ADVANCED CORPORATE ACCOUNTING -LAB EXERCISES

LAB EXERCISE -1 Company Creation -Non-Trading Concern

Steps to Create a Company in Tally

1. Open Tally:
o Double-click the Tally icon on your desktop.
2. Access Company Information:
o Press Alt+F3 or navigate to Gateway of Tally -> Company Info ->
Create Company.
3. Enter Company Details:
o Company Name: This is the official name of your business.
o Mailing Name: This is the name that will appear on your invoices
and other documents.
o Address: Enter the complete address of your company.
o State: Select the state where your business is located.
o Country: Select the country.
o Pin code: Enter the pin code of your business location.
o Contact Details: Provide your company's phone number, email
address, and other relevant contact information.
o Financial Year: Specify the financial year for your company (e.g.,
April 1 to March 31).
o Currency: Select the base currency for your transactions.
o Security: Set a password for your company data (optional).
4. Additional Details (Optional):
o Tax Registration: If applicable, enter your GSTIN, VAT, or other
tax registration details.
o Accounting Features: Customize accounting features based on your
business needs (e.g., inventory management, payroll).
 5. Save the Company:
o Press Ctrl+A to save the company.
Configuring Non-Trading Features in Tally ERP 9
After creating the company, follow these steps to configure the
features for a non-trading concern:
1. Activate Accounting Features:
o Press F11 (Features) from the Gateway of Tally.
o Go to Accounting Features.
o Enable relevant features like:
▪ Cost Centers (if you want to track expenses related to
different departments or projects).
▪ Bill-wise details (if you need to track receivables like
donations and subscriptions).
2. Deactivate Inventory Features:
o Since non-trading concerns usually don't deal with stock, ensure
that inventory features are deactivated.
LAB EXERCISE -2 Ledger Creation-Non-Trading Concern

Steps to Create Ledgers

1. Open Tally ERP 9:

o Launch the Tally ERP 9 software and open the non-trading concern
company you have created.
2. Navigate to Ledger Creation:
o From the Gateway of Tally, go to Accounts Info.
o Select Ledgers and then choose Create to begin creating new
ledgers.
3. Create Income Ledgers: Non-trading concerns often receive income in
the form of subscriptions, donations, and grants. Create ledgers for these
income sources as follows:
o Ledger Name: Subscriptions Received
o Under: Income (Direct or Indirect Income based on your
requirement)
o Type of Ledger: Choose the type according to its nature (revenue
type).
o Ledger Name: Donations Received
o Under: Income (Direct or Indirect Income)
o Specify if it is a General Donation or a Specific Donation (for
specific purposes).
o Ledger Name: Entrance Fees
o Under: Income (Direct or Indirect Income)
o Use this for one-time membership fees if applicable.
4. Create Expense Ledgers: Non-trading concerns have various
expenditures, such as salaries, rent, and maintenance costs. Create ledgers
for these expenses as follows:
o Ledger Name: Salaries
o Under: Indirect Expenses
o Use this ledger to record payments made for staff salaries.
o Ledger Name: Rent Paid
o Under: Indirect Expenses
o Record any rent payments made by the organization.
o Ledger Name: Stationery
o Under: Indirect Expenses
 o Use this to record expenses for office or administrative supplies.
o Ledger Name: Maintenance Expenses
o Under: Indirect Expenses
o Record any expenses for property or equipment maintenance.
5. Create Capital Fund Ledger: The Capital Fund (also known as the
General Fund or Accumulated Fund) represents the organization's
accumulated capital.
o Ledger Name: Capital Fund
o Under: Capital Account
o Use this ledger to keep track of the organization's capital fund.
6. Create Specific Fund Ledgers: If the non-trading concern has received
donations for specific purposes (like building construction or educational
purposes), create a ledger for those specific funds.
o Ledger Name: Building Fund
o Under: Capital Account or Reserve & Surplus
o Use this for donations received specifically for building or
construction.
o Ledger Name: Education Fund
o Under: Capital Account or Reserve & Surplus
o Track funds allocated for educational activities.
7. Create Bank and Cash Ledgers: Record all cash and bank transactions
separately for clear visibility.
o Ledger Name: Cash in Hand
o Under: Cash-in-Hand
o This ledger tracks all cash transactions.
o Ledger Name: Bank Account (e.g., XYZ Bank)
o Under: Bank Accounts
o Record all transactions made through the organization's bank
account.
8. Save the Ledger:
o After entering all the necessary details, press Enter until you reach
the Accept? Yes or No prompt.
o Press Y or select Yes to save the ledger.

Common Ledgers for Non-Trading Concerns

1. Income Ledgers: Subscriptions, Donations, Grants, Interest Income.

 2. Expense Ledgers: Salaries, Rent, Electricity, Maintenance, Event
Expenses.
3. Capital Accounts: Capital Fund, Reserve Fund, Building Fund.
4. Bank and Cash Accounts: Cash in Hand, Bank Accounts (e.g., specific
bank names).

Ledger Format

LAB EXERCISE -3 Vouchers Creation-Non-Trading Concern

Steps to Create Vouchers

1. Open Tally ERP 9:

o Launch Tally ERP 9 and open the company that you have set up
for your non-trading concern.
2. Navigate to Voucher Entry Screen:
o From the Gateway of Tally, go to Accounting Vouchers.

Types of Vouchers and Their Creation Steps

1. Receipt Voucher (F6)

This voucher is used to record all receipts, such as donations, subscriptions,

grants, or other incomes.

