Tally 7.2. Final Material

INFOTECH
COMPUTER EDUCATION & TUTORIALS

Quality is our Business
BRANCH ADDRESS: Faculty: Muhammad Abbas Sir.
RN COLONY, RAKSHAPURAM, DRDL, Contact: 7842251347
NEAR ST. ANTHONY SCHOOL, HYDERABAD, T.S. Email: mapinfotechrncolony1@gmail.com
SUBJECT: BASIC ACCOUNTING
1. Manual Accounts
2. Tally 9
3. Focus
4. Wings
5. Vat problem and
6. Interview question
Name of the student: ________________________
Phone number: ________________
Timings: _____________
Date of joining:______________
INFOTECH COMPUTER EDUCATION & TUTORIALS Page 1

RN Colony, Rakshapuram, DRDL, Hyderabad.
Contact: 7842251347
INDEX
S no Name Page no
1 Introduction of Accounting 3
2 Manual accounting 11-22
3 Operating Accounts 23
4 TALLY INTRODUCTION 23
5 Simple Problems 1-3 26-27
6 Sales tax problem 4-5 27-28
7 Excise duty & sales tax 28
Problem:06
8 Depreciation Problem: 7-8 28-29
9 Purchase Return problem-9 29
10 Trail balance problem-10 29-30
11 Opening balance 11-12 30-31
12 Trade discount-13 31
13 Deposit & Withdrawn, Interest on 31
capital, Interest on drawings
Problem:14
14 Loan Taken & Loan Given 31
Problem:15
15 Project of sun Detergent 32
Problme-16
16 Project of Khans Garments 34
Problem: 17
17 Trade Discount Problem: 18 35
18 Shortage in stocks Problem:19 35-36
FOCUS INTRODUCTION 37-40
19 Simple Problem-1 40
20 Deposit & Withdrawn Problem- 40
2
21 Sales tax Problem-3 41
22 Excise duty& Sales tax Pro-4 41
23 Excise duty, Sales tax & 41
Handling Charges Pro-5
24 Opening balance Problem-6 42
25 Opening balance Problem-7 43
26 Multiple Currency-8 44
27 Shortage in stock Pro-9 44
28 Godown-10 45
29 Department Pro-11 46
30 Batch wise inventory tracking 47
Pro-12
31 Purchase order, Sales order, 48
Purchase Quotations, Sales

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Quotations Pro-13
32 Post dated receipt Pro-14 49
33 Payroll Problem: 15 51-63
WINGS INTRODUCTION 64
34 Sample problem: 1 66
35 Sample problem-2 66
36 Depreciation problem-3 67
37 Problem-4 67
38 Sales tax pro-5 68
39 Opening balance-6 68
40 Problem-7 69
41 Excise duty & sale tax pro-8 69
42 Opening balance-9 70
43 Purchase return-10 70
44 Vat (Value Added Tax) 71
45 Interview questions 72-75
Introduction of Accounting
MANUAL ACCOUNTING
INTRODUCTION:-Accounts are introduced by Lucca Pacioli Accounts are maintained to know the profit
or loss of the business. Accounts are maintained the financial position of the business. When cash
transaction take place them they will be no relationship between customer and seller and when credit
transaction take place them they will be relationship between customer and seller.
The modern system of Accounting owes its origin to Luca Pacioli who published to Principle of
Double Entry System in Tally in 18th century. In 1875 EDWARD WALIA in his book explained the
methods of accounting due to increase in Business activities during 19th century. The subject of
Accounting also assumed significance. The other branches of accounting such as cost accounting and
management accounting also came into existence.
DEFINITION:-
A Definition that is commonly quoted was given by American Institute of certified public accountants
(AICP) in 1941. According to this Accounting is art of recording, classifying, summarizing, in a
significance manner and in terms of money transaction and events which are in part, at least of a
financial charter and interpreting the results thereof.
ACCOUNTING TERMINOLOGY:-
1. CAPITAL:-The amount invested by the owner for running of his own business is said to be as Capital.
2. DRAWINGS:-The amount or Goods of the business withdrawn by the owner from the business for his
personal use, private use and domestic use is said to be as Drawings.

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3. DEBTOR:-The business has to receive the amount from the outsider or customer for a credit sale is
said to be as Debtors.
4. CREDITOR:-The business has to pay the amount to the outsider or seller for a credit purchase is said
to be as Creditors.
5. DEBIT: - The receiving aspect is known as Debit.
6. CREDIT:-The Giving aspect is known as Credit.
7. ASSETS:-Assets means property of the business. Assets are of two types Fixed Assets and Current
Assets.
a. Fixed Assets:- Fixed assets are those which take very Long span of time for their transaction.
There are two types of fixed assets such as Tangible and Intangible Assets.
Tangible Assets: - Tangible Assets are those which can be seen and touch they are meant for visible.
Example:-Plant & machinery, Furniture, computer, land & building etc.
Intangible Assets:-Intangible Assets are those which cannot be seen and touch they are meant for
Invisible. But only can be seen.
Example:-Patents, copy right, Goodwill etc.
B. Current Assets: - Current assets are those which take short span of time for their transaction.
Example:-Cash, debtors, stock items etc.
8. Liability:-The Liability means business has to pay the amount which has taken in a due date.
(Responsibility)
Example:-Loan taken, Bank Over Draft, creditor, debts etc.
We have two types of Liability Long term Liability and short term (current liability).
a) Long term Liability:-The Liability which has to pay beyond one year is called Long
term Liability.
b) Short term Liability (Current Liability):- The Liability which has to repay within a year is
called short term liability.
Example:-Bills Payable, Creditors, Outstanding Expenses, Bank Overdraft etc.
9. Goods:-Goods are the commodities, articles or thing which are produced or purchased for the
purpose of sale and resale is called Goods. The goods which are not being sold are known as stock.
10. Bad Debts:-Bad debts are those debts which are not recoverable in nature.

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11. Provision for doubtful debts:-It is the provision created against the debtors of current year (to be
collected in the next year) which are doubtful i.e., may be collected or may be not be collected. It is an
anticipated expenditure.
12. Depreciation:-Decrease in the value of fixed assets which are used in the business such depreciation
is to be considered as an expense and decrease in the value of assets.
13. Appreciation:-Increase in the value of assets is called Appreciation.
14. Interest on capital:-It is the interest payable by the business to its owner on his capital and is
expenditure to the business.
15. Interest on Drawings:-It is the interest payable by the owner to the business on his
Drawings/withdrawn for personal use and is an income the business.
16. Goodwill:-It is the fame or reputation or Good name associated with the name of the firm. It is an
Intangible asset. It is the force of attracting the customer. It helps to earn more profits than the normal
profits in future. (OR)
It is the amount brought by the new partner into the business at the time of admission for old partner is
known as Goodwill. Goodwill may be distributed whether in ratios or equality.
Classification of Accounts, types of accounts, golden rules of accounts, principles of accounts
There are two types of Accounts. They are Personal and Impersonal Accounts.
Impersonal Accounts again classified into two types Real and Nominal Accounts
So, over all it is said to be as three types of Accounts. They are 1. Personal Accounts
2. Real Accounts
3. Nominal Accounts.
1. PERSONAL ACCOUNTS:-It is related with all types of Persons such as Natural Persons, Artificial
Persons and Representative Person.
A. Natural Person:-example-Ahmed A/c, Siraj A/c, Ravi A/c etc.
B. Artificial Person:-example-Bank A/c, Institutions A/c etc.
C. Representative Person:-example-Outstanding salaries, Rent receivable etc.
RULE: Debit: The Receiver

Credit: The Giver.
2. Real Accounts:-It is related with all types of Assets such as fixed assets and current assets (or) floating
assets.
a) Fixed assets: - fixed assets are of two types. Such as tangible assets and Intangible assets.
Tangible Assets:-example-Furniture, Land & buildings etc.
Intangible Assets:-example-Goodwill, Patents etc.

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b) Current Assets:-example-Cash, Goods stock, Bills receivable, Debtors etc.
Debit: what comes in
RULE: -
Credit: what goes out
3. Nominal Accounts:-It is related with all types of Expenses, Losses, Incomes, and Gains.
a) Expenses:-example-Paid salaries, wages, Purchases etc.

b) Losses:-example-Depreciation, Bad debts, stock lost by fire, abnormal loss etc.
c) Incomes:-example-Sales, Commission received etc.
d) Gains:-example-Bad debts recovered, Increase in the value of assets etc.
RULE:- Debit All Expenses and Losses

Credit All Incomes and Gains
Objective of accounting
a. To maintain Accounting records: Now a days the volume of business transactions are so large, a
human memory cannot absorb each and every business transaction. Therefore, accounting is
done to keep systematic record of all financial transactions, assets, liabilities, expenses and
revenues.
b. To ascertain results of business operations: To measure the financial performance of the

business, the results of operations are ascertained by preparing profit and loss account at the
end of each year. Maintains of systematic record of all expenses and incomes enables the
preparation of profit and loss account.
c. To Ascertain the Financial status of the business: To evaluate the financial position of a
business balance sheet is prepared. This shows the financial strength or weakness of an
enterprise.
d. To generate and communicate information to users: Accounting communicates information to

internal and external users. The internal users include all the organizational participants at all
levels of management for planning and controlling the operations. The external user includes
creditors, bankers etc., are basically interested in the solvency and profitability of an enterprise.
Function of Accounting
a. Recording: It is concerned with recording all the financial transactions in orderly manner in the
proper books of accounts. Transactions are recorded in journal in chronological manner.
b. Classifying: It deals with classification of recorded transactions so as to group similar

transactions at one place. It is done in ledger, where similar transactions are recorded at one
place under individual account heads e.g., in sales account all sale of goods recorded, purchase
account, all purchases of goods are recorded.

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c. Summarizing: it involves presenting classified transaction in a manner useful to both its internal
and external users. It involves preparation of financial statements i.e., profit & loss account and
balance sheet etc.,
d. Analyzing: The recorded data in financial statement is analyzed to make useful interpretation.
The figures given in financial statements need to put in a simplified manner e.g. All items
relating to fixed assets are placed at one place while long term liabilities at one place.
e. Interpretation: it deals with explaining the meaning and significance of the data simplified. The
accountants should interpret the statement in a manner useful to the users. It aims at drawings
meaningful conclusions from the information. E.g. liquidity position, profitability position etc.,
f. Communicating: The accounting information is to be communicated in a proper form and
manner to the persons interested in the business. It involves preparation and distribution of
reports to the users to make decisions.
Branches of accounts
1. Financial Accounting: To prepare the Trial Balance and thereby to check the arithmetical
accuracy of the books and records, to prepare the Revenue statements of Profit or Loss
Accounts, to prepare the statement of Affairs or Balance Sheets, or, in other words, to prepare
the Final Accounts and also to make plans and programmes for smooth running of this part of
Accounting procedures and to act accordingly are, in short, the functions of the Accountant. This
of his work is generally termed as accounting.
2. Cost Accounting: In any manufacturing concern, it is necessary to keep the records of daily
stocks in hand, their issues and receipts, payment of wages, calculated regarding overhead
charges, fixing the sale-price of the products, to prepare the budget and thereby to help in cost
control etc.
These functions are the functions of the Cost Accountant.
3. Management Accounting: The present-day Management is very much dependent on the
Accountant in all the levels of managerial activities. By furnishing regular reports regarding
various necessary information required daily by the management, the Accountant very ably
helps in their work. Cost Control, Quality Control, Budgetary Control, Planning etc.are therefore,
the functions of the Management Accountant.
Accounting Concepts
Accounting Concept defines the assumptions on the basis of which Financial Statements of a
business entity are prepared. Certain concepts are received assumed and accepted in accounting to
provide a unifying structure and internal logic to accounting process. The word concept means idea or
nation, which has universal application. Financial transactions are interpreted in the light of the
concepts, which govern accounting methods. Concepts are those basis assumption and conditions,
which form the basis upon which the accountancy has been laid. Unlike physical science, Accounting
concepts are only results of broad consensus. These accounting concepts lay the foundation on the basis
of which the accounting principles are formulated.

