Easy2Siksha.com
GNDU Question Paper 2022
B.B.A 2
nd
Semester
Paper-BBA-206: Computer Based Accounting System
Time Allowed: 3 Hours Maximum Marks:50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. Write note on Hierarchy of accounts and codification in Accounting.
2. Define Computerized Accounting. Write down the various advantages and limitations of
Computerized Accounting.
SECTION-B
3. What is data ? Explain in detail the various types of data. Differentiate between data
and Information.
4. Define SQL. Explain in detail the various Features provided by SQL.
SECTION-C
5. What do you mean by Financial Accounting Packages ? Explain the various features
provided by the Tally ERP 9.0.
6. Explain the phases of implementation and aids of implementation in Tally ERP 9.0.
Easy2Siksha.com
SECTION-D
7. Discuss with an example Preparation and compilation of complete balance sheet for a
firm.
8. Write note on Accounts Masters and Account Reports.
GNDU Answer Paper 2022
B.B.A 2
nd
Semester
Paper-BBA-206: Computer Based Accounting System
Time Allowed: 3 Hours Maximum Marks:50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. Write note on Hierarchy of accounts and codification in Accounting.
Ans: Hierarchy of Accounts and Codification in Accounting
Accounting is often described as the language of business because it records, classifies, and
summarizes financial transactions. In modern organizations, thousands of transactions occur
every day—sales, purchases, expenses, salaries, taxes, and many more. To manage this huge
amount of financial data efficiently, accountants use two important concepts: Hierarchy of
Accounts and Codification.
These concepts help in organizing financial information systematically so that it becomes
easy to record, locate, analyze, and report financial data.
1. Hierarchy of Accounts in Accounting
Easy2Siksha.com
The Hierarchy of Accounts refers to the structured arrangement of accounts from broad
categories to specific accounts. It is like a family tree where the main category is divided
into smaller groups and then further into detailed accounts.
In accounting, all accounts are organized in levels so that financial information can be
grouped logically.
Simple Idea
Think of a shopping mall.
• The mall is divided into sections (clothing, electronics, food).
• Each section has subsections (men’s clothing, women’s clothing).
• Each subsection contains individual items (shirts, jackets, jeans).
Similarly, accounting organizes financial data step-by-step.
Levels of Hierarchy in Accounting
Generally, the hierarchy of accounts is organized into the following levels:
1. Main Category
2. Group
3. Sub-Group
4. Individual Ledger Account
Diagram of Hierarchy of Accounts
Example of Hierarchy
Let us understand it with a practical example.
Easy2Siksha.com
Level 1 – Main Category
Assets
Level 2 – Group
Current Assets
Level 3 – Sub-Group
Cash and Bank
Level 4 – Individual Account
• Cash in Hand
• Bank Account
So the hierarchy becomes:
Assets → Current Assets → Cash & Bank → Cash Account
This structured system helps accountants quickly understand where a particular transaction
belongs.
Importance of Hierarchy of Accounts
1. Easy Organization of Financial Data
When accounts are arranged hierarchically, it becomes easier to organize and classify
transactions properly.
2. Better Financial Reporting
Financial statements like Balance Sheet and Profit & Loss Account depend on grouping
accounts. Hierarchy ensures that data is properly summarized.
3. Easy Data Analysis
Managers can easily analyze expenses, income, assets, or liabilities when accounts are
arranged systematically.
4. Useful for Large Businesses
In large companies there may be thousands of accounts. Hierarchy helps maintain control
and avoid confusion.
Easy2Siksha.com
5. Helps in Computerized Accounting
Modern accounting software like Tally, SAP, and ERP systems rely heavily on hierarchical
structures to manage financial data efficiently.
2. Codification in Accounting
While hierarchy organizes accounts, codification assigns a unique code number or symbol
to each account.
In simple words:
Codification means giving a specific code to each account so it can be easily identified and
recorded.
Instead of writing long account names repeatedly, accountants use codes.
Simple Example
Account Name
Code
Cash Account
101
Bank Account
102
Sales Account
201
Salary Expense
301
Now instead of writing Salary Expense, the accountant may simply record 301.
This makes recording transactions faster and more accurate.
