TALLY ADVANCE
There are three volumes to be discussed in tally advance.
VOLUME 1: This mainly deals with service giving industry. Service organization is an organization which
deals with provision of services to customers.
VOLUME 11: This mainly deals with trading organization. Trading organization is an organization which
deals with buying and selling goods.
VOLUME 111: It deals with little trading but mainly explain Manufacturing industry and also discuss
issues regarding construction companies. Manufacturing industry is an industry which deals with
transforming raw materials into finished product.
F7 JOURNAL VOUCHER
It is also known as non-cash or no-bank voucher .this is due to the most of its transactions does not
involve cash or bank. It is used to record credit purchase of fixed assets
Dr fixed assets
Cr sundry debtor
Other uses of journal voucher
1.It is used to record end year adjustments such as pre-paid expenses, accrued
depreciation
i.
ii.
iii.
iv.
Pre-paid expenses (expenses paid but not yet incurred )
Dr expenses ac
Cr pre-paid expenses ac (under current asset)
Accrued expenses(expenses incurred but not yet paid)
Dr expenses ac
Cr expenses payable (under current liability)
Depreciation of fixed assets
Reducing balance method
Depreciation=cost price× % of depreciation (no. of days used/365)
Straight line method
Depreciation=(cost price/useful life)× (no. of days used/365)
Correction of errors
e.g paid rent by cash 10,000
dr rent 1,000 cr cash 1,000
to correct error dr rent 9,000 cr cash 9,000
2. used by service giving organization to issue invoice
Dr debtor ac
Cr direct income ac
expenses and
3. it is used by petty cashier to submit statement of expenditures
Dr all expenses
Cr petty cash
F8-SALES VOUCHER
It is used to record both cash sales and credit sales of goods and services.
For cash sale of services
DR Cash ac
CR direct revenue (under direct income)
For credit sale of services
DR sundry debtor
CR direct revenue
F9-PURCHASE VOUCHER
Used to record cash purchase and credit purchase of goods and services
Cash purchase of service
Dr direct expense ac
Cr cash/bank ac
Credit purchase of services
Dr direct expense ac
Cr sundry creditor ac
F8 -CREDIT NOTE (alt+F6)
It is used to record sales return by customers. It is also known as sales returns voucher. in case of sales
return
Dr Sales
Cr bank or cash or sundry debtor
Also it is used to encounter for interest due
Dr interest due ac
Cr sundry creditor ac
F9 - DEBIT NOTE(alt +F5)
It is used to record purchases return to suppliers. In case of purchase return
Dr bank, cash or sundry creditor
Cr purchases a/c
Also it is used to encounter for interest accrued
Dr Sundry debtor
Cr interest accrued
VOLUME 111 PURCHASE CYCLE, MANUFACTURING AND SALES CYCLE
PURCHASE CYCLE
How to prepare quotation
It’s a formal statement of promise by potential supplier to supply goods or services required by the
customers, the document will identify specific prices with specific period of time and warranties for all
products.
Purchase order ( alt +F9)
It is a buyer generated document that authorizes a purchase transaction, it shows name of items,
prices, terms of payment also some time identify method of shipment of goods.
Purchase invoice
It is a commercial document or bill presented to a buyer by the supplier for the service provided or
goods sold, it contains items names, prices, VAT, and indicate time frame for payment
Receipt Note (GRN) (alt+ F9)
it is a document recorded by store manager that accompanying shipment of goods , it contains items
names and quantity most of the time.
MANUFACTURING
Refers to the process of transforming raw materials into finished products.
Bill of Materials (BOM)
Are the raw materials required to produce only one unit of product?
SCRAP-Are the waste product remains after product manufacturing.
DIRECT COSTS –Are the costs direct involved with production
EFFECTIVE RATE OF PRIMARY ITEM –Costs incurred to manufacture one unit of product.
Steps to create manufacturing journal
1) Gateway of tally→ Create →voucher type
2) In the name field type manufacturing journal →under stock journal →press enter key to an
option written “use as manufacturing journal” activate to yes the press ctrl + A to accept
SALES CYCLE
Proforma invoice is a bill of sell sent to a buyer in advance of delivery of goods or services. A document
that declare the sellers commitment to provide goods or services to the buyer at a certain prices.
Sales order a seller generated document that authorizes sale of the specified items, issued after receipt
of purchase order.
Sales invoice –document raised by seller to the customer indicating items names, prices and VAT, It is a
financial tool that a company uses to communicate to clients about the sums that are due in exchange
for goods that have been sold.
Delivery note (alt + F8) - Is a document accompanying shipment of goods that list item description,
grade and quantity of goods delivered.
VAT
VAT is a consumption tax. The tax is paid by the consumer, at a rate of 18% of the value of the product
bought. However, retailers are collection agents for the tax
Exemption
Exempted goods and services are listed in the Second Schedule of the VAT Act, and include unprocessed
agricultural products, educational and health services. If a supply is exempt, this means that the supplier
of the product does not reclaim input VAT and does not levy output VAT. Exempting removes the final
stages VAT from the product, but does not remove all the VAT – there is still VAT on the inputs to
producing the exempt product. Suppliers who supply only exempt products are not required to register
for VAT.
Zero-rating
Zero-rated goods and services are listed in the First Schedule of the VAT Act, and include exports. If a
supply is zero-rated, this means that the supplier of the product reclaims all input VAT and does not levy
output VAT.
OUTPUT VAT-VAT on sales and INPUT VAT-VAT on purchases
VAP PAYABLE –when output vat is higher than input vat
VAT RECEIVABLE-when OUTPUT VAT is lower than input VAT