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Now we shall study in detail the various concepts on which accounting is based. The following are
the widely accepted accounting concepts.
1.) Entity Concept:- Entity Concept says that business enterprises is a separate identity apart from its
owner. Business transactions are recorded in the business books of accounts and owners transactions in
this personal back of accounts. The concept of accounting entity for every business or what is to be
excluded from the business books. Therefore, whenever business received cash from the proprietor,
cash a/c is debited as business received cash and capital/c is credited. So the concept of separate entity
is applicable to all forms of business organization.
2.) Money Measurement Concept:- As per this concept, only those transactions, which can be
measured in terms of money are recorded. Since money in the medium of exchange and the standard of
economic value, this concept requires that these transactions alone that are capable of being measured
in terms of money be only to be recorded in the books of accounts. For example, health condition of the
chairman of the company, working conditions of the workers, sale policy ECT. Do not find place in
accounting because it is not measured in terms of money.
3.) Cost Concept:- By this concept, the value of assets is to be determined on the basic of historical
cost. Transactions are entered in the books of accounts at the amount actually involved. For example a
machine purchased for Rs. 80000 and may consider it worth Rs. 100000, But the entry in the books of
account will be made with Rs. 80000 or the amount actually paid. The cost concept does not mean that
the assets will always be shown at cost. The assets may be recorded at the time of purchase but it may
be reduced its value be charging depreciation.
Many assets de not have acquisition cost. Human assets of an enterprise are an example. The cost
concept fails to recognize such assets although it is a very important asset of any organization.
4.) Going Concern Concept:- According to this concept the financial statements are normally
prepared on the assumption that an enterprises is a going concern and will continue in operation for the
foreseeable future. Transaction are therefore recorded in such a manner that the benefits likely to
accrue in future from money spent. It is because of this concept that fixed assets are recorded at their
original cost and depreciation in a systematic manner without reference to their current realizable
value.
5.) Dual aspect Concept:- This concept is the care of double entry book-keeping. Every transaction or
event has two aspects. If any event occurs, it is bound to have two effects. For Rs.50000, on the other
hand stock will increase by Rs.50000 and other liability will increase by Rs.50000. similarly is X starts a
business with a capital of Rs. 50000, while on the other hand the business has to pay Rs. 50000 to the
proprietor which is taken as proprietors Capital.
6.) Realization Concept: - It closely follows the cost concept any change in value of assets is to be
recorded only when the business realize it. i.e. either cash has been received or a legal obligation to pay
has been assumed by the customer. No Sale can be said to have taken place and no profit can be said to
have arisen. It prevents business firm from inflating their profit by recording sale and income that are
likely to accrue, i.e. expected income or gain are not recorded.
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7.) Accrual Concept:- Under accrual concept the effect of transaction and other events are
recognized on mercantile basic. When they accrue and not as cash or a cash equivalent is received or
paid and they are recorded in the accounting record and reported in the financial statements of the
periods to which they relate financial statement prepared on the accrual basic inform users not only of
past events involving the payment and receipt of cash but also of obligation to pay cash in the future
and of resources that represent cash to be received in the future. For Example:- Mr. Raj buy clothing of
Rs. 50000,a paying cash Rs. 20000 and sells at Rs. 60000 of which customer paid only Rs. 40000. So his
revenue is Rs. 60000, not Rs. 40000 cash received. Exp. or Cash is Rs. 50000, not Rs. 20000 cash paid. So
the accrual concept based profit is Rs. 10000 (Revenue- Exp.)
8.) Accounting Period Concept:- This is also called the concept of definite periodicity concept as per
going concept on indefinite life of the entity is assumed for a business entity it causes inconvenience to
measure performance achieved by the entity in the ordinary causes of business. Therefore, a small but
workable fraction of time is chosen out of infinite life cycle of the business entity for measure the
performance and loading at the financial position 12 months period is normally adopted for this purpose
accounting to this concept accounts should be prepared after every period & not t the end of the life of
the entity. Usually this period is one calendar year. In India we follow from 1st April of a year to
31st March of the immediately following years. Now a day because of the need of management, final
accounts are prepared at shorter intervals of quarter year or in some cases a month such accounts are
know a interim account.
9.) Matching Concept:- In this concept, all exp. Matched with the revenue of that period should only
be taken into consideration. In the financial statements of the organization if any revenue is recognized
that exp. Related to earn that revenue should also be recognized. This concept as it considers the
occurrence of exp. And income and do not concentrate on actual inflow or outflow of cash. This leads to
adjustment of certain items like prepaid and outstanding expenses, unearned or accrued income.
It is not necessary that every exp. Identity every income. Some exp. Are directly related to the
revenue and some are directly related to sale but rent, salaries etc. are recorded on accrual basis for a
particular accounting period. In other words periodicity concept has also been followed while applying
matching concept.
10.) Objective Concept:- As per this concept, all accounting must be based on objective evidence. In
other words, the transactions recorded should be supported by verifiable documents. Only than
auditors can verify information record as true or otherwise, the evidence should not be biased. It is for
this reasons that assets are recorded at historical cost and shown thereafter at historical lass
depreciation. If the assets are shown on replacement cost basis, the objectivity is lost and it become
difficult for auditors to verify such value, however, in resent year replacement cost are used for specific
purpose as only they represent relevant costs. For example, to find out intrinsic value of share, we need
replacement cost of assets and not the historical cost of the assets.
Accounting Conventions
The term Accounting Conventions refers to the customs or traditions which are used as a guide
in the preparation of accounting reports and statements. The conventions are derived by usage and

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practice. The accountancy bodies of the world may charge any of the convention to improve the quality
of accounting information accounting conventions need not have universal application. Following are
important accounting conventions in use:
1.) Convention of consistency:- According to this convention the accounting practices should remain
unchanged from one period to another. It requires that working rules once chosen should not be
changed arbitrarily and without notice of the effect of change to those who use the accounts. For
example, stock should be valued in the same manner every year. Similarly depreciation is charged on
fixed assets on the same method year after year. If this assumption is not followed, the fact should be
disclosed together with reasons.
The principle of consistency plays its role particularly when alternative accounting methods is
equally acceptable. Any change from one method to another method would result in inconsistency; they
may seem to be inconsistent apparently. In case of valuation of stocks if the company applies the
principle at cost or market price whichever is less and if this principle accordingly result in the
valuation of stock in one year at cost and the market price in the other year, there is no inconsistency
here. It is only an application of the principle.
An Enterprise should change its accounting policy in any of the following circumstances only.
(i) To bring the books of accounts in accordance with the issued accounting standard.
(ii) To compliance with the provision of law.
(iii) When under changed circumstances it is felt that new method will reflect more true and fair picture
in the financial statement.
2.) Convention of Conservatism:- This is the policy of playing sale game. It takes into consideration
all prospective losses but leaves all prospective profits financial statements are usually drawn up on a
conservative basis anticipated profit are ignored but anticipated losses are taken into account while
drawing the statements following are the examples of the application of the convention of
conservatism.
(i) Making the provision for doubtful debts and discount on debtors.
(ii) Valuation of the stock at cost price or market price whichever is less.
(iii) Charging of small capital items, like crockery to revenue.
(iv) Showing joint life policy at surrender value as against the actual amount paid.
(v) Not providing for discount on creditors.
3.) Convention of Disclosure:- Apart from statutory requirement, good accounting practice also
demands that significant information should be disclosed in financial statements. Such disclosures can
also be made through footnotes. The purpose of this convention is to communicate all material and
relevant facts concerning financial position and results of operations to the users. The contents of

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balance sheet and profit and loss account are prescribed by law. These are designed to make disclosures
of all materials facts compulsory. The practice of appending notes relative to various facts and items
which do not find place in accounting statements is in pursuance to the convention of full disclosure of
material facts. For example;
(a) Contingent liability appearing as a note.
(b) Market value of investments appearing as a note.
The convention of disclosure also applies to events occurring after the balance sheet date and the
date on which the financial statement are authorized for issue. Such events include bad debts,
destruction of plant and equipment due to natural calamities, major acquisition of another enterprises,
etc. such events are likely to have a substantial influence on the earnings and financial position of the
enterprises. Their not-disclosure would affect the ability of the users for evaluations and decisions.
4.) Convention of Materiality:- According to this conventions, the accountant should attach
importance to material detail and ignore insignificant details in the financial statement. In materiality
principle, all the items having significant economics effect on the business of the enterprises should be
disclosed in the financial statement.
The term materiality is the subjective term. It is on the judgment, common sense and discretion
of the accountant that which item is material and which is not. For example stationery purchased by the
organization though not used fully in the concept. Similarly depreciation small items like books,
calculator is taken as 100% in the year if purchase through used by company for more than one year.
This is because the amount of books or calculator is very small to be shown in the balance sheet. It is the
assets of the company.
ACCOUNTING CYCLE OF MANUAL ACCOUNTS
An Accounting cycle is a complete sequence beginning with the recording of transaction and ending
with preparation of financial statement i.e. Profit or loss A/c and Balance Sheet.
STEPS INVOLVED IN MANUAL CYCLE
1. JOURNALIZING:-Involves identify debit & credit objects in each transaction and recording it in
the journal.
2. LEDGER POSTING:-Transfer of transaction from journal to their respective accounts opened in
ledger.
3. BALANCING:-Ascertainment of the difference between the total of debit and credit column of a
ledger account.
4. TRIAL BALANCE:-This is a summary of ledger accounts. It involves preparation of list showing the
balances of each and every account to verify whether the sum of debit is equal to the sum of the
credit balance to ensure arithmetical accuracy.
5. TRADING AND PROFIT & LOSS ACCOUNT:-It is prepaid to ascertain the profit and loss for the
financial year. It reflects operation results.

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6. BALANCE SHEET:-Preparation of balance sheet to ascertain the financial position of the business
at the end of the financial year.
JOURNAL:
The first book of accounts is known as JOURNAL. All the business transaction is to be recorded in the
Journal in the form of Debit and Credit.
FORMAT OF JOURNAL:
DATE PARTICULARS L.F DEBIT CREDIT

AMOUNT AMOUNT
Example: From the following transaction Mr. Khan find out the nature of accounts prepare Journal
entries.
2014
January
1. Mr. Khan started business with cash Rs.3 00 000.
2. Purchase 10 colors TV @10,000 each for cash.
3. Paid carriage on purchases Rs. 2,00
4. Purchase 10 colors TV @10,000 each from Altaf Company.
5. Sold 10 colors TV @12,000 each for cash.
6. Sold 10 colors TV @12,000 each to sameera electronics.
7. Paid salaries Rs. 2,000.
8. Paid rent Rs. 1,000.
Explanation of the entries:
Date Account Nature of Explanation Debit/

involve account credit
2014 Cash a/c Real a/c Cash is coming Debit

Jan 1 Khan a/c personal a/c Khan is the giver credit
Jan 2 Purchases a/c Nominal a/c Purchases is an Expenses Debit

cash a/c real a/c cash is going out credit
Jan 3 Carriage a/c Nominal a/c Carriage is an Expenses Debit

cash a/c real a/c cash is going out credit
Jan 4 Purchases a/c Nominal a/c Purchases is an Expenses Debit

Altaf co a/c Personal a/c Altaf co is giver credit
Jan 5 Cash a/c Real a/c Cash is coming Debit

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sales a/c Nominal a/c sales is income credit
Jan 6 Sameera a/c Personal a/c Sameera is receiver Debit

sales a/c Nominal a/c sales is income credit
Jan 7 Salaries a/c Nominal a/c Salaries is an Expenses Debit

cash a/c Real a/c cash is going out credit
Jan 8 Rent a/c Nominal a/c Rent is an Expenses Debit

cash a/c Real a/c cash is going out credit
Journal Entries:-
Date Particulars L.f Debit Credit
amount amount
014. Cash a/c-------------------------------- --------- Dr 3,00,000

Jan 1 To Mr. Khans capital a/c 3,00,000
(being Mr. Khans started business with cash)
Purchases a/c ---------------------------------------- Dr 1,00,000

Jan 2 To cash a/c 1,00,000
(being purchase goods for cash)
Carriage a/c ----------------------------------------- Dr 2,00

Jan 3 To cash a/c 2,00
(being carriage on purchases)
Purchases a/c -------------------------------------- Dr 1,00,000

Jan 4 To Altaf co a/c 1,00,000
(being purchases goods from Altaf co on credit)
Cash a/c ---------------------------------------------- Dr 1,20,000

Jan 5 To sales a/c 1,20,000
(being sold goods for cash)
Sameera a/c ------------------------------------------ Dr
Jan 6 To sales a/c 1,20,000
(being sold goods to sameera electronics on 1,20,000
credit)
Salaries a/c --------------------------------------------- Dr
Jan 7 2000
To cash a/c
(being paid salaries ) 2000
Rent a/c ------------------------------------------ Dr 1000

Jan8 To cash a/c 1000
(Being rent paid)

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Ledger:-The second book of accounts is known as ledger. It is also known as final entry. In this book we
record separate individual account of the business transaction.
Dr 1.cash a/c Cr
Date Particulars J.f Amount Date Particulars J.f Amount
1 To Mr. Khan a/c 3,00,000 2 By purchases a/c 1,00,000
5 To sales a/c 1,20,000 3 By carriage a/c 200
7 By salaries a/c 2,000
8 By rent a/c 1,000
31 By balance c/d 3,16,800
4,20,000 4,20,000
Feb To balance b/d 3,16,800

1
Dr 2 Mr. Khans capital a/c Cr
31 To balance c/d 3,00,000 1 By cash a/c 3,00,000
3,00,000 3,00,000
Feb By balance b/d 3,00,000

1
Dr 3 purchases a/c Cr
Date Particulars J.f Amount Date Particulars J.f amount
2 To cash a/c 1,00,000 31 By bal c/d 2,00,000
4 To Altaf co a/c 1,00,000
2,00,000 2,00,000
Feb To balance b/d 2,00,000

1

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Dr 4 Carriage a/c Cr
3 To cash a/c 2,00 31 By balance c/d 2,00
2,00 2,00
1 Balance b/d 2,00
Dr. 5 Sales a/c Cr
Jan To balance c/d 2,40,000 5 By cash a/c 1,20,000

31
6 By Sameera a/c 1,20,000
4,20,000 4,20,000
Feb 1 By balance b/d 2,40,000
Dr. 6 Altaf co a/c Cr
jan To balance c/d 1,00,000 1 By cash a/c 1,00,000

31
1,00,000 1,00,000
Feb 1 By balance b/d
1,00,000
Dr 7 Sameera electronics a/c Cr
6 To sales a/c 1,20,000 31 By balance c/d 1,20,000
1,20,000 1,20,000
Feb To balance b/d
1 1,20,000

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Dr 8 salaries a/c Cr
2,000 2,000
Feb1 To balance b/d
2,000
Dr 9 Rent a/c Cr
1,000 1,000
Feb To balance b/d 1,000

1
Trial Balance
According to J.R Batliboi A Trial balance is a statement of debit and credit balances extracted from the
various accounts in the ledger.
ExpensesDebit IncomesCredit
Looses Debit GainsCredit
AssetsDebit LiabilitiesCredit
Sundry Debtors Debit Sundry creditors Credit
Sales Return Debit Purchase Return Credit
Drawings Debit Capital Credit

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S.No Particulars J/f Debit Credit
amount amount
1 Cash a/c 3,16,800
2 Mr. Khans capital a/c 3,00,000
3 Carriage a/c 2,00
4 Purchases a/c 2,00,000
5 Sales a/c 2,40,000
6 Altaf co a/c 1,00,000
7 Sameera electronics a/c 1,20,000
8 Salaries a/c 2,000
9 Rent a/c 1,000
6,40,000 6,40,000
Final account
Final accounts are prepaid at the end of the year to find out the profit or loss of the business during the
year In terms of profit and loss and financial position of the business at the yearend in terms of assets
and liabilities.
To find out the profit or loss, trading and profit a/c is prepaid, where as to find assets and
liabilities balance sheet is prepaid.
In preparing the final accounts the accounting principle of showing all the revenue expenditure
and capital receipts in the trading and profit or loss a/c, where as capital expenditure and capital
receipts in the balance sheet is followed.
A final account is based on 3 accounts.