Diagram of Codification System
Chart of Accounts
│
│
Account Codes
│
┌──────┼─────────┐
│ │ │
100 200 300
Assets Revenue Expenses
│ │ │
101 201 301
Easy2Siksha.com
Cash Sales Salary
102 202 302
Bank Service Rent
Types of Codification Methods
Different organizations use different coding systems.
1. Numeric Codes
Accounts are represented using numbers.
Example:
• 1000 – Assets
• 1100 – Current Assets
• 1110 – Cash
This is the most common method.
2. Alphabetic Codes
Accounts are represented using letters.
Example:
• C – Cash
• S – Sales
• P – Purchases
This system is simple but less flexible.
3. Alphanumeric Codes
This method uses both letters and numbers.
Example:
• A101 – Cash
• A102 – Bank
• E201 – Salary Expense
Many modern systems use this method because it allows more combinations.
Easy2Siksha.com
Advantages of Codification
1. Saves Time
Codes are shorter than account names, so recording transactions becomes faster.
2. Reduces Errors
Codes reduce spelling mistakes and confusion between similar account names.
3. Easy Data Processing
Computerized accounting systems process codes much more efficiently.
4. Quick Identification
Accountants can quickly identify accounts using codes.
5. Better Internal Control
Management can track and control financial data more effectively.
Relationship Between Hierarchy and Codification
Hierarchy and codification work together in accounting systems.
Hierarchy organizes accounts logically, while codification assigns codes according to that
structure.
Example
Hierarchy Level
Account
Code
Assets
Current Assets
1000
Sub Group
Cash & Bank
1100
Account
Cash
1110
Account
Bank
1120
So the hierarchy becomes clear and structured, and the code tells exactly where the
account belongs.
Conclusion
Easy2Siksha.com
The Hierarchy of Accounts and Codification are essential tools in modern accounting
systems. Hierarchy helps in arranging accounts from broad categories to detailed accounts,
making financial information organized and easy to understand. Codification complements
this system by assigning unique codes to each account, which simplifies recording and
processing transactions.
Together, these concepts make accounting efficient, systematic, and suitable for
computerized systems. In small businesses, the hierarchy may be simple with only a few
accounts, but in large organizations, it becomes highly detailed to manage thousands of
financial transactions effectively.
Thus, hierarchy provides the structure, and codification provides the identification system.
Both are crucial for accurate accounting, efficient data management, and reliable financial
reporting.
2. Define Computerized Accounting. Write down the various advantages and limitations of
Computerized Accounting.
Ans: Introduction
Accounting is the language of business—it records, classifies, and summarizes financial
transactions to provide useful information for decision-making. Traditionally, accounting
was done manually, with ledgers, journals, and registers maintained by hand. But with the
advancement of technology, accounting has become computerized, making the process
faster, more accurate, and more efficient.
Computerized Accounting refers to the use of computers and accounting software to
record, store, and analyze financial data. Instead of paper-based ledgers, transactions are
entered into software systems that automatically update accounts, generate reports, and
ensure accuracy.
In this explanation, we will define computerized accounting, explore its advantages, discuss
its limitations, and reflect on its overall significance.
Definition of Computerized Accounting
Computerized accounting is the process of maintaining financial records using computer
systems and specialized software. It involves:
• Recording transactions electronically.
• Automatically updating ledgers and accounts.
• Generating financial statements like balance sheets, profit and loss accounts, and
cash flow statements.
• Using databases to store and retrieve information quickly.
Easy2Siksha.com
In simple words: Computerized accounting is accounting done with the help of computers
instead of pen and paper.
Advantages of Computerized Accounting
Computerized accounting has transformed the way businesses manage their finances. Its
advantages include:
1. Speed and Efficiency
• Transactions can be recorded instantly.
• Reports can be generated within seconds.
• Saves time compared to manual bookkeeping.
2. Accuracy
• Reduces human errors in calculations.
• Automatic posting ensures consistency.
• Built-in checks prevent mistakes.
3. Real-Time Information
• Provides up-to-date financial data.
• Managers can make timely decisions based on current information.
4. Easy Data Storage and Retrieval
• Large volumes of data can be stored electronically.
• Information can be retrieved quickly with search functions.
5. Cost-Effective in the Long Run
• Reduces the need for large accounting staff.
• Saves money on paper, printing, and storage.
6. Security
• Data can be protected with passwords and encryption.
• Backups prevent loss of information.
7. Flexibility and Scalability
• Software can be customized to suit business needs.
