash Dr To Partyor Bank Dr To Party

2. Payment EntriesWhen Cash or Bank is credited

Party To CashOrParty To Bank

3. Contra EntriesWhen Cash is Debited and Bank is credited or vice versa

Cash Dr To Bank orBank Dr To Cash orSBI Bank Dr To ICICI Bank

Types of Entries in Tally

4. Purchase EntriesWhen Purchase A/c is debited

Purchase A/c Dr To Partyor Purchase

To Cash

5. Sales EntriesWhen Sales Account is credited

Party To SalesOrCash A/c Dr To Sales

6. Journal EntriesAll other type of entries passed in journal

For ExampleExpense Dr To Party

Determine type of entry1. Receipt EntriesWhen Cash or Bank is debited2. Payment EntriesWhen Cash or Bank is credited3. Contra EntriesWhen Cash is Debited and Bank is credited or vice versa4. Purchase EntriesWhen Purchase A/c is debited5. Sales EntriesWhen Sales Account is credited6. Journal EntriesAll other type of entries passed in journal

Cash A/c Dr 100000 To Capital A/c 100000

Receipt Entry as Cash is Debited

Furniture A/c Dr 10000 To Cash A/c 10000

Payment Entry as Cash is Credited


Bank A/c Dr 50000 To Cash A/c 50000

Contra EntryWhen Cash is Debited and Bank is credited or vice versa

Purchases A/c Dr 10000 To ABC & Co A/c 10000

Purchase Entry

Amount Paid to ABC & Co by Cash 10000

Particulars DrCrABC & Co A/c 10000

To Cash A/c 10000

Payment Entry as Cash is Credited


PQR & Co A/c Dr 15000 To Sales A/c 15000Sales Entry as Sales Account is Credited

Bank A/c Dr 15000

To PQR & Co A/c 15000

Receipt Entry as Bank is Credited

understanding tally

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