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Trading account and profit and loss A/c format

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Balance sheet formatfinancial statement
Or

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Net Profit: It means excess of Revenue over Expenditure
Net Loss: It means excess of Expenses and Loss over revenue
Dr. Trading Account (factory account) Cr.
Particulars Amount Particulars Amount
To Purchases a/c 2,00,000 By Sales a/c 2,40,000
To Carriage a/c 200
To Gross Profit 39,800
2,40,000 2,40,000
Dr. Profit or Loss Account (Office account) Cr.
Particulars Amount Particulars Amount
To Salaries a/c 2,000 By Gross Profit b/d 39,800
To Rent a/c 1,000
To Net Profit 36,800
39,800 39,800
Balance sheet
Liabilities Amount Assets Amount
Mr. Khans capital 3,00,000 Cash 3,16,800
Altaf company 1,00,000 Sameera Electronics 1,20,000
Net Profit 36,800
4,36,800 4,36,800
Adjustment Entries:-
While preparing the profit or loss account for a particular period it is essential that expenses, losses,
incomes and gains relating only to that period are considered. For example, if accounts are prepaid for
the year 1980, then no income, gains, expenses, or Loss relating to 2004 to 2005 should be included in
profit and loss account for the year 2006.
The main of all the entries is it will effect on two side.

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1. Closing stock:
The unsold stock of goods remaining at the end if the accounting period is termed as closing stock 1
effect is it will appear in trading a/c on the credit side and 2 effect on the assets side of the balance
sheet.
Closing stock a/c-----------Dr

To Trading a/c
2. Outstanding expenses:
Expenses which have become due but not paid at the end of financial year are called Outstanding
expenses the 1 effect it will be added to the concerned expenses account and 2 effect outstanding
expenses will be shown on liabilities side of the balance sheet.
Expenses a/c-----------------Dr
To Outstanding expenses a/c
3. Unexpired or prepaid expenses:
Expenses which have been paid in advance i.e., whose benefit will be available in future are called
unexpired or prepaid expenses. The 1 effect it will be deducted from the concerned expense account in
profit or loss a/c and 2nd effect shown on the assets side of the balance sheet as prepaid expenses.
Prepaid insurance a/c -----------------------Dr

To expenses a/c
4. Outstanding or accrued income:
That income which is carried but not received during the accounting year is called accrued income. The
1st effect it will be added to the concerned income account in the profit or loss account on credit side
and 2nd effect shown in the balance sheet on the assets side as accrued income .
Accrued income a/c----------------------Dr

To income a/c
5. Income received in advance:
Income received but not earned during the accounting period is called income received in advance. 1st
effect it is deducted in profit or loss a/c and 2nd effect shown in balance sheet on the liabilities side as
income received in advance.
Income a/c ----------------------Dr

To income received in advance a/c
6. Depreciation: Depreciation is the reduction in the value of an asset due to wear and tear lapse
of time etc. 1st effect depreciation is shown on the debit side of profit or loss a/c and 2nd effect it
is shown as a deduction from the concerned asset account in balance sheet.
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Depreciation a/c --------------------------Dr
To assets a/c
7. Interest on capital:
Sometimes interest is provided on the capital invested by the proprietor in the business. It is treated as
expenses.
1st it is shown on the debit side of profit & loss a/c and 2nd effect the amount of interest on capital is
added to the capital on the liabilities side.
Interest on capital a/c -------------------Dr

To capital a/c
8. Interests on Drawings:
It is the interest payable by the owner to the business on his Drawings/withdrawn for personal use
and is an income the business. It is but natural that interest on Drawings should be charged to the
proprietor. Interest on Drawings is an income of the business. 1st effect it will be shown as income
on the credit side of the profit or loss a/c 2nd effect the amount of interest in Drawings is added to
the Drawings. This is ultimately deducted from capital.
Capital a/c -------------------------Dr

To interest on Drawings a/c
9. Bad Debts:
Debts which are irrecoverable are called Bad Debts. 1st effect it is shown on the debit side of profit or
loss a/c and 2nd effect shown on the asset side of the balance sheet by way of deduction from sunDry
debtors.
Bad debts a/c -----------------------------Dr

To Debtors a/c
10. Provisions for Bad Doubtful Debts:
The object of making provision for bad debts is to bring down balance of debtors to its true position. It is
based on the principle that all anticipated losses should be provided before arriving at correct profit. The
amount of doubtful debts is calculated either by studying the position of each debtor individually and
adding up the amount due from financially weak debtors or by calculating it at some percentage on
sunDry debtors which is fixed on the basis of past experience. It is to be noted that no provision for bad
debts is created on debtors which are definitely bad. Provision for bad debts is created by passing the
following Adjusting entry:
Profit or loss a/c ---------------------Dr

To Provision for Doubtful debts a/c

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What is accounting?
Financial records of an organization that register all financial transactions, and must be kept at
its principal office or place of business. The purpose of these records is to enable anyone
to appraise the organization's current financial position with reasonable accuracy. Firms present
their annual accounts in two main parts: the balance sheet, and the income statement (profit and loss
account).
It is a language of business. It is a Part of business communication in which all the transaction
should be recording like summarizing (checking) Analyzing (sequence) and Reporting of the business to
know the proper status of the company
Operating Accounts
Computerized Accounts Manual Accounts
Creation of company Journal entries
Creation of Ledgers Ledgers
Creation of stock items Balancing
Passing of Journal Entries Trial Balance
Trading Accounts (Factory A/c)
Profit & Loss A/c (Office A/c)
Balance Sheet
Tally introduction
Tally is an accounting software that is designed to integrate and automate all your business transaction
very business has various processes, which can range from simple to complex as your business grows
acquires new customers, and enter new markets, you need to maintain highly accurate and up-to-date
accounting and inventory records an accounting software such as tally help to simplify integrate and
streamline all your business transaction in an easy and cost effective manner
Tally is introduced by Sham Sunder goenka and Anand goenka in the year 1986 at Bangalore. The old
name of tally is PEUTRONIC PVT. Ltd
Tally is a financial Accounting software package is very popular other than software likes Focus, Wings
etc. It is used for the data store into daily business transaction like purchase, sales, deposit, withdrawal
bank and money transaction.
Tally versions
3.0/4.0/4.5 is use to operation by dos based only character user inter face and maintain business
5.4are use to operating by window base only graphical and maintain business
6.3 version is use to open the database connectivity
7.2 versions is used to taxations (CST, VAT and others)
8.1 versions is used to 12 languages
9.0 versions is used to payroll and all taxes (TCS, TDS, Service tax)

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ERP9version is used to REMOTE USER
Tally has 4 Groups
Assets Balance sheet

Liabilities
Income Profit & Loss A/c
Expenses
28 subgroups are used in ledgers

After creating the company
The second step is creation of ledger

Usually in manual account first we create all the Journal entries (transaction) after Journal entries we
create ledgers then we will filter the amounts of Journal entries into ledgers
But in computerized Account first we create ledger then transactions
For example
Capital Account, Purchase Account, Sales Account, Sundry Creditor, Sundry Debtor, Salaries Etc
Here we will not manually filter the transaction it automatically filter the journal entries. It will split the
data into individual ledgers
Ledger:-
Format of Ledgers
Name Under
Owner of the business
Mr. Khans capital A/c Capital A/c
Drawings
Personal use, Private use, Domestic use.
Purchases A/c Purchases A/c
Purchases Return A/c
Sales A/c Sales A/c
Sales Return A/c
Purchases From Party or Person on credit Sundry Creditors
Sales To Party or Person on credit Sundry Debtors
Prepaid, Future Income Current Assets
Loan Given To Mr. Dawood
Outstanding, Future Expenses Current Liability
Loan Taken From Mr. Moiz
Purchased for business use, office use and those Fixed Assets
assets which not have quantity(furniture)
Monthly Incomes Indirect Incomes
Yearly Incomes
Relate to Office(P&L)
Monthly Expenses Indirect Expenses
Yearly Expenses
Relate to Office(P&L)
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Daily Expenses Direct Expenses
Weekly Expenses
Relate to Factory(Trading)
Daily Incomes Direct Incomes
Weekly Incomes
Relate to Factory(Trading)
Bank A/c Bank A/c
Miscellaneous Misc. Expenses(Assets)
Bank O/d Draft Bank O/D
Reserve Reserve & Surplus
Opening stock Stock in Hand
All Taxes Duties & Taxes
Closing stock only Current Assets
Cash Cash in Hand (it is created by default)
Tally depends on group and short cut keys
F1 To select a company
F2 Date change
Alt+F2 for Period Change
Alt+ F3 To create a company
F4 Contra (deposit and with Draw for office use)
F5 Payment (Paying to Party or Expenses)
F6 Receiving from Party or Incomes)
F7 Journal (Adjustment entries, Non cash Non Bank transaction)
F8 Sales (Credit sale or cash sales)
F9 Purchase (Credit purchase or cash purchase)
Practical Steps
Open tally 7.2-->press Esc
Creation of company
Alt+F3 Create Company Give the company Name of the companygive the details of the
companyCtrl+a to save one time Esc
Creation of ledger
Accounts InfoLedgerMultiple Ledger (Create)
Under Group: All items
Refer to the concern problem ledgerafter giving the details of the ledgerCtrl+a to save two time
esc.
Creation of items
1. Inventory infostock groupcreate
Name: Electronics Goods
Under: PrimaryYes
Ctrl+a To savethree time Esc
2. Units of MeasuresCreate
Type: Simple

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Symbol: nos
Formal Name: NumbersCtrl+a to savethree time Esc
3. Stock Itemscreate
Name: Colour TVs (give the Item name which have given in the Question)
Under: Electronics Goods
Units: Nos
Ctrl+a To save four time Esc
Passing of journal entries:

Go to Accounting vouchers
F4Contra (deposit or withdrawn for office use)
F5Payment (paying to someone)
F6Receipt (Receiving from someone)
F7Journal (all adjustments entries)
F8Sales
F9Purchases
Refer to the concern problem Journal Entriestwo times Esc
Go to Balance sheetone time Esc
Go to Profit & Loss A/c
Simple Problems:-1
1. Mr. Khan started business with cash Rs.3 00 000.
2. Purchase 10 colors TV @10,000 each for cash.
4. Purchase 10 colors TV @10,000 each from Altaf Company.
5. Sold 10 colors TV @12,000 each for cash.
6. Sold 10 colors TV @12,000 each from Sameera electronics.
7. Paid salaries Rs. 2,000.
8. Paid rent Rs. 1,000.
Balance Sheet: 436800 Net Profit: 36800 Closing stock: Nil

Simple Problems:2
1. Mr. Parvez started business with cash for Rs.400000

2. Purchase furniture Rs.4000 for office use
3. Purchase computer Rs22000 for office use
4. Purchase 10 Bpl @16000 each from Durga Rani on credit
5. Purchase 5 Lg @11000 each from sunith rani on credit

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6. Purchase 5samsung @12000 each from Annuradha on credit
7. Sold 6 Bpl@17200 each fror cash
8. Sold 4Lg @12500 each to Mr Mehta in credit
9. Sold 5 samsung@13500 each for cash
10. Paid salaries 1500
11. Paid rent 1200
Balance Sheet: 693000

Net Profit: 18000
Closing stock: 75000
Simple Problem:3
1. Mr. Mujeeb quadri started business with cash for 10000
2. Bought 40 T-shirts @100 each for cash
3. Sold 10 T-shirts @120 each to Hashim
4. Sold 30 T-shirts @120 each for cash
5. Purchase furniture 2500
6. Received commission 300
7. Paid office rent 100

Net Profit: 800
Closing stock: Nil
Sales Tax Problem:4

1. Mr. Sahil started business with cash 500000
2. Purchase Furniture 20000
3. Purchase computer 20000
4. Purchase 10 Printer @5000 each from Tvs company
5. Purchase 10 Computer @20000 each for cash
6. Sold 10 Printer @6000 each for cash and sales tax10%
7. Sold 10 computer @25000 each to Mr. Chandrakanth and sales tax 10%
8. Paid cash to Tvs company 50000
9. Received cash from Mr. Chandrakanth 275000
11. Paid rent 1500
Net Profit: 57500
Closing stock: Nil
Sales Tax Problem:5

1. Mr. Wahed started business with cash 18,00000
2. Purchase furniture worth 20000 for office use
3. Purchase computer worth 120000 for office use
4. Purchase 10 Hero Honda Splendor @38000 each for cash
5. Purchase 5 Suzuki Samurai @37000 each from Kareem on credit
6. Purchase 5 Lml @25000 each from saleem in credit

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7. Sold 10 Hero Honda Splendor @42000 each for cash sales tax10%
8. Sold 5 Suzuki Samurai @40000 each for cash sales tax10%
9. Sold 5 Lml @27000 each to Fatima on credit sales tax10%
10. Paid electricity bill Rs1200
Net Profit: 60300
Closing stock: Nil
Excise duty & sales tax Problem:06

1. Mr. Salaam started business with cash for Rs.600000
2. Purchase 15 Bpl @15000 each for cash
3. Paid carriages on purchase Rs200
4. Sold 10 Bpl @20000 each for cash and excise duty 6%, sales tax 10%
5. Sold 3 Bpl @20000 each to Kareem and excise duty 6%, sales tax 10%
Balance sheet: 606960
Net Profit: 63800
Closing Stock: 30000
Depreciation Problem: 07
1. Mr. Hassan started commenced business with cash for Rs.300000
2. Purchase furniture for Rs. 10000
3. Purchase machinery worth Rs. 20000
4. Purchase computer worth Rs. 20000
5. Purchase Vaccume cleaner worth Rs. 4500
6. Bought 10 color TV sets @10000 each from mustaq and company
7. Bought 10 Audio system @5000 each from Dawood
8. Sold 8 color TV sets @12000 each to Miss Madhu sales tax 10%
9. Sold 9 Audio System @6000 each for cash sales tax 10%
10. Paid cash to Mustaq and company 95000
11. Received cash from Miss Madhu 95000
13. Paid rent 2000
14. Paid cash to Dawood 50000
15. Charge depreciation on Furniture 5%
16. Charge depreciation on Machinery 10%
17. Charge depreciation on Computer 20%
18. Charge depreciation on Vaccume Cleaner 10%
Net Profit: 11050
Problem:08
1. Mr. Hussain started business with cash for Rs. 800000
2. Deposited 200000 into state bank of Hyderabad
3. Purchased sofa set 60000 for cash
4. Purchase 10 Floppy @10000 each from Anjali and company