• Systems can handle growth in transactions as the business expands.
8. Integration with Other Systems
• Can be linked with inventory management, payroll, and banking systems.
Easy2Siksha.com
• Provides a holistic view of business operations.
9. Compliance and Standardization
• Software is often designed to comply with accounting standards and tax regulations.
• Ensures uniformity in records.
10. Analytical Tools
• Provides charts, graphs, and ratios for analysis.
• Helps in forecasting and budgeting.
Limitations of Computerized Accounting
Despite its many advantages, computerized accounting also has limitations:
1. High Initial Cost
• Purchasing software and hardware requires significant investment.
• Small businesses may find it expensive.
2. Training Requirements
• Staff must be trained to use the software.
• Lack of training can lead to errors.
3. Dependence on Technology
• System failures, viruses, or cyberattacks can disrupt operations.
• Overdependence on computers may be risky.
4. Data Security Concerns
• Sensitive financial data may be vulnerable to hacking.
• Requires strong cybersecurity measures.
5. Obsolescence
• Software may become outdated quickly.
• Regular updates and upgrades are necessary.
6. Loss of Human Judgment
• Computers process data mechanically.
• They cannot replace human judgment in interpreting financial information.
7. Risk of Over-Reliance
Easy2Siksha.com
• Managers may rely too heavily on automated reports.
• May overlook qualitative factors not captured in numbers.
8. Technical Issues
• Power failures, hardware breakdowns, or software bugs can halt accounting
processes.
9. Customization Challenges
• Some software may not fit the unique needs of a business.
• Customization can be costly.
10. Legal and Ethical Issues
• If data is mishandled, it can lead to legal problems.
• Ethical concerns arise if information is manipulated.
Comparative View: Manual vs Computerized Accounting
Aspect
Manual Accounting
Computerized Accounting
Speed
Slow, time-consuming
Fast, efficient
Accuracy
Prone to human error
High accuracy
Storage
Physical ledgers, bulky
Digital, compact
Cost
Low initial cost
High initial cost
Security
Vulnerable to physical damage
Protected with encryption and backups
Analysis
Limited
Advanced tools available
Flexibility
Difficult to adapt
Highly flexible
Practical Examples
1. Small Business: A shopkeeper using Tally software can record daily sales and
expenses, generate profit reports, and file tax returns easily.
2. Large Corporation: A multinational company using SAP or Oracle accounting systems
integrates financial data across countries, ensuring compliance and efficiency.
3. Government: Public sector organizations use computerized accounting to manage
budgets, track expenditures, and ensure transparency.
Significance of Computerized Accounting
• For Businesses: Provides reliable financial information for decision-making.
• For Investors: Ensures transparency and builds trust.
• For Governments: Facilitates tax collection and compliance.
• For Society: Promotes efficiency and accountability in economic activities.
Conclusion
Easy2Siksha.com
Computerized accounting is the modern way of managing financial records using computers
and software. It offers numerous advantages such as speed, accuracy, real-time
information, and integration with other systems. However, it also has limitations like high
initial costs, dependence on technology, and data security concerns.
SECTION-B
3. What is data ? Explain in detail the various types of data. Differentiate between data
and Information.
Ans: 3. What is Data? Explain the Various Types of Data. Differentiate Between Data and
Information
In today’s digital world, the words data and information are used very frequently. Every
time we use a mobile phone, search on the internet, fill out a form, or make a purchase
online, data is being created and processed. Understanding what data is and how it is
converted into useful information is very important, especially for students studying
computers or information systems.
Meaning of Data
Data refers to raw facts, figures, symbols, or observations that have not yet been
processed or organized. These facts by themselves do not provide any clear meaning until
they are analyzed or interpreted.
In simple words:
Data = Unprocessed facts
Data can be in many forms such as numbers, text, images, sounds, or symbols.
Examples of Data
• Student marks: 45, 67, 82, 90
• Names: Rohit, Aman, Neha
• Temperature readings: 32°C, 34°C, 35°C
• Sales numbers: 150, 200, 180
When we see these numbers alone, they do not clearly explain anything. They are simply
pieces of raw facts.
For example:
Easy2Siksha.com
Raw Data
45
67
82
90
These numbers are just data. We do not know whose marks they are or which subject they
belong to.
