Accounting And Tally: Basics, Solved Examples

Accounting and Tally are two interconnected parts of business management. Accounting is a process of recording, summarising and interpreting financial transactions in a business. It helps to maintain the records of the financial transactions that took place within an organisation.

Tally is a software program used to maintain accounting and financial tasks on a software. It consists of various tools and features to make calculation and record keeping easy and effective. Let us learn about Accounting and tally in this article.

Table of Contents

What is Accounting?

Accounting is a process of keeping a track of all important financial transactions, such as sales, receipts, payments, purchases, deposits, etc and keeping their record, summarising them and making reports for organisations.

These maintained records help to calculate different financial information during month end and when exchanging information with other businesses.

What is Tally?

Tally is a financial accounting software package which is used to complete various financial, accounting tasks and manage day to day business data of an organisation. It consists of various features and tools to manage records, calculation, inventory management, GST calculations and report management.

Objectives of Accounting

The main objectives of accounting are mentioned below.

The major goal of accounting is to keep record of various transactions in accounting. It consists of some standards and formats in which recordings are kept. You can use TallyPrime to store transactions easily.
With the help of accounting business records can be recorded and analysed. After proper analysis reports are generated. It uncovers important insights from the data to find efficient processes and manage expenses.
Financial reports can easily be made with the help of accounting. Here, we put together all the important data to provide reports from the records using different tools.

Three Basic Principles of Accounting

Accounting is an important aspect of business which helps to track financial transactions and make informed decisions. Accounting principles are used as guidelines to accounting activities. The five major principles of accounting are mentioned below.

Accrual Principle: According to this principle, all revenues and expenses must be recognized when they are incurred and not be dependent on cash flow. First accounting transactions must be updated during the real team during the current financial period when they occured not when the cash flow occurs.
Conservative Principle: Accountants must be careful and prepared with a high degree of validation. It anticipates possible losses rather than gains. It states that when risks or uncertainties are present then we must follow a cautious path rather than an aggressive approach.
Consistency Principle: When a method or process is chosen it must be applied consistently without changing from various financial accounting periods. It allows users to make informed decisions over time.

Basics of Accounting and Tally

Let us learn some of the basics terminologies in accounting below.

Assets: These are the possessed resources which are owned by a particular company or individual. Some examples of assets are land, inventory, cash, buildings, supplies, etc.
Liabilities: These are debts or financial obligations a company has during their business operations. They are settled with time with transfer of money services or goods. Some examples of liabilities are deferred revenues, earned premiums, mortgages, etc.
Expenses: These are costs of different processes and operations which companies incur while generating revenue. Some of the expenses are wages of employees, suppliers payment, leases, etc.
Revenue: Revenue is money which a business earns from its products and services.
Equity: It is the amount of money which a company needs to return to its shareholders when all its assets are liquidated after the company pays off its debts.

Features and Uses of Tally

Tally is a financial accounting software used to record daily business transactions in a company. It saves time and also provides greater accuracy.

It is used by businesses to carry out their daily accounting activities. It is used by small and big enterprises due to its useful features and control.
It is also used in making the final balance sheet.
It can also generate different types of reports such as tax filing.
It also helps in inventory maintenance.
Less chances of error when compared to manual accounting.
With each entry the balance sheet gets automatically tailed up.

Accounting and Tally: How to install Tally Software?

Follow the steps given below to know the steps to install tally software system in your computer.

First, go to the official website of Tally and download it. If you are a student you can learn Tally for free.
Tally is mainly dependent on function keys and keyboard to perform various functions. These shortcut keys can be learned through the table below.
Now, create your company by giving it a name by creating a company option in the menu bar.
Enter the required informations and choose your currency and then mention the starting date of financial year and starting date.
You can choose accounts only option when you are managing only your account.
If you are managing your inventories then Accounts with inventory tally options are used.

Accounting and Tally: Basic Function Key used in Tally

Given below are some of the best shortcut Some of the key shortcut key functions available to use in Tally are mentioned below.

Accounting and Tally: Shortcut Keys
Key	Description
F1	Accesses context-sensitive help.
F2	Renames or alters masters, or changes the date.
F3	Accesses the Company menu to select different companies.
F4	Toggles between voucher types or selects a voucher type.
F5	Accesses various reporting options for generating reports.
F6	Accesses the List of Accounts or List of Groups.
F7	Creates or navigates to journal vouchers.
F8	Generates financial reports such as balance sheets.
F9	Allows for transaction entry or detailed entry screens.
F10	Configures GST details, company settings, or Payroll.
Ctrl + A	Accepts a form.
Ctrl + B	Inserts a voucher or masters.
Ctrl + E	Exits Tally.
Ctrl + N	Creates a new company.
Ctrl + Q	Aborts a form.
Ctrl + L	Select the ledger
Ctrl + I	To select the inventory items.
Ctrl + R	Retrieves the last line which is deleted using the Alt + R or Alt + D.
Ctrl + T	Selects the first item in a voucher, master, report, or list.
Ctrl + Enter	Selects the last item in a voucher, master, report, or list.
Ctrl + P	Prints the report or document.
Create Ledger	ALC
Alt + E	Export
Ctrl + Enter	Change Ladder
Alt +U	To retrieve the last line deleted
Alt + V	It brings stock journal screen
Alt + R	For tally register
Alt+ W	To view the tally browser
Alt + X	To cancel a voucher
Alt + D	To delete the voucher
PgUP	Display previous voucher during voucher alter
PgDn	Display next voucher
Shift + Enter	It collapse next level crucial details
Esc	Cancels a form or exits a screen.

Learn Tally with PW Skills

Learn Basics and advance tally with our Tally Courses and get golden opportunities in job roles like account executive, data entry operator, stock maintainer, account assistant and much more. Learn with the best faculty having a good understanding of tally and accounting. With this course I get a record lecture (Self Paced Learning), practice exercise, tally prime, GST calculation, accounts, banking payment systems, and much more. Get industry recognized certification after completing the course and much more. To know more about the course and get huge offers visit our website @pwskills.com

Accounting and Tally FAQs

What is Accounting?

Accounting is a process of keeping a track of all important financial transactions, such as sales, receipts, payments, purchases, deposits, etc and keeping their record.

What is basic Tally?

Tally is a financial accounting software package which is used to complete various financial, accounting tasks and manage day to day business data of an organisation.

What is the use of the F2 function key in Tally?

The F2 function key in Tally is used to change the menu period.

What is the use of the F1 function key in Tally?

F1 Key is used in Tally to select an account or inventory button.

Is Tally and accounting the same?

Tally is basically an accounting software used for transactions recording, maintaining accounts and performing various operations with the help of functions and tools.