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5. Purchase 10 cd @5000 each from Mohsin company
6. Sold 10 Floppy @12500 each to Sara and company Excise duty 10%+ Sales tax 10%
7. Sold 9 cd @6500 each for cash Excise duty 10%+ Sales tax 10%
8. Charge depreciation on sofaset 10%
9. Paid Rent 3000
11. Paid cash to Anjali and company 100000
12. Paid cash to Mohsin company 50000
Net Profit: 27500
Closing stock: 5000
Purchase Return Problem: 09
1. Mr. Sumair started business with cash 200000

2. Bought 100 shirts @150 each from Akbar
3. Bought 100 T-shirts @225 each from Ali Hussain
4. Sold 90 Shirts @200 each for cash
5. 4 shirts Return to Akbar @150
7. Paid cash to Akbar 14400
8. Paid Rent 2000
10. Paid cash to Ali Hussain 22500
Net Profit: 7000
Closing stock: 900
Problem 10
Trial Balance: According to J.R Batliboi A Trial balance is a statement of debit and credit balances
extracted from the various accounts in the ledger.
ExpensesDebit IncomesCredit
Looses Debit GainsCredit
AssetsDebit LiabilitiesCredit
Sundry Debtors Debit Sundry creditors Credit
Sales Return Debit Purchase Return Credit
Drawings Debit Capital Credit
Note:
While creating company select in Maintain option Accounts Only
Question:
1. Cash in hand 7200
2. Cash at bank 18654
3. Plant & machinery 17000
4. Sundry Debtor 11356
5. Bills Payable 5600
6. Sundry Creditor 9472
7. Drawings 4800 Dr

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8. Capital 30000
9. Opening stock 13000
10. Bank overdraft 26938
Opening Balance Problem 11

Prepare balance sheet for the year ended 31-dec-1996
Balance sheet
Kareems capital 390000 Furniture 54000
Qaiser and company 34000 Nader and company 20000
Closing stock 50000

Ctv 5@10000 each
Stare bank of Hyderabad 140000
Cash on hand 160000
424000 424000
1. Purchase 45 ctv @10000 each from Qaiser and company

2. Paid carriage on purchase 100
3. Sold 20 ctv @12000 each for cash and sales tax10%
4. Sold 28 ctv @12000 each to Nader and company sales tax10%
5. Received cash form Nader and company 320000
6. Paid cash to Qaiser and company 470000
7. Paid rent 1000
8. Paid for salaries 4000 by Cheque
Balance sheet 552500
Net profit 90900
Closing stock 20000

Balance sheet as on 31-dec-2000
Mr. Shahnawaz 300000 Cash 160000
Irfan and company 30000 Furniture 50000
Closing stock 50000

5 Bpl @10000 each
Wahid and company 24000
State bank of Hyderabad 46000
330000 330000

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1. Bought 30 Bpl @10000 each from Irfan and company
3. Sold 13 Bpl @12000 each for cash sales tax 10%
4. Sold 20 Bpl @12000 each to Wahid and company and sales tax 10%
5. Received cash from Wahid and company 254000
6. Paid to Irfan and company 320000
7. Paid for rent 1000
8. Paid for salaries 2000 by cheque
Net profit 62900
Closing stock 20000
Trade Discount Problem 13

Press F11+F2 for discount separate discount column on invoices: Yessave
1. Mr. Wasif started business with cash for Rs. 300000
2. Purchase 10 Iron sheets @10000 each for cash
3. Purchase 10 Iron sheets @10000 each from Baba electronics
4. Sold 18 Iron sheets @12000 each for cash and discount 2%, Excise duty 10% and sales tax 10%
6. Paid rent 1000
Balance sheet: 474132.80 Net Profit: 29680 Closing stock: 20000
Deposit & Withdrawn, Interest on capital, Interest on drawings Problem:14

1. Mr. Anus Raza quadri started business with cash for Rs. 4,00,000
2. Purchase computer worth 20000 for business use
3. Purchase 10 CD Players @10000 each for cash from Sony and company
4. Purchase 10 Stereo system @5000 each from Mustaq and company
5. Sold 10CD Players @12000 each for cash from Mr. Sanjay
6. Sold 10 Stereo system @6000 each to Mr. Sohail
7. Sold computer worth 18000 which was in office use
8. Paid electricity charges 800
9. Paid medical expenses for the Anus Raza Quadri sons 500
10. Deposited cash into bank 20000
11. Withdraw cash from bank 5000 for office use
12. Withdraw cash from bank 2000 for private use
13. Charge interest on drawing 250
14. Charge interest on capital 4000
Net Profit: 23450
Loan Taken & Loan Given Problem:15
1. Mr. Abdul Razzaq started business with cash 10,00,000

2. Purchase 10 TV @10000 each for cash
3. Purchase 10 coolers @3000 each to Tata company
4. Purchase furniture 5000 for business use
5. Purchase sofa set 4000 for office use
6. Purchase machinery 6000
7. Purchase 10 CD players @4000 each from Haji
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8. Purchase 8 computer @7000 each for cash
9. Sold 9 TV @12500 each for cash Excise duty5%, Sales tax10%
10. Sold furniture 4000 for business use
11. Sold 9 coolers @4000 each to Anus and company on credit Excise duty5%, Sales tax10%
12. Purchase 10 Refrigerator @9000 each for cash
13. Sold 10 Refrigerator @10500 each for cash Excise duty5%, Sales tax10%
14. Sold 8 computer @8500 each for cash Excise duty5%, Sales tax10%
15. Sold 10 CD players @5200 each to Mr. Shahnawaz Excise duty5%, Sales tax10%
16. Purchase cycles 2000
17. Paid interest on capital 10000
18. Loan given to Mukesh and company 4500
19. Loan taken from Basit company 5500
20. Deposited 60000 into SBH
21. Receive interest in loan given 500
22. Paid interest on loan taken 700
24. Charge depreciation on Fixed asset machinery 6% and sofa set 4%
Balance sheet: 11, 92,472.50
Net Profit: 59080
Project of sun detergent Problem: 16

Balance sheet of SUN Detergent
Capital Fixed Assets:

Mr. Walias capital 11,00,000 Good will 90000
Loan: Land & building 200000
Bank loan from Canada bank 100000 Delivery van 150000
Sundry creditor Staff vehicles 100000
Yash & co. 60000 Air conditioner 35000
Loknath co. 55000 Investment
Current liabilities: In shares of Tisco Ltd. 60000
Salaries payable (outstanding) 10000 Deposits
Rent payable 5000 Telephone 5000
Electricity department 10000
Loan
Loan to Ramlal 15000
Sundry debtor:
Prem Kumar 15000
Ujwal Kumar 20000
Closing stock
1500 cakes @ 20 each 30000
Current Assets
Cash in hand 200000
State bank of India 400000
13,30,000 13,30,000

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The following transaction is pertaining to month of April 2000
1. Purchase detergent cakes from Yash & co. on credit 1300 @20 each
1. Sold detergent cakes to prem Kumar on credit 600 @25 each
1. Paid petrol expenses for staff vehicles in Rs. 900 in cash
1. Received a cheque from prem Kumar rs. 10000
1. Sold detergent cakes to Ujwal Kumar 200 @25 each and received a cheque
1. Paid for postage & telegram in cash 150
1. Paid DHL courier for courier bill 900
2. Issued a cheque to Yash & co. 20000
3. Detergent cakes sold to Tirumala Agency 500 @25 each
4. Paid for a Product advertisement to Naveen advertisement agency 9000
5. Paid outstanding salaries by cheque
6. Purchase cakes from Loknath & co. on credit 1000 cakes @20 each
5. Paid for carriage 900 in cash
6. Sold old news paper 3000 in cash
7. Donation paid to old age home by cheque 3000
8. Received cheque no. 876 from prem Kumar 3000
9. Sold detergent cakes to Ramesh Kumar 600 @ 25 each
10. Paid for printing and stationary to rani printer by cheque 900
11. Cash withdrawn from bank 20000
12. 200 cakes distributed as free sample
13. Prem Kumar paid 2000 in cash
14. Sold Investment(cost Rs.20000) at Rs. 40000 and received a cheque
15. Paid commission to selling staff Rs. 1900 by cheque
16. Paid commission to Anand & associated by cheque Rs. 2000
17. Received a cheque from ramesh Kumar 10000
18. Cash withdrawn from bank 30000
19. Paid for petrol bill and maintenance of delivery van by cheque 9000
20. Detergent cakes sold to ramesh Kumar 300 @25 each
21. cash deposited in bank Rs. 5000
22. paid to Loknath & co. 50000
23. purchase detergent cakes from Loknath & co. 300 @20 each
24. sold to Prasad & co. 400 cakes @25 each for cash
25. Paid Rs. 4000 by cheque for Repairs to building
26. Paid for electric charges by cheque Rs. 800
27. Paid salaries to staff Rs. 15000 by cheque
28. Charge appreciation 10% on Land and building.
29. Depreciation 10% on delivery van and staff vehicles & 5% on Air conditioner.
Balance sheet: 1302000/1278800

Net Profit: 23200
Closing stock 26000

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Project of Khans Garments Problem: 17
Balance sheet of Khans Garments on 31st December 2003.
Mr. khans capital 50000 Cash at bank 35000
Mr. Sundarams Loan a/c 10000 Cash in Hand 25000
Kalam & co. 22200 Furniture 15000
Closing stock 3750

(10 shirts @ 225)
(5 Trousers @300)
Andley
1725
Ghouse
1725
82200 82200
January 2004
2. Paid wages and salary by cheque Rs.600
3. Purchase on credit from Kalam & co.
100 shirts 225
100 Trousers 300
4. sold to Mehraj for cash
25 shirts 325
25 Trousers @400
5. Draw cash for Private use Rs.1000
6. Paid Telephone Rent Rs. 450
7. Issued Cheque in favor of Kalam & co. 40000
8. Received Cheque from Ghouse in full settlement Rs.1725
9. Sold to Andley on credit
20 Trousers @400 each
10 Shirts @325 each
10. Ghouse Cheque returned dishonor by bank
11. Sold to Ali on credit
25 shirts @325 each
12. Cash sales on Anand
10 shirts @325 each
13. Purchased one scooter Rickshaw on credit from Delhi motor Co. Rs25000
14. Ghouse declared a dividend of 60% is received from his estate.
15. old newspaper sold for cash 150
16. old furniture sold (cost Rs.4000) Rs. 2500
17. Purchased from Kareem
50 Shirts @225 each
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18. Received cheque from Andley for Rs.8000
19. Deposited cash into bank Rs.2000
20. Taken for personal use
2 shirts
2 Trousers
Net Profit: 9910
Gross Profit: 12400
Trade Discount Problem: 18

1. Mr. Z started business with cash 500000
2. Bought 50 Books @100 each for cash
3. Bought 50 Readers @500 each from Sohail industry
4. Sold 45 Books @110 each for cash and discount 5%
5. Sold 50 Reader @515 each to Parveez company discount 5%
6. Paid cash to Sohail industry 5000
8. Paid rent 2000
Net Loss: 3335.00
Shortage in stocks Problem:19

When the actual physical stock and the stock arrived through transaction does not Tally, there are
certain transaction to be key in like direct deduction or shortage of stock entries
In case if the physical stock is less than the computerized stock, we have to pass excess in stock ot direct
addition entry to update our stocks.
Here, we put shortage of stock to reduce the stock balance of certain products.
The standard fields available in the shortage of stock entries are
Problem
April 2014
1. Mr. Anil started business with cash Rs. 500000
2. Paid deposit to landlord Rs.50000
3. Bought Machinery worth Rs. 30000
4. Purchased for cash
100 cycle (hero) @2000 each

100 cycles (Atlas) @1500 each
5. Paid carriage on purchases Rs200
6. Sold for cash

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75 cycle (Atlas) @1700 each
7. Purcahsed from Ramesh

50 cycle(Atlas) @1500 each
8. Sold goods to suresh

9. Deposited into bank (SBH) Rs.100000
10. Paid to Ramesh 150000
11. Sold to Naresh

12. Received cheque from suresh 190000
13. Naresh becomes insolvent, receiving Rs.30000 in full settlement of their account.
14. Cycle (hero) 5 completely damage due to fire, Insurance Company accepted claim for Rs. 5000
15. Cycle (hero) 1 used for business work
16. Cycle (Atlas) 1 Taken for personal use
Net Profit: 38800
MIS REPORTS (Management Information System)

Press F10for Accounts Reports,
Press F9for Inventory Reports
Cash book, Bank Book etc.