But if we organize them like this:
Student
Subject
Marks
Rohit
Math
45
Aman
Math
67
Neha
Math
82
Now it starts making sense. This organized result becomes information.
Diagram: Relationship Between Data and Information
Raw Facts (Data)
↓
Processing / Organizing / Analyzing
↓
Meaningful Result (Information)
Example:
Data → 45, 67, 82, 90
Processing → Arrange marks with student names
Information → Rohit scored 45, Aman scored 67, etc.
Types of Data
Data can be classified in different ways depending on its nature, source, and format. The
most common types of data are explained below.
1. Qualitative Data
Qualitative data describes qualities or characteristics that cannot be measured with
numbers.
Easy2Siksha.com
It is usually expressed using words or descriptions.
Examples
• Gender (Male/Female)
• Eye color
• Product quality (Good, Average, Poor)
• Customer satisfaction
• Feedback comments
Example:
Customer
Feedback
A
Good service
B
Very slow delivery
C
Excellent product
This type of data describes opinions or qualities rather than numbers.
Key Features
• Descriptive in nature
• Non-numerical
• Often collected through surveys, interviews, or observations
2. Quantitative Data
Quantitative data refers to data that can be measured and expressed in numbers.
This type of data is very common in science, mathematics, and statistics.
Examples
• Age: 21 years
• Height: 170 cm
• Temperature: 32°C
• Salary: ₹30,000
• Number of students: 45
Example:
Student
Age
Rahul
20
Priya
21
Aman
22
Easy2Siksha.com
Since this data is numerical, it can be easily analyzed using calculations and graphs.
Quantitative Data Types
Quantitative data is further divided into two types.
(a) Discrete Data
Discrete data consists of whole numbers that cannot be divided into fractions.
It usually represents countable values.
Examples
• Number of students in a class
• Number of cars in a parking lot
• Number of books in a library
Example:
Class
Number of Students
A
35
B
40
C
32
You cannot have 35.5 students, so this data is discrete.
(b) Continuous Data
Continuous data can take any value within a range, including decimals.
It usually represents measurements.
Examples
• Height: 170.5 cm
• Weight: 65.7 kg
• Temperature: 36.8°C
• Time: 2.5 hours
Example:
Person
Weight
A
65.5 kg
Easy2Siksha.com
B
72.3 kg
C
68.8 kg
This data can include fractions and decimals, so it is continuous.
3. Primary Data
Primary data is the data that is collected directly by a person or organization for the first
time.
It is original and first-hand data.
Methods of Collecting Primary Data
• Surveys
• Interviews
• Questionnaires
• Observations
• Experiments
Example
A company conducts a customer satisfaction survey to understand how people feel about
their product.
The responses collected from customers are primary data.
Advantages
• Highly accurate
• Specific to the research purpose
• Reliable
Disadvantages
• Time consuming
• Expensive to collect
4. Secondary Data
Secondary data is data that has already been collected and published by someone else.
Researchers simply use existing data sources.
Easy2Siksha.com
Sources of Secondary Data
• Government reports
• Census data
• Books and journals
• Websites
• Research papers
Example
If a student studies India's population using census reports, the data used is secondary
data.
Advantages
• Saves time
• Low cost
• Easily available
Disadvantages
• May not be fully accurate
• May not match the exact research purpose
Difference Between Data and Information
Although data and information are related, they are not the same. The difference between
them is explained below.
Basis
Data
Information
Meaning
Raw facts and figures
Processed and meaningful data
Nature
Unorganized
Organized
Usefulness
Limited usefulness
Helps in decision making
Example
75, 82, 90
Rohit scored 90 marks in Maths
Processing
Not processed
Processed and analyzed
Simple Example to Understand the Difference
Imagine a teacher collecting marks of students.
Step 1: Raw Data
45, 67, 82, 90
This is data because it does not explain anything.
Easy2Siksha.com
Step 2: Organized Information
Student
Marks
Rahul
45
Aman
67
Neha
82
Priya
90
Now we understand who scored what. This is information.
Diagram: Data Processing Cycle
Data Collection
↓
Data Processing
↓
Information Generation
↓
Decision Making
Example:
Sales Data → Monthly Report → Business Decisions
Conclusion
Data is the foundation of information. It consists of raw facts and figures that do not carry
clear meaning until they are processed and organized. Once data is analyzed, it becomes
information, which helps people understand situations and make better decisions.
