What Are Journal Entries In Tally?

Journal Entries in tally: Every business engages in daily business-to-business (B2B) or Business-to-customer (B2C) transactions on a daily basis. Either it could be cash or credit-based payment. The organization needs to track its payments and expenditures to keep track of total expenses in the company. It is crucial to manage and record all this information in a safe and organized place.

Tally Prime is business solution software that helps businesses manage and track their expenditures, processes, and records of various activities inside the organization. The activity of recording business transactions in the books of business accounts is called journalising in accounting. Let us know what journal entries are in Tally under this article.

Table of Contents

What are Journal Entries In Tally?

Journal entries are made in tally and are used to keep accurate records of up-to-date financial transactions. The major key components of journal entries in Tally are date, debit and credit accounts, amount, and narration of the transaction.

In tally, journal entries are recorded in chronological order i,e when they take place. You can pass entries in the Journal voucher by pressing the F7 key from the accounting voucher screen on the Gateway of Tally.

Key Takeaways

A journal is a book of original entries of transactions from the bank of accounts in the order in which they occur.
Journal entries in the tally are used to keep accurate records of up-to-date financial transactions.
The major components of Journal entries are date, debit and credit accounts, amount, and narration of the transaction.
Journal vouchers in Tally are used to feed various entries, credit purchases or sales, fixed asset purchase entries, and more.

Why use Journal Entries in Tally?

There are many purposes for using Journal Entries in Tally. Some of the major uses of Journal vouchers are mentioned below.

Journal entries are used to record non-cash transactions from the bank of accounts. Some non-cash transactions are depreciation, profit, and losses on fixed assets, discount expenses, deferred income taxes, and more.
To fix any wrong entries in the bank of accounts. It may include incorrect debit or credit entries. With the help of journal vouchers, you can reverse the entries in Tally ERP 9.
Journal entries in the tally are also used to record transactions that are not covered by any other accounting vouchers like sales vouchers, payment vouchers, purchase vouchers, etc.

Journal entries in Tally Prime follow T-accounts to represent different accounts used by transactions.

Journal Entries in Tally

Party Dr.

To Income

Expense Dr.

Expense/ To party

Asset Dr.

To Party

Benefits of Journal Vouchers in Tally?

There are many use cases of Journal vouchers in Tally. Some of the major uses are mentioned below.

It maintains a record of outstanding expenses such as electricity bills, subscription fees, salaries, etc.
General entries in tally also keep track of pre-paid expenses that are paid in advance.
It also recognizes accrued income and maintains a separate record for it. Accrued income is income that is not received but is due.
It is also used to keep a record of the transactions that are already done before the work even starts. Suppose, a digital marketing agency takes an advanced payment of INR 10,000 but has yet to deliver the project.
It is also used to record transfer entries.
Also, journal entries can be used to locate and correct any wrong entries in the books of account.

Types of Journal Vouchers

Let us check some of the major journal vouchers available in the tally as per uses.

Prepaid Voucher: This voucher records all the prepaid amounts that were paid during a financial year.
Fixed Assets Voucher: This voucher records the payment of fixed assets during a financial year. If fixed deposit transactions occur by cash, they are termed “payment vouchers”.
Depreciation Vouchers: This voucher is used to record depreciating expenses for a financial year. This is a non-cash expense.
Transfer Voucher: This voucher is used while shifting expense balances from one account to another. Records of shifting materials are kept in this record after shifting and before shifting.
Rectification Voucher: It is used to record rectification entries in Tally. It is used to correct the wrong entries and fix them.
Adjustment Voucher: This voucher is used to record closing entries in a year. It records revenues in the period in which they occur and expenses in that specific period.
Provision voucher: This voucher is used to record expenses based on an estimation basis. An accrual voucher is a type of provision voucher.

How to Pass Journal Entry in Tally?

Journal entries in the tally are passed with journal vouchers. Check out the steps below to fill in the journal entries using Tally.

Go to the Accounting voucher from the Gateway of Tally ERP 9.
Now press the “F7” shortcut key to open the journal voucher entry.
You can also open the Journal voucher entry by clicking on the F7 journal button on the top right side of the screen.
Adjust the date by clicking on the F2 shortcut key.
Start filling out the By/Dr and entering the ledger details to be debited. Now, fill in the transaction details, enter the ledger, amount to be debited, transaction amount, etc.
Now, enter the debit aspect by selecting the To/CR and selecting the ledger to be credited with the amount.
You can enter the details of the transaction in the narration field before clicking the save button.
Recheck all the filled details and click on the “save” button.

Learn Tally with PW Skills

Learn basics of accounting, banking payment system, Tally Prime, and more with PW Skills Tally Advanced Course. Our advanced Tally Course offers advanced features and GST calculation with interactive classwork and hands-on learning. Become a certified tally operator with PW Skills.

Journal Entries In Tally FAQs

Q1. What are journal entry vouchers in Tally Prime?

Ans: Journal vouchers in Tally are used to feed various entries, credit purchases or sales, fixed asset purchase entries, and more.

Q2. What are the different types of Journal Vouchers in Tally?

Ans: Some major types of journal entries in Tally are Fixed assets, depreciation vouchers, rectification vouchers, prepaid vouchers, transfer vouchers, and more.

Q3. What is a journal entry?

Ans: Journal entry is a record-keeping of business transactions from books of account. In Tally Prime, Journal vouchers are used to process accounting entries, allocations, and corrections of entries in our financial systems.