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FOCUS:
INTRODUCTION:
FOCUS 5 provide Lawson software implementation we provide comprehensive technical

support clear business process knowledge and strength in the development execution of project
plan
During the past seven year our consultants have completed over fifty client project span
the full life cycle of ERP (enterprises resources planning)
Meaning of Lawson: Manufacturing software for an integrated accounts
Format of ledgers
Name under
Mr. Alis capital

Drawings
Closing stock
All Current Assets
All current Liabilities Asset/Liabilities
All Taxes
Loan given
Loan taken
Sales tax
Excise duty
Cash Cash/ Petty cash

Bank Bank a/c
Purchase a/c
Purchase return a/c Purchase A/c
Sales a/c
Sales return a/c Sales A/c
Purchase from party

Sundry creditor Customer/vendor
Sales to party
Sundry debtor
All incomes
All expenses
Trading Income/Expenses
Opening stock
Handling charges

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All fixed assets
Which is purchase for office use, business use? Fixed Assets
Or those Assets which not have Quantity
Private use
Personal use Drawings Assets/Liability
Domestic use
Formulas of Focus
Only sales tax is givenbv*aa%
Only excise duty is given bv*aa%
Excise duty+ sales tax+ handling charges
Excise duty bv *aa%
Sales tax (bv + ap)*ab%
Handling chargesac
Excise duty+ handling charges
Excise duty bv*aa%
Handling chargesab
Calculation of closing stock
Item Name Purchase Qty Sales Qty Balance Qty/ (*) Purchase Total
Opening Qty Pur. Return Remaining Qty Price
Sales Return
Oven 10 9 1 50000 50000
Cooler 8 6 2 25000 50000
Total closing stock 100000
Adjustment Entries in focus:-
1. When closing stock is given in the question:-

Closing stock a/c--------Dr
To trading a/c
2. When Drawings is given in the question:-

Capital a/c-------Dr
To Drawings a/c
3. When closing stock is given in balance sheet (last year)

Opening stock a/c-----Dr
To closing stock a/c

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PRACTICAL STEPS OF FOCUS
Open focus
How to create company:-
Click on create companygive the company name Give the accounting Date: 01-04-99
Click on ok
Select the company which we have create
Click on select Click on log in
How to create Ledgers:-

Click on company Click on create masterAccounts treeClick on Add
Give the ledger Name (cash A/c)
Use 3 times Tabselect: Cash/petty cash
Use TabPress Enter
Same process for all ledgers
After giving the details of the ledgerPress 2 Times Esc
How to create items:-

Click on companyClick on create masterProducts treeClick on Add
Give the item Name: Ovens
Use 3 times TabSelect: Finished Goods
Use tabPress Enter
Same process for All itemsafter giving the details of the itemsPress 2 Times Esc
How to pass journal entries:-

Go To Transaction
Cash and BankReceipts
Payments
PurchasePurchase Voucher
Purchase Return
SalesSales Invoices
Sales Return
JournalJournal Entries
Opening Balances
Stock Shortage in Stock

Opening Stock
How to Check Closing Stock:-

Click on InventorySelect Stock Valuation
Click on All ItemsClick on Ok
How to check Balance Sheet:-

Go To Financial Accounting
Final AccountsSelect Balance SheetClick on Ok

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How to create sales Tax
Go to transaction
Voucher Wizard
AdvanceClick on sales invoice
Click on edit screenuse Tab
Heading ->2 times Tab-->formula-->Account to post
Sales Tax bv*aa% Sales Tax
Click on Ok 2 Times
Simple Problem:1
1. Mr. Sohail started business with cash 650000
2. Purchase tables and chairs Rs. 5600 (for office use)
3. Purchase computer worth Rs 25000 (for Personal use)
4. Purchase 10 ovens @50000 each from Gaffar and company
5. Purchase 8 coolers @25000 each for cash
6. Sold 9 ovens @52000 each to Raheem and company
7. Purchase land for personal use 52000
8. Sold 6 coolers@27000 each to Parvez and company
10. Paid for Advertisement 1000
11. Receive commission 2000
13. Paid rent 5000
Net Profit: 17300
Deposit & Withdrawn Problem:02

1. Miss Anee started shoe museum business with cash 800000
2. Purchase land 52000 for office use
3. Purchase Herohonda 35000 for personal use
4. Purchase tables and chairs 7000
5. Purchase 100 sandals @200 each from Milan Shoe
6. Purchase 150 Shoes @500 each from Bata company
7. Purchase 180 Hawaii chapels @60 each from Sitara showroom
8. Sold 80 sandals @250 each to Rafi and company
9. Sold 20 sandals @230 each to Mr. Raju
10. Sold 130 Shoes @550 each to Sai Showroom
11. Sold 100 Hawaii chapels @80 each to cobbler
12. Sold 70 Hawaii chapels @95 each to 5 star chapel
13. Purchase computer 20000 private use
14. Purchase furniture 80000 for Domestic use
15. Charge interest on drawings 13500
17. Charge depreciation on Fixed assets 20%
18. Paid salary 3000
19. Deposit cash 60000 into state bank of India
20. Withdraw cash 6000 into state bank of India

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21. Withdraw cash from state bank of India 2000 for domestic use
22. Paid electricity charges 800 by cheque
23. Paid rent and advertisement charges 6000 by cheque
Net Profit: 2450
Sales Tax Problem: 3

1. Mr. Irfan started business with cash 300000
2. Deposited cash 30000 into bank
3. Bought Tables 500 for office use
4. Bought fans 700 for office use
5. Bought Ac 2000 for private use
6. Bought 78 Herohonda @35000 each from Raheem Automobiles
7. Bought 30 scooter @26000 each for cash
8. Sold 76 Herohonda @40000 each to Raj electronics sales tax 10%
9. Sold 29 scooter @30000 each for cash and sales tax 10%
10. Withdraw cash 20000 from bank for office use
11. Withdraw cash 10000 from bank for private use
13. Paid Bad debts 20000
14. Paid cash 30000 to Raheem Automobiles
15. Receive cash from Raj electronics 20000
17. Paid Rent 2000
Net Profit: 441000
Excise Duty& Sales tax Problem: 4

1. Mr. Sajid started business worth 500000
2. Purchase 20 CD @200 each from sameer
3. Purchase 80 Floppy @300 each for cash
4. Sold 18 CD @250 each for cash Excise duty2% and Sales tax3%
5. Return 2 CD @200 each to sameer
6. Sold 80 Floppy @320 each for cash Excise duty2% and Sales tax3%
7. Purchase computer @20000 for office use
8. Sold computer @18000 which was in office use
10. Paid rent 1000
Balance sheet: 505123.06
Net Loss: 2500
Excise duty, Sales tax & Handling Charges Problem: 5

1. Mr. Abdul Razzaq started business with cash 10,00,000
2. Purchase 10 TV @10000 each for cash
3. Purchase 10 coolers @3000 each to Tata company
4. Purchase furniture 5000 for business use

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5. Purchase sofa set 4000 for office use
6. Purchase machinery 6000
7. Purchase 10 CD players @4000 each from Haji
8. Purchase 8 computer @7000 each for cash
9. Sold 9 TV @12500 each for cash Excise duty5%, Sales tax10%, Handling charges 150
10. Sold furniture 4000 for business use
11. Sold 9 coolers @4000 each to Anus and company on credit Excise duty5%, Sales tax10%,
Handling charges 150
12. Purchase 10 Refrigerator @9000 each for cash
13. Sold 10 Refrigerator @10500 each for cash Excise duty5%, Sales tax10%, Handling charges
150
14. Sold 8 computer @8500 each for cash Excise duty5%, Sales tax10%, Handling charges 150
15. Sold 10 CD players @5200 each to Mr. Shahnawaz Excise duty5%, Sales tax10%, Handling
charges 150
16. Purchase cycles 2000
18. Loan given to Mukesh and company 4500
19. Loan taken from Basit company 5500
21. Receive interest in loan given 500
22. Paid interest on loan taken 700
24. Charge depreciation on Fixed asset machinery 6% and sofa set 4%
Balance sheet: 11, 92,472.50
Net Profit: 59080
Opening Balance Problem: 6

Mr. Azher capital 194000 Cash 60000
Closing stock 50000

5 Bpl @10000 each
224000 224000
1. Purchase 30 Bpl @10000 each from Irfan and company


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5. Sold 20 Bpl @ 12000 each to Wahid and company
6. Purchase 10 Audio system @6000 each from Awais and company
7. Sold 5 Audio system @7500 each to Ghouse and company and sales tax10%
8. Sold 4 Audio system @7550 each to Khaleel and company and sales tax10%
10. Received cash from Ghouse and company 40000
11. Received cash from Khaleel and company 30000
12. Paid cash to Irfan and company 300000
13. Paid office rent 1600
15. Paid Advertisement charges 2000 by cheque
16. Depreciation on furniture 12%
Net Profit: 68000
Opening balance Problem: 7

Balance sheet as on 31-mar-2014
Mr. Abdul Samad capital 300000 Cash 140000
Naser and company 24000 Furniture 54000
Closing stock 50000

5 Bpl @10000 each
Habeeb and company 20000
224000 224000
1. Purchase 40 Bpl @10000 each from Naser and company

3. Sold 12 Bpl @12000 each for cash sales tax10% and Handling charges 100
4. Sold 30 Bpl @12000 each to Habeeb and company sales tax10% and Handling charges100
5. Received cash from Habeeb and company 370000
6. Paid cash to Naser and company 410000 in cash
7. Paid rent 2000
8. Paid salaries 3000 by Cheque
9. Return 1 Bpl to Naser and company
10. Return 1 Bpl from Habeeb and company with sales tax 10%
Net profit: 77100
Closing stock:

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Multiple Currencies Problem: 8
Introduction: Many organizations are operating in a number of foreign countries, apart from operating
in their home country. Home country refers to the country in which an organization is incorporated. The
currency of the home country is usually called Base Currency. The countries other than the home
country are called foreign countries and the currency if these foreign countries are called foreign
currencies.
Steps:
Go tocompanypreferencesclick input currency rate separateok
1. Mr. khan started business with cash Rs. 3,00,000
2. Purchase 10CD Players for cash @ Rs. 10,000 each.
4. Cash Sales 7CD Players @ Rs. 12,000 each
5. Deposited in ICICI Bank Rs. 50,000
6. Bought Vaccume Cleaner for cash (value of Vaccume cleaner is 200Us dollars) market Value of
Us dollars on that date is Rs. 65
7. Paid salaries Rs. 3,000
8. Paid Rent Rs. 1,000

Net Profit: 9500
Shortage in stocks Problem: 9

When the actual physical stock and the stock arrived through transaction does not Tally, there are
certain transaction to be key in like direct deduction or shortage of stock entries
In case if the physical stock is less than the computerized stock, we have to pass excess in stock ot direct
addition entry to update our stocks.
Here, we put shortage of stock to reduce the stock balance of certain products.
The standard fields available in the shortage of stock entries are
Problem09
April 2014
1. Mr. Anil started business with cash Rs. 500000
2. Paid deposit to landlord Rs.50000

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3. Bought Machinery worth Rs. 30000
4. Purchased for cash

100 cycles (Atlas) @1500 each
5. Paid carriage on purchases Rs200
6. Sold for cash

7. Purcahsed from Ramesh
50 cycle(Atlas) @1500 each
8. Sold goods to suresh
9. Deposited into bank (SBH) Rs.100000
10. Paid to Ramesh 150000
11. Sold to Naresh

12. Received cheque from suresh 190000
13. Naresh becomes insolvent, receiving Rs.30000 in full settlement of their account.
14. Cycle (hero) 5 completely damage due to fire, Insurance Company accepted claim for Rs. 5000
15. Cycle (hero) 1 used for business work
16. Cycle (Atlas) 1 Taken for personal use
Net Profit: 38800
Maintain Warehouses/Godowns wise Stock Balances Problem 10
Godowns/Warehouse: The terms Godowns/Location/Warehouses refer to a place where the stock

items are stored. It could be a warehouse, Rack, Shelf, Bin etc. Focus allows you to monitor location wise
storage and movement stock items. With Focus, it is possible to create multiple Godowns and record
Inventory transaction specifying the location.
Steps
Go Tocompany Preferences Click Maintain Warehouse-wise Stock Balance ok

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First create Godowns in Company Create Master Godowns
Transaction Voucher Wizard Advance select Purchase Voucher Warehouse select
Body ok
Transaction Voucher Wizard Advance select sales Invoice Warehouse select Body
ok
1. Mr. Sunny started business with cash Rs. 300000
2. Purchase 30 ctvs for cash Rs10000 each
10 are stored in Main location
10 are stored in Reserve
10 are stored in Godown A
3. Paid carriage on Purchases Rs. 1000
4. Sold 15 ctvs for cash @12000 each
5 from Main location
5 from Reserve
5 from Godown A
5. Paid Salaries Rs. 2000
6. Paid Rent Rs. 1000
Net Profit: 26000
Department Problem:11
Department-wise Ledger Balances: Focus shows ledger balances of selected account in the data entry
screen. With this option checked, Ledger balances for the selected department would be shown.
Moreover, when this option is selected, the accounts Query would give you ledger balances department
wise.
Steps:
Create departmentGo to company Create masters Department

Company Preference Select Maintain Department wise Ledger Balances Click on ok and
again Click on ok
Transaction Voucher Wizard Advanced
Select Payment under Department select Body
Select Purchases voucher under Department Head select Header
Select Sales Invoice under Department Head select Header
Viewing Department wise Profit:
Financial Accounting final Accounts Profit & Loss A/c
Click on set Reports Filters
Field type Comparison Value Conjunction

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Department Name containing Audio Dept. only
Same process for all
Click on okok
Prepare Journal Entries for the following transaction of Mr. Pasha
April 2014
1. Mr. Pasha started business with cash Rs. 500000
2. Purchased 10 ctvs @10000 each for cash (TV Department)
3. Purchased 10 Audio system @5000 each from Ali (Audio department)
4. Sold 10 ctvs @1200 each for cash (TV Department)
5. Sold 10 Audio System @6000 each for cash
6. Paid Salaries Rs. 2000 (TV Department) & Rs. 1000 (Audio Department)
Balance sheet: 577000/550000
Net Profit: 27000
Closing stock: Nil
Profit TV Department: 18000
Profit Audio Department: 9000
Batch wise inventory tracking Problem: 12

Industries like Pharmaceutical manufacturers and traders require batch wise inventory tracking
system where the items received are maintained in batches.
Each batch would have a unique number either numeric or alpha-numeric, expiry date, Manufacturing
date and a price tag.
Steps:
Go To Preferences Click Maintain Batch wise Rates
Expiry dates for batches
Manufacturing date for batchesok
Transaction Voucher Wizard Advanced select purchase Voucher Select Body in
Batches Ok.
January
2014
1. Mr. Khan started business with cash for Rs. 700000
2. Purchase for cash
Item A 10 @5000 each
(Goods to be allotted in Batch 1)
3. Purchase from ABC and co.
Item A 10 @5000 each
(Goods to be allotted in Batch 2)
4. Paid carriage on Purchase Rs. 500
5. Cash sales Item A 10 @6500 each
(5 transferred from batch 1 & Remaining form Batch 2)
6. Cash sales Item A 3nos (transferred from batch1)
7. Paid salaries Rs. 5000
8. Paid Rent Rs. 2000
Net Profit: 12000 Closing stock: 35000

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Purchase order, Sales order, Purchase Quotations, Sales Quotations Problem: 13
Purchase order:
Companies pay purchase order after the purchase quotations are processed. The operator has to enter
the purchase orders received for future correspondence and other processing reports.
The data-entry of purchases orders is similar to that described for Sales orders.
Sales order:
Companies received sales orders after the sales quotations are processed. The operator has to enter the
sales orders received for future correspondence and order processing reports.
Purchase Quotations:
Companies send purchase quotations to its various suppliers, before they actually place the purchase
order. The user can enter these quotations and maintain a separate register for the summary list of
quotations received items wise or party wise.
Sales Quotations:
Companies receive sales quotations from its various customers, before they actually place the sales
order. The user can enter these quotations and maintain a separate register for the summary list of
quotation received item wise or party wise.
April
2015
1. Mr. Abdul Samad commenced business with cash 25,00,000
5. Paid for shop deposit Rs. 100000
6. Purchased Furniture worth Rs 100000
9. Purchased Computer worth Rs. 20000
10. Company sends Purchase quotations to XYZ co. and ABC co.
100 LG @7000 each
100 Samsung @8000 each
15. Mr. Abdul Samad places an order to ABC co.
50 LG @7000 each
20. Received the goods which were ordered to ABC co.
25 LG @7000 each
21. Company Paid to ABC co. in full settlement