Data can exist in many forms such as qualitative, quantitative, discrete, continuous,
primary, and secondary data. Each type serves a different purpose depending on how the
data is collected and used.
In simple terms:
Data is the raw material, while information is the finished product.
Just like raw ingredients are used to cook a meal, data is processed to create meaningful
information that can guide actions, planning, and decision-making in fields like business,
science, education, and technology.
Easy2Siksha.com
4. Define SQL. Explain in detail the various Features provided by SQL.
Ans: Introduction
In the world of databases, SQL (Structured Query Language) is the universal language used
to communicate with relational database systems. It allows users to store, manipulate, and
retrieve data efficiently. Whether you are a student learning databases, a developer building
applications, or a business analyst working with large datasets, SQL is the backbone of
modern data management.
In this explanation, we will first define SQL, then explore in detail the features provided by
SQL, and finally reflect on its significance. The goal is to make the concepts clear, engaging,
and easy to understand.
Definition of SQL
SQL (Structured Query Language) is a standardized programming language used to manage
and manipulate relational databases. It was developed in the 1970s by IBM and later
adopted as a standard by ANSI (American National Standards Institute) and ISO
(International Organization for Standardization).
SQL allows users to:
• Create and modify database structures.
• Insert, update, and delete records.
• Retrieve data using queries.
• Control access and security.
In simple words: SQL is the language that helps us talk to databases.
Features of SQL
SQL provides a wide range of features that make it powerful and versatile. Let’s explore
them one by one.
1. Data Definition Language (DDL)
SQL provides commands to define and manage the structure of databases.
• CREATE: To create databases, tables, views, etc.
• ALTER: To modify existing structures.
• DROP: To delete databases or tables.
Example:
sql
CREATE TABLE Students (
StudentID INT PRIMARY KEY,
Easy2Siksha.com
Name VARCHAR(50),
Age INT
);
This feature ensures that users can design and organize data structures easily.
2. Data Manipulation Language (DML)
SQL allows users to manipulate data stored in tables.
• INSERT: Add new records.
• UPDATE: Modify existing records.
• DELETE: Remove records.
Example:
sql
INSERT INTO Students (StudentID, Name, Age)
VALUES (1, 'Ravi', 20);
This feature makes SQL practical for day-to-day operations like adding or updating student
records.
3. Data Query Language (DQL)
The most powerful feature of SQL is its ability to query data.
• SELECT: Retrieve data from one or more tables.
Example:
sql
SELECT Name, Age FROM Students WHERE Age > 18;
This feature allows users to filter, sort, and analyze data quickly.
4. Data Control Language (DCL)
SQL provides commands to control access to data.
• GRANT: Give permissions to users.
• REVOKE: Remove permissions.
This ensures data security and prevents unauthorized access.
5. Transaction Control Language (TCL)
SQL supports transactions to ensure data integrity.
Easy2Siksha.com
• COMMIT: Save changes permanently.
• ROLLBACK: Undo changes if something goes wrong.
• SAVEPOINT: Mark a point in a transaction to roll back to.
This feature is crucial in banking systems where accuracy is vital.
6. Portability and Standardization
SQL is standardized by ANSI and ISO, meaning it works across different database systems
(like Oracle, MySQL, SQL Server, PostgreSQL) with minor variations.
This makes SQL a universal language for relational databases.
7. User-Friendly Syntax
SQL uses English-like commands, making it easy to learn and use.
• Example: SELECT * FROM Students; is simple and intuitive.
This feature makes SQL accessible even to non-programmers.
8. Support for Functions and Expressions
SQL provides built-in functions for calculations, string manipulation, and date handling.
• Aggregate Functions: SUM, AVG, COUNT, MAX, MIN.
• String Functions: CONCAT, LENGTH, SUBSTRING.
• Date Functions: NOW, DATEADD, DATEDIFF.
Example:
SELECT AVG(Age) FROM Students;
This feature enhances analytical capabilities.
9. Data Integrity and Constraints
SQL allows defining rules to maintain data accuracy.
• PRIMARY KEY: Ensures uniqueness.
• FOREIGN KEY: Maintains relationships between tables.
• NOT NULL: Prevents missing values.
• CHECK: Ensures conditions are met.
