Tally Erp9 Lesson 26 To Understand How To Create And Manage Liabilities And Assets

 Module 26. To understand how to create and manage liabilities and assets accounts in Tally ERP 9, it’s essential to know the fundamentals of each type of account and how they fit into the accounting system. Here’s a step-by-step guide along with practical methods and exercises to help you master this topic.

1. Understanding Liabilities and Assets in Tally ERP 9

Liabilities refer to what the business owes to others. They can include loans, creditors, and other payables. In Tally ERP 9, liabilities are represented under the "Liabilities" group.

Assets are what the business owns or has invested in. They can include cash, inventory, accounts receivable, and fixed assets like equipment or property. In Tally ERP 9, assets are represented under the "Assets" group.

2. Setting Up Liabilities and Assets Accounts in Tally ERP 9

Step-by-Step Setup:

Open Tally ERP 9: Go to "Gateway of Tally."

Create Account Groups:

Go to Accounts Info > Groups > Create.

To create a liabilities group, choose the Liabilities group under the Group List.

To create an assets group, choose the Assets group.

Create Ledger Accounts for Liabilities and Assets:

Go to Accounts Info > Ledgers > Create.

For liabilities, create ledgers like “Loan Account,” “Creditors,” etc., under the “Liabilities” group.

For assets, create ledgers like “Cash in Hand,” “Inventory,” “Fixed Assets,” etc., under the “Assets” group.

3. Practical Methods with Examples

Example 1: Creating a Liability Ledger - “Bank Loan”

Go to Accounts Info > Ledgers > Create.

Enter Ledger Name: Bank Loan

Select Under Group: Liabilities

Enter the Opening Balance (if any).

Save the ledger.

This process will create a liability account in Tally ERP 9 for tracking any bank loans.

Example 2: Creating an Asset Ledger - “Office Equipment”

Go to Accounts Info > Ledgers > Create.

Enter Ledger Name: Office Equipment

Select Under Group: Fixed Assets

Enter the Opening Balance (if any).

Save the ledger.

This process will create an asset account in Tally ERP 9 for tracking office equipment as a fixed asset.

4. Exercises with Solutions

Exercise 1: Creating Multiple Ledgers for Liabilities and Assets

Create the following ledgers in Tally ERP 9:

Creditors Ledger under Sundry Creditors

Cash Ledger under Cash-in-Hand

Accounts Receivable Ledger under Sundry Debtors

Solution:

Go to Accounts Info > Ledgers > Create.

For each ledger, enter the ledger name and select the appropriate group:

Creditors under Sundry Creditors

Cash under Cash-in-Hand

Accounts Receivable under Sundry Debtors

Exercise 2: Updating Opening Balances for Liabilities and Assets

Update the following opening balances for existing accounts:

Bank Loan - $10,000

Inventory - $15,000

Solution:

Go to Accounts Info > Ledgers > Alter and select the relevant ledger (e.g., Bank Loan or Inventory).

Update the Opening Balance field with the specified amounts.

5. Practical Methods for Recording Transactions

In Tally ERP 9, you can enter transactions that affect your liabilities and assets using Accounting Vouchers.

Example Transaction: Purchasing Equipment on Credit

Go to Accounting Vouchers > Purchase Voucher.

Enter details of the purchase, including the Amount, Supplier Name, and Purchase Account (e.g., Office Equipment).

Tally will record the entry, increasing both the assets (Office Equipment) and liabilities (Creditors).

Exercise: Journal Entry for Loan Repayment

Record a transaction where you repay $5,000 on a bank loan from the cash account.

Go to Accounting Vouchers > Payment Voucher.

Select Bank Loan as the account credited and Cash as the account debited.

Enter $5,000 as the amount.

By following these steps and exercises, you can effectively create, manage, and track your liabilities and assets in Tally ERP 9. Practice with different types of accounts to strengthen your skills in Tally ERP 9.