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23. Company receives the sales quotation from Dawood co.
10 LG @7500 each
23. Company receives the sales quotations from Moiz co.
10 LG @8000 each
25. Company receives the sales order from Moiz co.
10 LG @8000 each
28. Company issued the goods to Moiz co. which was ordered earlier
29. Company received the cash in full settlement from Moiz co.
30. Paid salaries Rs5000
30. Paid Rent Rs.2500
Balance sheet: 25, 12,500
Net Profit: 12,500
Closing stock: 2, 25,000
Post Dated Receipts Problem: 14
Companies have transactions where they used to pay their receipts or receipts through post dated
cheque. The data entry is the same as that of Post dated Payments.
January 2015
1. Mr. Ghouse started business with cash for Rs. 15,00,000
3. Purchased Furniture for office use Rs 75000
4. Cash deposited in Bank 300000
5. Purchase from Jack & co.
100 Reebok Shoes @1000 each
7. Purcahse from Layeeq

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100 Adidas shoes @1200 each
9. Paid to Jack & co. by PDC Rs. 50000 (Maturity Date: 20-04-15)
11. Paid to Layeeq & co. by PDC Rs. 60000 (Maturity Date: 20-04-15)
13. Sold to Metro Footwear
50 Reebok shoes @1200 each
15. Sold to Javeed
50 Adidas shoes @1500 each
17. Received PDC from Metro Footwear for Rs. 30000(Maturity Date: 24-04-15)
19. Received PDC from Javeed for Rs. 40000(Maturity Date: 26-04-15)
20. PDC issued to Javeed has been cleared by Bank
22. PDC issued to Layeeq has been cleared by bank
21. Paid salaries Rs.7000
23. Paid Rent Rs.5000
24. PDC received from Metro and co. credited by bank to our account.
25. Paid electricity charges Rs.300
26. PDC received from Javeed has been cleared and credited by bank to our account
27. Telephone charges Rs400
30. Maintenance charges RS.500
Balance sheet: 16,21,800
Net Profit: 11,800
Closing stock: 1,10,000
For Received or Paid PDC Utilities Convert Matured PDCS to voucher

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Payroll Problem: 15
Focus.5Payroll is fully integrated with Accounting to give the users the benefit of simplified Payroll
processing and accounting.
Focus.5Payroll enables users to set up, implement and process Payroll with simple to complex criteria,
as per the organizations requirements. The predefined processes available inFocus.5 help to automate
the Payroll processing without any errors.
Focus.5Payroll also provides management related Information reports and statutory Forms and reports
in the prescribed formats viz., Pay Slip, Payroll Statements, Attendance and Overtime Registers,
Gratuity, PF, ESI, PT, Income Tax, Expat Reports and so on.
Payroll Features ofFocus.5
Features ofFocus.5 Payroll
The key features of the Payroll functionality inFocus.5 are as follows:
It is fully integrated with accounts to give the benefits of simplified Payroll processing and
accounting
It has user defined classifications and sub-classifications for comprehensive reporting. This may
be related to the employees, employee groups, pay components, departments etc.
It provides the facility to create user-defined Earnings and Deductions Pay Heads
It allows flexible and user-definable criteria for simple or complex calculations
It allows the unlimited grouping of Payroll Masters
It supports user-defined production units i.e., attendance/ production/ time based
remuneration units
It provides a flexible payroll processing period
It provides comprehensive cost centre as well as employee-wise costing reports
It ensures an accurate & timely Salary processing, Employee Statutory Deductions & Employer
Statutory Contributions with the help of predefined processes
It provides auto-fill facility to expedite the Attendance, Payroll & employer contributions
processes.
It facilitates an accurate computation and deduction of Income Tax, ESI, EPF, Professional Tax,
Gratuity etc.
It helps in the generation of Statutory Forms & Challans for Income Tax, EPF & ESI, as prescribed.
It allows drill-down facility to voucher level for any kind of alteration
It facilitates computation of arrears pertaining to prior period(s)
It helps in tracking employee loan details.
Five Easy Steps to Generate a Pay Slip
The new enhanced Payroll inFocus.5 requires minimal effort for accurate salary processing. It takes only
five easy steps to process payroll and generate Pay Slip inFocus.5.

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How to Calculate Indian ESI from Employee Salary with Example
Employee's State Insurance Definition:
Employee's State Insurance scheme is a self-financing social security and health insurance scheme for
Indian workers. Any labor who earns below Rs 15000 as his or her monthly salary will be covered under
the ESI. Both the employer and employee donate for ESI. Employer's contribution is around 4.75% and
employee's contribution is 1.75%.
Example 1:
Find out the ESI for the basic salary of Rs 9000?
Step 1:

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Enter the salary, For e.g. 9000
Step 2:
Employee contributes 1.75% for ESI. Now compute as shown here, ESI = 9000*(1.75/100) = 158
Step 3:
Employer contributes 4.75% for ESI. Compute as shown here, ESI = 9000*(4.75/100) = 428
It is a sum paid to defray special expenses entailed by the nature of employment and as such this
amount does not amount to wages.
(In lieu of old instructions issued vide Memo No.Ins.III/2/1/65 dt. 8.2.1967)
SUSPENSION ALLOWANCE/SUBSISTENCE ALLOWANCE
During the suspension period the employee is not allowed to actually work and he is not given full
remuneration but the permissible subsistence allowance is paid to the employee by way of
remuneration for remaining attached to the services of the employer as per the relevant service
regulations governing his contract of service, therefore, the subsistence allowance is part of wage as
defined under Sec.2(22) of the ESI Act and consequently on the amount of subsistence allowance paid to
the suspended employee, contribution is payable.
Supreme Court has also held in the case of RD, ESIC Vs.M/s.Popular Automobiles etc.in its judgement dt.
29.9.97 in Civil appeal no.3850 of 1993 that suspension/subsistence allowance is wage and contribution
is payable under Sec.2(22) on the said amount.
(In lieu of earlier instructions were issued vide Memo No.3(2)-1/67 dt. 3.6.67 & letter No.Ins.III(2)-2/71
dt. 10.8.1971)
OVERTIME ALLOWANCE
In the case of the employer as and when the employer finds the need to have work done expeditiously,
in addition to the normal work during the course of the working hours, the employer offers to the
employee to do the overtime work after the working hours. When employee does overtime work it
amounts to the acceptance for the same, hence there emerges concluded implied contract between the
employer and the employee. Both the remuneration received during the working hours and overtime
constitutes a composite wage and thereby it is a wage within the meaning of Sec.2(22) of the ESI Act.
Therefore, the contribution is payable on the overtime allowance. However, overtime allowances will be
considered as wage for the purpose of charging the contribution only and will not be considered for the
purpose of the coverage of the employee under the Scheme.
The same view was held by the Supreme Court in its judgement delivered on 6.11.96 in the case of
Indian Drugs & Pharmaceuticals Ltd. Vs. ESIC, in Civil Appeal No.2777 of 1980.
(Old instructions issued vide memo No.3-1(2)/3(1)/68 dt. 31.5.68).
ANNUAL BONUS:
Bonus paid to the employees could not be treated as wage for the purpose of charging of contribution
under Sec.2(22), provided the periodicity of the payment is more than 2 months. The said issue was also

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considered in the meeting of the ESI Corporation held on 19.12.1968 and the Corporation agreed to the
recommendations of the Standing Committee that bonus may not be treated as wage.Hence no
contribution is payable on annual Bonus.
(Earlier instructions were issued vide memo No.Ins.III/2(2)-2/67 dt. 8.2.1967).
INCENTIVE BONUS:
As per the decision of the Supreme Court delivered on 8.3.2000 in the case of M/s.Whirlpool India Ltd.
Vs. ESIC in civil appeal No.1903 of 2000, additional remuneration to become wages has to be paid at
intervals not exceeding two months as distinguished from being payable. Thus, there has to be actual
payment and the payment of production incentive does not fall either under the 1st part or last part of
the definition of the term wages as defined in Sec.2(22) of the Act, hence no contribution is payable on
the incentive bonus, provided the periodicity of payment is more than 2 months.
(Earlier instructions were issued by this office vide Memo No.T-11/13/53/19-84-Ins.IV dt. 19.9.84,
Memo No.Ins.III-2(2)/2/69 dt,. 26.12.73, Memo No.T-11/13/54/18/82-Ins.IV dt. 14.7.82 & Memo
No.D/Ins.5(5)/68 dt. 18.9.88.)
PRODUCTION BONUS:
Production Bonus like incentive bonus is paid to the workers as additional remuneration and hence like
incentive bonus such additional remuneration in order to become wages has to be paid at intervals not
exceeding 2 months as distinguished from being payable. Thus, there has to be actual payment and
hence no contribution is payable, provided periodicity of the payment is more than 2 months.
(Earlier instructions issued vide letter dated 4(2)/13/74-Ins.IV dated 2.9.85)
INAM/EX-GRATIA PAYMENT:
Inam represents a payment made by the employer to any employee as a reward for the services
rendered by him for which he is/was not under obligation to render the same under the contract of
service which is expressed or implied but does not include the payment which have been made to an
employee in fulfillment of contract of service. This may include exgratia payment.
Where Inam is being paid for special skill or higher responsibilities/additional duties, it may be taken as
remuneration and contribution is payable.
Where the employer has introduced the scheme of Inam but according to terms and conditions the
employer has no right to withdraw it or revise it, the same may be treated as wages and contribution is
payable.
Where the employer has introduced the scheme of Inam and he has right to revise or withdraw it at his
discretion, the payment of Inam under such scheme may not be treated as wages and contribution is
not payable provided the payment is made at an interval exceeding two months..
Where there is no scheme of Inam in writing but still employer might be making payment under the
head Inam on the basis of some understanding between the parties, in such cases, the nature of
payment and its periodicity may be ascertained and whether payment of Inam is an excreta payment
which is not covered by the contract of service. In case the periodicity is more than 2 months, no
contribution may be charged.
(Last instructions were issued vide letter No.D-Ins.5 (5)/68 dated 21.2.1975).

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Wages Paid During Layoff:
During the period of layoff though the employee is not given actual work and is also not given full
remuneration but certain wages are paid to the employee by way of remuneration for remaining
attached to the factory/establishment of the employer, therefore, such payments paid for the period of
layoff are also wages for the purpose of Sec.2 (22) of the ESI Act and hence contribution is payable on
such payments.
(Earlier instructions were issued in 1968).
Annual Commission
Sales Commission would fall within the 3rd category of wages as defined underthe Act as additional
remuneration and there has to be actual payment as the word used is paid and not payable, at intervals
not exceeding two months. The question as to why the period of 2 months is fixed was debated in
Supreme court in the case of Handloom House, Ernakulam Vs. RD,ESIC in Civil Appeal No.2521 of 1999
when it was held that no employer shall have the permission to draw the payment of contribution on
the premise that annual payments have to be work out. Normally, the wage period is one month, but
the Parliament would have thought that such "wage period" may be extended a little more but no
employer shall make it longer than two months. This could be the reason for fixing a period of two
months as the maximum period for counting the additional remuneration has to make it part of 'wage'
under the Act. Therefore, the annual commission is excluded from the definition of the wages and hence
no contribution is payable on the annual commission.
( Earlier instructions were issued vide Hqrs.letter No. Ins.III(2)-2/71 dated 10.8.71).
House Rent Allowance

House Rent Allowance is wage in cases where it is being paid. Notional amount of house rent can not be
presumed as wages for deciding the coverage. In cases where an employee is being paid house rent
allowance, the same will be included both for coverage and contribution. In cases where the staff
quarters have been allotted the amount of salary and wages paid will count for coverage and
contribution and no notional house rent allowance is to be presumed in such cases.
In the cases of Braithawait & Co. Vs. ESIC and M/s.Harihar Polyfibres Vs. ESIC, Bangalore, Supreme Court
has also held that house rent allowance is a wage under Sec.2(22) of the ESI Act.
(Earlier instructions were issued vide memo No.T-11/13/11/15-Ins.III dt. 28.9.75, No.Ins.III(2)/15/15/74-
Ins.Desk.I dated Dec.,76, No.T-11/13/53/19-84/Ins.IV dt. 19.9.84 & No.D.Ins.II/11/3087/303 dated
1.3.1985).
Night Shift/Heat/Gas & Dust Allowance:

It is an additional remuneration paid to the employee for performing duty atnight time during the hours
of darkness. This amount is paid by way of incentive under the scheme of settlement entered into
between the Management and its workmen and hence are wages within the meaning of Sec.2(22) of the
ESI Act. This view was observed by the Full Bench of Karnataka High Court in the case of NGEF Ltd. Vs.
Dy.Regional Director, ESIC, Bangalore. Supreme Court in the case of M/s.Harihar Polyfibers Vs. RD ESIC,
Bangalore has also held the same view. Hence, Night Shift Allowance, Heat, Gas & Dust allowance are
wages under Sec.2(22) of the ESI Act and contribution is payable on the said amount paid by the
employer to the employees.
(Earlier instructions were issued vide Memo No.T-11/13/53/19/84-Ins.IV dated 19.9.94).
CONVEYANCE ALLOWANCE

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Fixed conveyance allowance flowing out of a wage settlement or as per terms and conditions of
employment should be treated as wages under section 2(22) for all purposes except:
1. Amount towards conveyance paid or reimbursed to any employee for incurring expenses for
specific duty related journey
2. Reimbursement of actual cost of conveyance for coming to work and going from work on
production of ticket or season ticket and subject to proof of actual expenditure
3. Payment of certain amount for maintenance of vehicle depending upon cadre of the official and
category of vehicle and subject to production of records for actually maintaining the vehicles
4. Fixed allowance paid at an interval exceeding 2 months, unless such payment is made as per
contract or agreement.
Service Charges
Service charges are collected by management of the hotel on behalf of their employees in lieu of direct
tips and the same is paid to their employees at a later date.
Such amount collected as service charges will not constitute wages under Sec.2(22) of the ESI Act. In the
case of ESIC Vs. M/s.Rambagh Palace Hotel, Jaipur, the High Court of Jaipur has held that service charges
are not wages under Section 2(22) of the ESI Act. This verdict of the High Court of Jaipur was accepted in
the ESIC and hence no contribution is payable on service charges.
(Earlier instructions were issued vide letter No.P-12/11/4/79-Ins.Desk.I dt. 18.9.79)
Medical Allowance
The employees working in factories/establishments are being provided medical services in kind by the
employer but in certain factories/establishments instead of providing medical services in kind, the
amount spent by the employees on medical care is reimbursed while in some other organisations,
employees are being paid monthly cash allowance in lieu of medical aid/reimbursement of medical
expenses. Where such payments are made by the employer in lieu of the medical benefit, the same are
to be treated as wages under Sec.2(22) of the ESI Act and the contribution is chargeable.
(Earlier instruction were issued vide letter No.Ins.5(5)/68-Ins.III dt. 21.8.71 & Ins.III/2(2)2/68 dated
24.6.71)
Newspaper Allowance
In certain factories/establishments the employees are reimbursed the cost of Newspapers while in some
other factories/establishments the employees are paid monthly newspapers allowance instead of
reimbursement of the cost of the Newspapers. Where the amount is being paid regularly to the
employees by the employer as Newspapers allowance the same will be treated as wages under
Sec.2(22) of the ESI Act and the contribution is chargeable. However, where the cost of Newspapers is
reimbursed to the employees, no contribution is to be charged on such payments.
Education Allowance:
Employees are being paid monthly Education allowance for the children studying in the
Schools/Colleges. Where such education allowance is being paid monthly, the same is to be considered
as wages under Sec.2(22) of the ESI Act and the contribution is chargeable on the said amount.
However, in such cases where instead of paying the education allowance on monthly basis, the amount
spent as fee is reimbursed to the employees and booked under education allowance, in such cases no
contribution is payable.