Example:
sql
CREATE TABLE Orders (
Easy2Siksha.com
OrderID INT PRIMARY KEY,
Quantity INT CHECK (Quantity > 0)
);
This feature ensures reliable and consistent data.
10. Views
SQL allows creating views, which are virtual tables based on queries.
• Simplifies complex queries.
• Provides security by restricting access to certain columns.
Example:
sql
CREATE VIEW AdultStudents AS
SELECT Name, Age FROM Students WHERE Age >= 18;
11. Joins and Relationships
SQL supports combining data from multiple tables using joins.
• INNER JOIN: Matches records in both tables.
• LEFT JOIN: Includes all records from the left table.
• RIGHT JOIN: Includes all records from the right table.
• FULL JOIN: Includes all records from both tables.
Example:
sql
SELECT Students.Name, Orders.Quantity
FROM Students
INNER JOIN Orders ON Students.StudentID = Orders.StudentID;
This feature makes SQL powerful for relational data analysis.
12. Scalability and Performance
SQL can handle large volumes of data efficiently.
• Indexes improve query speed.
• Optimizers ensure efficient execution.
This feature makes SQL suitable for both small businesses and large corporations.
13. Security Features
SQL provides mechanisms to protect data.
Easy2Siksha.com
• User authentication.
• Role-based access control.
• Encryption support in modern systems.
This ensures sensitive data like financial records remain secure.
14. Extensibility
Modern SQL systems support extensions like:
• Stored procedures.
• Triggers.
• Integration with programming languages (Python, Java, etc.).
This makes SQL adaptable to complex business needs.
Significance of SQL
• Universal Language: Works across multiple database systems.
• Foundation of Data Science: Essential for querying and analyzing data.
• Business Applications: Used in finance, healthcare, education, e-commerce, and
more.
• Decision-Making: Provides accurate and timely information for managers.
Conclusion
SQL, or Structured Query Language, is the backbone of relational database management. It
provides features like data definition, manipulation, querying, control, transactions,
integrity constraints, joins, views, and security. Its user-friendly syntax, portability, and
scalability make it indispensable in modern computing.
SECTION-C
5. What do you mean by Financial Accounting Packages ? Explain the various features
provided by the Tally ERP 9.0.
Ans: Financial Accounting Packages and Features of Tally ERP 9.0
1. Introduction
In today’s modern business world, almost every organization uses computers to manage its
financial activities. Earlier, businesses used to maintain their accounts manually in large
books called ledgers and journals. This process was time-consuming, complicated, and
prone to human errors. To solve these problems, Financial Accounting Packages were
Easy2Siksha.com
developed. These software programs help businesses maintain their financial records
quickly, accurately, and efficiently.
One of the most popular accounting software used in India is Tally ERP 9.0. It is widely used
by businesses, accountants, and organizations to manage accounts, inventory, taxation,
payroll, and many other financial activities.
To understand this topic clearly, we will first discuss the meaning of financial accounting
packages and then explain the major features of Tally ERP 9.0.
Meaning of Financial Accounting Packages
A Financial Accounting Package is a computer software program designed to record,
process, and manage financial transactions of a business automatically.
In simple words, it is a software that helps businesses maintain accounts digitally instead
of using manual accounting books.
These packages allow companies to perform tasks such as:
• Recording financial transactions
• Maintaining ledgers and journals
• Preparing financial statements
• Managing taxes
• Handling payroll and inventory
All these activities are done automatically by the software once the data is entered.
Simple Concept Diagram
Business Transactions
↓
Data Entry in Accounting Software
↓
Processing of Data
↓
Ledgers & Accounts Created
↓
Reports Generated
(Balance Sheet, Profit & Loss, etc.)
This shows how a financial accounting package converts business transactions into useful
financial reports.
Easy2Siksha.com
Examples of Financial Accounting Packages
Some commonly used accounting software are:
• Tally ERP 9
• Busy Accounting Software
• QuickBooks
• Zoho Books
• Marg ERP
Among these, Tally ERP 9 is one of the most widely used accounting packages in India.
Tally ERP 9.0
Tally ERP 9 is an accounting software developed by Tally Solutions Pvt. Ltd. It is designed to
help businesses manage their financial accounting, inventory, taxation, and payroll
efficiently.
The word ERP stands for Enterprise Resource Planning, which means the software
integrates different business operations into one system.