• Press F6 to select the Receipt Voucher.

• Credit the ledger from which the money is being received (e.g.,
Subscriptions, Donations).
• Debit the ledger where the amount is deposited (e.g., Cash or Bank
Account).
• Enter the details of the transaction, such as the amount, narration, and
reference number.
• Press Enter to accept the voucher.

2. Payment Voucher (F5)

Payment vouchers are used to record all expenses and payments made by the
non-trading concern.

• Press F5 to select the Payment Voucher.

• Debit the expense ledger (e.g., Rent Paid, Salaries, Maintenance).
• Credit the ledger from which the money is being paid (e.g., Cash or Bank
Account).
• Fill in the details of the payment, including the amount, description, and
date.
• Press Enter to save the voucher.

3. Contra Voucher (F4)

Contra vouchers are used to record fund transfers between cash and bank
accounts.

• Press F4 to select the Contra Voucher.

• If you are depositing cash into a bank, Debit the Bank Account and
Credit the Cash in Hand ledger.
• For withdrawals, Debit the Cash in Hand and Credit the Bank Account.
• Enter the transaction details and press Enter to save.

4. Journal Voucher (F7)

Journal vouchers are used for adjustments, accruals, and non-cash transactions
in the accounts of a non-trading concern.

• Press F7 to select the Journal Voucher.

• Debit the expense or income ledger that needs adjustment (e.g.,
Outstanding Expenses, Accrued Income).
• Credit the corresponding ledger (e.g., Outstanding Expenses Payable,
Accrued Income Receivable).
• Add a narration to describe the adjustment entry.
• Press Enter to save the journal voucher.

5. Debit Note Voucher (Ctrl + F9)

Debit notes are used when you return items or when the organization incurs
expenses that need to be adjusted against a specific party.

• Press Ctrl + F9 to select the Debit Note Voucher.

• Debit the expense or asset ledger.
• Credit the party or supplier's ledger.
• Enter the amount, description, and date of the transaction.
• Save the voucher by pressing Enter.

6. Credit Note Voucher (Ctrl + F8)

Credit notes are used when the non-trading concern needs to provide credit or
adjust income against a party.

• Press Ctrl + F8 to select the Credit Note Voucher.

• Credit the income ledger.
• Debit the party's ledger.
• Fill in the transaction details, including amount and description.
• Save the credit note voucher by pressing Enter.
Format

LAB EXERCISE -4
Steps to Generate the Income and Expenditure Statement
1. Go to Display Profit & Loss Account:
o From the Gateway of Tally, go to Display > Statement of
Accounts > Profit & Loss Account.
o This will automatically show all the income and
expenditure entries for the non-trading concern.
2. Period Selection:
o Press Alt + F2 to select the period for which you want to
generate the report.
o Set the date range as per the financial year or the specific
period you want to analyse.
3. Review the Income and Expenditure Account:
 o The account will show all the Income items on the credit
side and Expenditure items on the debit side.
o It will provide the Net Surplus (if income exceeds
expenditure) or Net Deficit (if expenditure exceeds
income) at the end of the period.
Steps to Save or Print the Report
1. Save the Report:
o To save a copy of the Income and Expenditure Account,
you can export it by pressing Alt + E and choosing the file
format (Excel, PDF, etc.).
o Follow the prompts to choose the location and file type for
saving the report.
2. Print the Report:
o To print the Income and Expenditure Account, press Alt +
P.
o Select the printing options like the printer’s name, number
of copies, and layout format, then proceed with the print.
LAB EXERCISE -5
Steps to Generate the Balance Sheet
1. Open Tally ERP 9:
o Launch the Tally ERP 9 software and open the non-trading
concern company that you have set up.
2. Navigate to Display Menu:
o From the Gateway of Tally, go to Display.
o Select Final Accounts and then choose Balance Sheet.
Generating the Balance Sheet
1. Go to Balance Sheet Display:
o From the Gateway of Tally, select Display > Final
Accounts > Balance Sheet.
o This will display a summary of the organization's assets,
liabilities, and capital funds.
2. Period Selection:
o Press Alt + F2 to set the period for which you want to
generate the Balance Sheet.
o Enter the start and end dates of the financial year or the
specific period you are reviewing.
3. Review the Balance Sheet:
o The Balance Sheet will display all assets on the right side
and all liabilities and capital funds on the left side.
o Ensure that all values are correctly posted and that the
Balance Sheet is in balance (i.e., Total Assets = Total
Liabilities + Capital Funds).
Additional Steps for Non-Trading Concern Adjustments
 1. Accrued Income and Outstanding Expenses:
o Use journal entries to adjust for accrued incomes or
outstanding expenses that are not yet received or paid.
o These adjustments ensure that the Balance Sheet reflects
the accurate financial position of the non-trading concern.
2. Specific Fund Balances:
o For funds like Building Fund or Donation Fund, ensure
that they are displayed separately under the Capital
Account to track their usage properly.
Saving and Printing the Balance Sheet
1. Save the Balance Sheet:
o To save a copy of the Balance Sheet, you can export it by
pressing Alt + E and selecting the format (Excel, PDF,
etc.).
o Follow the prompts to choose the location and file type for
saving the Balance Sheet.
2. Print the Balance Sheet:
o Press Alt + P to print the Balance Sheet.
o Configure the print options like the printer name, layout
format, and the number of copies, and then print the report.