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Drivers Allowance
In some of the factories/establishments the officers employed as employees are being paid drivers
allowance per month. This allowance is being paid to enable the officers to appoint a driver at their own
level and such drivers employed are not being paid salary directly by the factories/establishments.
Where such allowance is being paid to the employees and the drivers are not engaged by the
employees, in such event the allowance paid as such will be considered as wage under Section 2(22) of
the ESI Act and contribution will be chargeable provided the employee is coverable under the Scheme.
However, where the services of the drivers are being utilised, in such event the drivers so engaged will
be covered as employee and contribution will be payable on the amount paid to the drivers as salary
and booked in the ledgers of the employer under the heading "Drivers Allowance".
Food/Milk/Tiffin/Lunch Allowance:
Each case of payment of Food, Milk, Tiffin and Lunch Allowance has to be examined on its merits
depending on the following conditions under which the allowance is payable:-
Tiffin/Food/Milk/Lunch Allowance paid in cash at a fixed rate irrespective of whether the person
is absent or on authorised leave etc. may be treated as wages.
Tiffin/Food/Milk/Lunch allowance paid in cash with deduction for leave or absence etc. may not
be treated as wages.
Tiffin/Food/Milk/Lunch allowance paid in kind i.e. canteen subsidy/food subsidy etc. may not be
treated as wages.
(Earlier instructions were issued vide letter No.P-11/13/97-Ins.IV dated 2.2.1999)
Gazettes Allowance
Certain factories/establishments are paying gazetted allowance to its employees in lieu of duties
performed by them on gazetted holidays. Such gazetted allowance is not wage for the purpose of
Sec.2(9) of the ESI Act. However, it will be wage for the purpose of Sec.2(22) of the ESI Act and the
contribution are to be recovered on such payments.
Wages And Dearness Allowance For Un substituted Holidays:

Such wages and dearness allowance paid to the employees for the un substituted holidays are to be
treated as wages under Sec.2(22) of the Esi Act and the contribution is payable. High Court of Gujarat in
the case of ESIC Vs. New Assarw Manufacturing Co.Ltd. held the same view.
Exgratia Payment During Strike For Travelling Expenses
Like conveyance allowance if any exgratia payment is made during the period of strike to some of the
employees to incur certain travelling expenses such amount will neither be considered as wage under
Sec.2(9) nor under Sec.2(22) of the ESI Act and no contribution is payable on such amount. High Court of
Bombay in the case of ESIC Vs. Willman (India) (P) Ltd. in case No.210 of 1976, held the same view.
Interim Relief:
Interim relief paid to the employees is normally paid when either the wage is under revision or when the
payment of Dearness Allowance is delayed due to any reason. Whatsoever may be the case, if the
interim relief is paid to the employees by any employer, the same will amount the wages within the

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meaning of Sec.2(22) of the ESI Act and contribution is payable thereon.
Saving Scheme
Certain factories/establishments are contributing towards the saving scheme for the welfare of the
workers. Such amount paid by the employer as his contribution to the saving scheme, will not constitute
wages under Sec.2(22) of the ESI Act and the contribution is not payable. (Earlier instructions were
issued vide Memo No.P-12/11/4/77-Ins.IV dt. 15.11.80)
Attendance Bonus
It is a special allowance being paid by certain employers to their employees to discourage the workers
from absenting from the job. Any amount paid by the employer to its employees as Attendance Bonus
will constitute wages under Sec.2(22) of the ESI Act and the same opinion was held by Bombay High
court in the case of ESIC Vs. Indian Dyestuff Industries Ltd.. However, the periodicity aspect has to be
kept in mind. In case the periodicity is more than 2 months, the same will not constitute wages and no
contribution will be payable as in the case of incentive bonus.
Payment Made To Rickshaw Pullers,Hathrairy Pullers And Truck Operators (Including Loading &
Unloading Charges When The Loaders/Unloaders Are The Employees Of The Truck Operators:
Rickshaw pullers, Hathrairy pullers and Truck Operators (who bring labour with them) no contribution is
payable on the amount paid by the employer if the amount paid is lumpsum amount including
loading/un-loading charges and no separate wages are paid by the employer.
Similar view was held by Bombay Division Bench in 1990 in the case of Raisaheb Tekchand, Mohate Mills
Vs. R.D. ESIC. Hamals/Coolies Employed At A Partiular Time
Where Hamals & Coolies are employed at a particular place and a particular time, outside the premises
of the factory/establishment to perform a specific job on the spot in such cases no contribution is
payable on the amount paid to such Coolies/Hamals, however the contribution is payable on the
amount paid to the coolies and hamals for services rendered within the premises of the employer.
Bombay High Court in the case of Parley Bottling Co.Ltd. VS. ESIC,Bombay
1989 and Supreme Court in the case of ESIC VS.Premier Clay Products, have held this view.
Short Period Contract For Service - Electrician, Carpenters, Mechanics, Plumbers Etc./Repair Work Done
On Shop
In such cases also contribution is payable on the amount paid by the Employer if the services are
rendered within the premises. This view was also held by Punjab and Haryana High Court vide its
judgement dated 29.3.84 in the case of Modern Equipment Vs. ESIC in Civil Appeal No.3218 of 1989.
Expenditure On Servicing Of Machines
No contribution is payable on the servicing of machines where the job awarded is to the Engineer and
instead of contract of service, there is a contract for service for servicing of machines.

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Expenditure On Annual/Periodical Service Contract
In the factories/establishments certain amount is being paid by the employer to the supplier of
machines or to the firms of repute for the annual/periodical servicing of the machines and for such
purposes the contract is awarded. In such cases no contribution is payable on the amount paid for
annual/periodical service contracts.
Commission To Dealers/Agents:
Where dealers/agents are appointed by the employers but no regular wages are paid and it is not
obligatory on the part of such dealers/agents to attend to the factories/ establishments and they are
paid commission only on the quantum of sales, in such cases the amount paid by the employer as
commission/dealership does not constitute wage under Section 2(22) of the ESI Act and hence no
Service Contract
Amount paid to an organization for maintenance of Machinery/Equipments as part of service contract

will not attract ESI contribution.
Payment Made To Labor Consultants, Lawyers, Engineers, Counsels, Chartered Accountants:
The amount paid by the employer to labor consultants, lawyers, engineers, counsels, chartered
accountants does not constitute wage as per provisions under Section 2(22) of the ESI Act and hence no
The following items will form part of the wage both under Section 2(9) i.e for considering the employee
for the purpose of coverage and Section 2(22) of the ESI Act for the purpose of charging of contribution:-
Matinee allowance which is being paid to employees in Cinema Houses.

Shift allowance paid to employees who work on shift duty at odd shifts.
Location allowance paid, in addition to Dearness Allowance to meet the high house rent.
Compensatory allowance.
Cash handling allowance paid to Cashier.
Supervisory Allowance.
Additional pay paid to training staff.
Charge allowance
Steno/Typist allowance
Plant allowance
Honorarium for looking after the hospital/dispensary
Computer allowance
Gestetner/Photocopier/Printer allowance
Personnel/Special allowance
Machine allowance
Convassing allowance
First-aid allowance

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Personnel allowance - Pay over and above the basic wage and Dearness allowance for skill,
efficiency or past good records.
Area allowance - given to employees living in a particular area to meet the high cost of living in
that area.
Extra payment if payment is made within an interval of two months.
The following items will not form part of the wage either under Section 2(9) or under Section 2(22) of
the ESI Act:-
Payment made on account of un-availed leave at the time of discharge.

Commission on advertisement secured for Newspapers, if not paid to the regular employee.
Fuel allowance/Petrol allowance
Entertainment allowance
Shoes allowance
Payment made on account of gratuity on discharge/retirement.
Payment made on encashment of leave.
Steps of focus Payroll

Go to Payroll menuselect Set payroll date
Give the last date of the month
Click on ok
Go to Payroll preference
In earning menu
Give the basic salary Give the formula wdw Accounts to post Basic salary
Give the travelling allowance Give the formula vdx Accounts to post Travelling allowance

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In deduction Menu
Give the Provident fund give the formula vfu Accounts to post Provident fund
In miscellaneous menu
Give the number of working days25

Click on separate employee A/c
Salary A/c: Salaries
Payroll Credit A/c: Cash
Then click on ok
Go to payroll create employee
Click on add

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Give the employee name: Mohd. Sameer
Designation: Accountant
Basic Salary: 10000
Payable Account: Cash
Salary Account: Salaries
Go to earning menu
Go to deduction menu
then click on ok
Go to Payroll menu---Payroll
give the payroll date
click on ok

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click on ok
Go to Payroll menu--Pay sheet
It will display the payroll pay sheet with earning and deduction
Problem no 1
1. Mr. Akram start business 1000000
2. Purchase 10 computer @10000each from Sara com
3. Sale 8 computer@12000 each for cash
4. Purchase furniture 2000
5. Loan taken 30000
6. Inters on loan taken 3%
7. Company Paid basic salary to his employee Mohd Sameer as a senior accountant at the
same time provide extra facilities like
a) Basic Salary 10000 b)TA 300 c)Pf 150
Balance Sheet: Net Profit: Closing stock:

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WINGS
INTRODUCTION
A wing was introduced by kamlesh Gandhi in the year 21st July 2000 it was business financial software it
deal with financial accounting Receivable or Payable and printing.
Format of ledgers in wings

Under Name
Capital Mr. Khans capital
Capital Drawings
Sundry creditor purchase from the company or person

(Mr. Rahman)
Sundry debtors sales to the company or person

(Mr. Ali)
Fixed asset Purchase for office use, business use or

those items which not have quantity
By default
Purchase A/c
Sales A/c
Cash A/c
Bank A/c
Mod Vat Excise duty
Vat sales tax
Inventories closing stock
Expenses all expenses comes under this group
Incomes all incomes comes under this group
Trading expenses trading goods
Current Assets loan given
Current liability loan taken

Calculation of closing stock
Item Name Purchase Qty Sales Qty Balance Qty/ (*) Purchase Total
Opening Qty Purchase Remaining Qty Price
Sales Return Return
Ctv 10 9 1 7000 7000
Floppy 10 8 2 3500 7000
Total closing stock 14000

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Adjustment Entries in wings:-
1. When closing stock is given in the question:-

Closing stock a/c--------Dr
To trading a/c
2. When Drawings is given in the question:-

Capital a/c-------Dr
To Drawings a/c
3. When closing stock is given in balance sheet (last year)

Opening stock a/c-----Dr
To closing stock a/c
Practical Steps of wings
Creation of company
Click on file new company select standard ok give the company name InfoTech
click on save click on delete key give the company name: InfoTech give the period of the
company: 01-04-2000 to 31-03-2001 click on ok.
Creation of ledger
Click on mastersAccount press delete key give the under group: Capital press enter
then ctrl+N give the ledger name: Mr. Sameers capital press ctrl+S for save press 2 time
tab button same process for all ledgers.
Creation of items
Click on mastersProduct press delete key give the under group: Finished goods press
enter then ctrl+N give the Product name: Color TVs press ctrl+S for save press 2 time
tab button same process for all stock items.
Passing of Journal entries
Go to Entry Cashcash Receipts

cash Payments
Bank Bank Receipts
Bank Payments
Purchases Purchases
Purchase return
Sales Sales
Sales return
Journal Journal entry
Opening Balances

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How to check balance sheet
Go to Reports Balance sheet

Go to Reports profit and loss
Simple Problem: 01
1. Mr. Sameer started business with cash Rs. 400000

2. Purchase furniture Rs. 10000
3. Purchase 10 Color Tv @7000 each for cash
4. Purchase 10 Floppy @3500 each from Sara and company
5. Purchase printer @7000 for private use
6. Deposited cash into state bank of Hyderabad 100000
7. Withdraw cash from bank 40000 for private use
8. Paid salaries Rs1000
9. Paid cash to Sara and company 35000
10. Sold 9 color Tv @7500 each for cash
11. Sold 8 Floppy @4000 each to sohail and company
12. Paid rent 2000
Net Profit: 5500
Simple Problem: 02
1. Mr. Sohail started business with cash 700000

