Tally Erp9 Lesson 23 Set Up Tally

 Module 23 . Set up Tally ERP 9 for Balance Sheet Preparation

Open Tally ERP 9: Launch the Tally ERP 9 software.

Create a Company: If you’re starting fresh, create a new company by selecting “Create Company” from the main menu. Enter the necessary details such as company name, address, financial year, and books beginning from the date.

2. Configure Balance Sheet Settings

Enable Accounting Features:

Go to Gateway of Tally > F11: Features > F1: Accounting Features.

Make sure the options under “General” are enabled, such as “Maintain Accounts” and “Enable Inventory.”

Set Up the Chart of Accounts:

Under Gateway of Tally > Accounts Info. > Ledger > Create, create ledgers for the assets, liabilities, income, and expenses accounts.

Set up groups like Fixed Assets, Current Assets, Loans, Sundry Creditors, and Sundry Debtors under the respective heads.

For each ledger, select the appropriate group and enter opening balances if any.

3. Enter Transactions

Record Purchase and Sales Transactions:

Go to Accounting Vouchers.

Use F9: Purchase to record any purchases, and F8: Sales to record sales.

Record Receipts and Payments:

For money coming into the business (like customer payments), use F6: Receipt.

For payments (like vendor payments), use F5: Payment.

Record Journal Entries for non-cash transactions:

Go to F7: Journal.

Record entries for adjustments like depreciation or transfer of funds between accounts.

4. Generate the Balance Sheet

View the Balance Sheet:

Go to Gateway of Tally > Balance Sheet.

Tally ERP 9 will automatically generate the balance sheet based on the entries you’ve made.

Check for Errors and Adjustments:

If the balance sheet isn’t balanced (Assets ≠ Liabilities + Equity), you may need to review your entries.

Check for missing entries or errors in your ledgers.

5. Export or Print the Balance Sheet

Export:

Select Alt + E (Export), choose the format (PDF, Excel, etc.), and specify the destination path to save the file.

Print:

Select Alt + P (Print) to print the balance sheet directly.

Example Exercise

Let’s go through a practical exercise to illustrate the process:

Example Scenario:

You have the following details for a company, XYZ Ltd.:

Cash: $10,000

Inventory: $20,000

Equipment: $15,000

Loan Payable: $10,000

Capital: $35,000

Create the Company: Create XYZ Ltd. as a new company.

Set Up Ledgers:

Cash under Current Assets with a balance of $10,000.

Inventory under Current Assets with a balance of $20,000.

Equipment under Fixed Assets with a balance of $15,000.

Loan Payable under Loans (Liabilities) with a balance of $10,000.

Capital under Capital Accounts with a balance of $35,000.

Enter a Transaction:

Suppose you purchased additional equipment worth $5,000 on credit. Record this under F9: Purchase, adding to the Equipment ledger.

Generate the Balance Sheet:

View the balance sheet to see updated values.

Practical Exercise

Exercise 1:

Create a balance sheet with initial values: Cash: $5,000, Accounts Receivable: $8,000, Building: $50,000, Accounts Payable: $5,000, Capital: $58,000.

Record a sale of $3,000 in cash.

View and analyze the updated balance sheet.

Exercise 2:

Create another balance sheet with initial values: Cash: $7,500, Inventory: $12,000, Loan: $10,000, and Capital: $9,500.

Record a purchase of $2,000 inventory on credit.

Generate and check if the balance sheet is balanced.

Step-by-Step Explanations for Each Exercise

Exercise 1 Explanation:

By recording the sale, the cash balance increases, which should reflect in the balance sheet.

After recording, compare the new balances to confirm the changes.

Exercise 2 Explanation:

The credit purchase affects both Inventory and Accounts Payable.

Confirm the updates in the balance sheet and check for balance.

By following these steps and exercises, you should be able to effectively prepare and analyze a balance sheet in Tally ERP 9.