2. Purchase computers 15000
3. Purchase 9 CD @6000 each from Mr. A
4. Purchase 10 Stereo system @9000 each for cash
5. Sold 9 CD @7000 each to Mr. B
6. Sold 9 Stereo system @10000 each for cash
7. Paid advertisement charges 1200
8. Paid Wages 600
9. Received cash from Mr. B 63000
10. Paid cash to Mr. A 54000
11. Paid General expenses 900
Net Profit: 15300
Closing stock: 9000

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Depreciation Problem: 03
1. MR.Walia started business with cash 700000

2. Charge interest on capital 7000
3. Deposited cash in bank 300000
4. Withdrew cash from bank for private use 200000
5. Purchase 7 mobile @10000 each for cash
6. Purchase 8 fans @5000 each to Mr. Parvez
7. Sold 7 mobile @12000 each for cash
8. Sold 7fans @6000 each to Rajesh
9. Received cash from Rajesh 40000
10. Paid cash to Mr. Parvez 20000
11. Bought books 10000 for office use
12. Bought Pens 2000 for office use
13. Bought Tables 5000 for office use
14. Bought Readers 3000 for office use
15. Charge depreciation of fixed assets 5%
16. Paid Electricity bill Rs. 4000
17. Bought chairs @5000 for office use
18. Sold chairs @4000 which was in office use
19. Paid Rent 1000
Net Profit: 7000
Closing stock: 5000
Problem: 04
1. Mr. Kareem started business with cash 800000

3. Bought 15 machinery @15000 each from Bajaj company
4. Sold 10 Machinery @20000 each for cash
5. Sold 4 Machinery @21000 each to Ghouse
6. Bought 100 Vaccume Cleaner @5000 each from Mustafa company
7. Sold 98 Vaccume cleaner @5500 each to Surya company
8. Paid medical expenses for Kareem sons 1000
9. Bought computer @10000 for office use
10. Sold computer @9000 which was in office use
11. Paid advertisement 4000
13. Paid Rent 1000
Balance sheet: 1636000 Net Profit: 112000 Closing stock: 25000

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Sales tax Problem:5
1. Mr. Naseer started business with cash 800000

2. Paid Deposit to Landlord 75000
3. Bought 100 cycles @1200 each from manohar for cash
4. Sold 60 cycles @1500 each to Hitesh for cash and sales tax 10%
5. Sold 40 cycles @1600 each for cash sales tax 10%
6. Purchase furniture worth 2500(domestic use)
7. Loan given to sahil 50000
8. Interest on loan given 5000
9. Loan taken from Finance company 100000
10. Interest on loan taken 8000
11. Paid rent 5000
Net Profit: 23000
Hyders capital 300000 Furniture 10000
Meera & com 50000 Machinery 20000
Onida & com 25000 Computer 20000
Vaccume cleaner 4500
Closing stock 50000

(5 Bpl @10000 each)
Cash 170500
Saguna & com 100000
375000 375000
1. Received cash from saguna @ com 95000

2. Bought 10 Bpl @10000 each from Meera & com
3. Bought 10 Audio system @5000 each from onida com
4. Sold 8 Bpl @12000 each for cash+10% sales tax
5. Sold 9 Audio system @6000 each for cash+10% sales tax
6. Paid cash to Meera & com 145000
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8. Paid rent 2000
9. Paid cash to onida & com 75000
10. Charge depreciation on machinery 10%
11. Charge depreciation on computer 20%
12. Charge depreciation on Vaccume cleaner 10%
13. Charge depreciation on Furniture 5%

Net Profit: 11050
Problem:07
1. Mr. Raheem started business with cash 500000
2. Bought books 5000(for office use)
3. Bought reader 3000(for office use)
4. Purchase 10 washing machine @10000 each for cash
5. Bought 15 coolers @12000 each from sohail
6. Paid carriage on Purchase 500
7. Sold 8 washing machine @12000 each to vinay & com
8. Sold 14 coolers @15000 each to Kiran
9. Deposited 100000 into state bank of Hyderabad
10. Purchase tables 5000 (for office use)
11. Purchase machine 4000
12. Purchase 10 computer @20000 each miss rama on credit
13. Sold 10 computer @25000 each for cash
15. Paid electricity bill 2000
16. Paid telephone bill 800
Net Profit: 102700
Excise duty & Sales tax Problem: 08

1. Mr. Moin started business with cash for Rs. 600000
2. Purchase 10 ac @10000 each for cash
3. Purchase 10 Audio system @7000 each from Rehan & com
4. Sold 10 ac @15000 each to Suraj traders Excise duty3% and sales tax 2%
5. Sold 9 Audio system @10000 each for cash Excise duty3% and sales tax 2%
6. Insurance paid 10000
7. Rent received 20000
Net Profit: 86500
Closing stock 7000

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Mr. Shahnawaz 300000 Cash 160000
Closing stock 50000

5 Bpl @10000 each
330000 330000
1. Bought 30 Bpl @10000 each from Irfan and company

4. Sold 20 Bpl @12000 each to Wahid and company and sales tax 10%
6. Paid to Irfan and company 320000
7. Paid for rent 1000
8. Paid for salaries 2000 by cheque

Net profit 62900
Closing stock 20000
Purchase Return Problem:10
1. Mr. Sumair started business with cash 200000

2. Bought 100 shirts @150 each from Akbar
3. Bought 100 T-shirts @225 each from Ali Hussain
4. Sold 90 Shirts @200 each for cash
5. 4 shirts Return to Akbar @150
7. Paid cash to Akbar 14400
8. Paid Rent 2000
10. Paid cash to Ali Hussain 22500
Net Profit: 7000
Closing stock: 900

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Vat (Value Added Tax)
A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is
added at a stage of production and at final sale. VAT is most often used in the European Union. The
amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the
product that have already been taxed.
There are 2 types of VAT

Input vat and Output Vat
For example, when a television is built by a company in Europe, the manufacturer is charged VAT on all
of the supplies it purchases to produce the television. Once the television reaches the shelf, the
consumer who purchases it must pay the applicable VAT.
Example -2
Purchase goods @ 10000 and paid tax Rs. 1000 next
Sold goods @ 12000 and receive tax Rs. 1200 in both the value added is 2000.
Tax payable= Input vat- Output vat
Problem: 1
1. Mr. Moosa started business with cash for Rs. 500000

2. Purchase 10 ctv @10000 each from Altaf & company and Input vat@4%
3. Purchase 10 ctv @10000 each from Kareem and company and input vat@4%
5. Sold 10 ctv@12000 each for cash output vat@12.5%
6. Sold 10 ctv@13000 each to sohail & company and ouput vat @12.5%

Net Profit: 46500

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Choose the correct answer from the following information.
1. Who introduced Accounts? [ ]

a)Bharat Goenka b)Anand Goenka
c)Luca Pacioli
2. In which year accounts was published? [ ]

a)1956 b)1972
c) 1941
3. Why we are using accounts for? [ ]

a)Education b)Knowledge
c)To maintain business transaction
4. What is assets? [ ]
a) Own property of house b)other s property
c)business property
5. Who is debtor? The person [ ]

a)we have to give money b)we have to receive money
c)none
6. Who is capital? [ ]
a)employee of the company b)customer of the company
c)investor of money
7. What is liability? [ ]
a)we have to pay the amount b)we have to receive the amount
8. What is drawings? [ ]
a)withdraw for office use b)withdraw for domestic use
c)withdraw for personal use
9. In which case bad debts arise? [ ]

a)creditor get losses b)our company get losses
c)debtor get losses
10. What is shares? [ ]

a)the tigers name b)the customers of the company
c)A part of capital
11. What is the other name of current assets? [ ]

a)fixed assets b)Tangible assets
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c)Floating assets
12. What is fixed assets? [ ]

a)which take transaction in 1year b)which take transaction in 6 months
c)which take transaction after 1 year
13. What is the under group of shares in tally when we purchase? [ ]

a)Capital a/c b)current assets
c)fixed assets
14. What is excise duty? [ ]

a)it is a income b)it is a assets
c)it is a liability
15. What is debit? [ ]

a)going aspect b)debtor
c)receiving aspect
16. While preparing the accounts what we have to think? [ ]

a) as a outsider b)as a owner
c) business point of view
17. What is inventory? [ ]

a)to invent something b)which can be use for purchase or sale
c)which is our assets
18. Why the people are using computerized a/c instead of using manual accounts? [ ]
a)to feel good b)to maintain accurate and fast books of a/c
c)to remove manual accounts
19. Who has introduced tally? [ ]

a)luca pacioli b)Abdul Kalam
c) Bharat goenka
20. What is the best field to get the job? [ ]

a) engineering b)accounting
c)marketing
G k questions
1) Who is richest man of India in 2015?

2) Which is the largest country in the world?

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3) Who is the first lady president in India?
4) Which Asian won noble price for the first time?
5) Who is the first lady pilot from Hyderabad?
6) Who is the present king of Saudi Arabia?
7) Who is the first charted accountant of India?
8) Who won the last FIFA world cup?
9) When did A P J Abdul Kalam Azad die?
10) Which company highest revenue in India?
11) Which company owes MS Excel?
12) In which year A P J Abdul Kalam Azad the come president of India?
13) Who is the richest man in the world?
14) Which country has the higher population?
Accounts questions
1) Financial policy in India
2) Revenue expenses=
3) What do you mean by golden rules of accounts
4) What is cash flow and fund flow
5) What are assets? & how many types of assets?
6) How much type of bank A\C holders?
7) What is the meaning of surplus?
8) In cash is received the account cash will be
9) The financial statement that show revenue & expenses
10) Which type of business has individual as an owner
Softwares questions
1) Full form of tally
2) What is tally ERP 9? What are its uses?
3) Calculation of ESI
4) What is the formula of sale tax +excise duty in focus?
5) Is data in ram
6) What is the under group of excise duty in wings software
7) Difference between accounts payable and receivable
8) Difference between current account and saving accounts
9) Why the companies are using different different softwares
10) Who was introduced by wings
Accounts question:-
1. What is balance
2. What is mean by balance sheet
3. What is cash book
4. What is credit note & debit note
5. Called up capital
6. Difference between business / Business man
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7. Import
8. Joint Hindu family
9. In corporation
10. Manufacturing industries
11. Market
12. Difference between private and public company
13. Management
14. Partnership deed
15. Promotion
16. Professional man
17. Public enterprises
18. Risk
19. Vendor & Customer
20. Buyer
21. What is mean by cost centre
22. What is tracking number
23. What is book keeping
24. What are the methods of accounting
25. Define single entry system
26. What is revenue
27. Define floating assets
28. Define the term invoice
29. What do you mean by long term liability
30. What is ledger
31. What do you mean by closing stock
32. What do you mean by interest on capital
33. What do you mean by interest on drawings
34. Define the term depreciation and appreciation
35. Define the term arrears
36. What is fiscal years
37. What is retained earning
38. What is accrued income
39. What is cess
40. To exit without confirmation key in use in tally
41. What is contra entry
42. What is function key of journal in tally
43. Which function key is used to change the date
44. Which key is used to get the calculator in tally
45. Which is the function key to create a company
46. Short cut key for bank reconciliation is
47. Which is the short cut key for purchase order
48. What is intermediary product 50.Difference between travelling and conveyance

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INFOTECH

COMPUTER EDUCATION & TUTORIALS

SUBJECT: BASIC ACCOUNTING

Name of the student: ________________________

Phone number: ________________

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 1

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5. DEBIT: - The receiving aspect is known as Debit.

6. CREDIT:-The Giving aspect is known as Credit.

Example:-Plant & machinery, Furniture, computer, land & building etc.

Example:-Patents, copy right, Goodwill etc.

Example:-Cash, debtors, stock items etc.

Example:-Loan taken, Bank Over Draft, creditor, debts etc.

Example:-Bills Payable, Creditors, Outstanding Expenses, Bank Overdraft etc.

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 4

13. Appreciation:-Increase in the value of assets is called Appreciation.

Classification of Accounts, types of accounts, golden rules of accounts, principles of accounts

A. Natural Person:-example-Ahmed A/c, Siraj A/c, Ravi A/c etc.

B. Artificial Person:-example-Bank A/c, Institutions A/c etc.

C. Representative Person:-example-Outstanding salaries, Rent receivable etc.

RULE: Debit: The Receiver

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 5

a) Expenses:-example-Paid salaries, wages, Purchases etc.

RULE:- Debit All Expenses and Losses

b. To ascertain results of business operations: To measure the financial performance of the

d. To generate and communicate information to users: Accounting communicates information to

b. Classifying: It deals with classification of recorded transactions so as to group similar

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 6

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(ii) To compliance with the provision of law.

(iii) Charging of small capital items, like crockery to revenue.

(v) Not providing for discount on creditors.

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(a) Contingent liability appearing as a note.

(b) Market value of investments appearing as a note.

ACCOUNTING CYCLE OF MANUAL ACCOUNTS

STEPS INVOLVED IN MANUAL CYCLE

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 11

DATE PARTICULARS L.F DEBIT CREDIT

Explanation of the entries:

Date Account Nature of Explanation Debit/

2014 Cash a/c Real a/c Cash is coming Debit

Jan 2 Purchases a/c Nominal a/c Purchases is an Expenses Debit

Jan 3 Carriage a/c Nominal a/c Carriage is an Expenses Debit

Jan 4 Purchases a/c Nominal a/c Purchases is an Expenses Debit

Jan 5 Cash a/c Real a/c Cash is coming Debit

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 12

Jan 6 Sameera a/c Personal a/c Sameera is receiver Debit

Jan 7 Salaries a/c Nominal a/c Salaries is an Expenses Debit

Jan 8 Rent a/c Nominal a/c Rent is an Expenses Debit

014. Cash a/c-------------------------------- --------- Dr 3,00,000

Purchases a/c ---------------------------------------- Dr 1,00,000

Carriage a/c ----------------------------------------- Dr 2,00

Purchases a/c -------------------------------------- Dr 1,00,000

Cash a/c ---------------------------------------------- Dr 1,20,000

Rent a/c ------------------------------------------ Dr 1000

INFOTECH COMPUTER EDUCATION & TUTORIALS Page 13

Date Particulars J.f Amount Date Particulars J.f Amount

1 To Mr. Khan a/c 3,00,000 2 By purchases a/c 1,00,000

5 To sales a/c 1,20,000 3 By carriage a/c 200

7 By salaries a/c 2,000