Tally ERP 9 is popular because it is:
• Easy to use
• Fast in processing
• Accurate
• Suitable for small as well as large businesses
Basic Working of Tally ERP 9
Create Company
↓
Create Ledgers
↓
Enter Vouchers
↓
Transactions Recorded
↓
Reports Generated
Once transactions are entered, Tally automatically prepares reports such as:
Easy2Siksha.com
• Balance Sheet
• Profit and Loss Account
• Trial Balance
Features of Tally ERP 9
Tally ERP 9 provides many useful features that make accounting simple and efficient.
1. Accounting Management
The main feature of Tally ERP 9 is its accounting management system.
It helps businesses maintain:
• Journals
• Ledgers
• Cash books
• Bank books
Every financial transaction such as sales, purchases, payments, and receipts can be
recorded easily.
Once the transaction is entered, Tally automatically updates all related accounts.
For example:
If a company records a sale, Tally will automatically update:
• Sales account
• Customer account
• Profit calculation
This reduces manual work and errors.
2. Inventory Management
Tally ERP 9 also provides inventory management, which helps businesses track their goods
and stock.
Businesses can manage:
• Stock items
Easy2Siksha.com
• Stock groups
• Units of measurement
• Warehouses
For example:
A shopkeeper can easily check:
• How many products are available in stock
• Which items are selling fast
• When new stock needs to be ordered
This helps in better stock control.
3. Payroll Management
Tally ERP 9 includes a payroll management system for employees.
This feature helps companies manage:
• Employee records
• Salaries
• Bonuses
• Deductions
• Attendance
The software automatically calculates salaries and generates salary slips for employees.
This reduces the workload of the HR department.
4. Taxation Management
Another important feature of Tally ERP 9 is tax management.
It helps businesses manage different taxes such as:
• GST (Goods and Services Tax)
• VAT
• TDS (Tax Deducted at Source)
• Service Tax
Tally automatically calculates taxes while recording transactions and prepares tax reports.
This helps businesses file taxes easily and accurately.
Easy2Siksha.com
5. Financial Reporting
Tally ERP 9 can generate various financial reports instantly.
Some important reports include:
• Balance Sheet
• Profit and Loss Account
• Trial Balance
• Cash Flow Statement
• Stock Reports
These reports help business owners understand the financial condition of their company.
6. Multi-User Capability
Tally ERP 9 supports multiple users working at the same time.
This means different employees can work on the same data simultaneously.
For example:
• The accountant can enter transactions
• The manager can view reports
• The storekeeper can check inventory
This improves efficiency in organizations.
7. Data Security
Tally ERP 9 provides strong data security features.
Important information is protected using:
• User IDs
• Passwords
• Access control
The administrator can decide which user can access which part of the system.
This keeps financial data safe from unauthorized access.
Easy2Siksha.com
8. Backup and Data Recovery
Another useful feature is data backup and recovery.
Businesses can easily create backups of their accounting data.
If the system crashes or data is lost, the backup can be restored quickly.
This ensures that important financial information is not lost.
9. Multi-Currency Support
Tally ERP 9 supports multiple currencies.
This feature is useful for businesses that deal with international customers.
Transactions can be recorded in foreign currencies and automatically converted into local
currency.
10. Remote Access
Tally ERP 9 allows users to access their accounting data from remote locations.
For example:
A business owner can check company accounts from another city or country using the
internet.
This provides flexibility and convenience.
Advantages of Tally ERP 9
Some major advantages include:
• Easy to learn and use
• Fast processing of transactions
• Accurate financial calculations
• Automatic report generation
• Better financial control
• Suitable for businesses of all sizes
Easy2Siksha.com
Because of these advantages, Tally ERP 9 is widely used by accountants, businesses, and
organizations across India.
Conclusion
A Financial Accounting Package is a computer software that helps businesses manage and
record their financial transactions electronically. It replaces the traditional manual
accounting system and makes accounting faster, more accurate, and more efficient.
Among various accounting software available today, Tally ERP 9 is one of the most popular
and widely used programs. It provides many useful features such as accounting
management, inventory control, payroll management, taxation handling, financial reporting,
multi-user access, data security, and backup facilities.
By using Tally ERP 9, businesses can manage their financial information easily and make
better financial decisions. Therefore, financial accounting packages like Tally ERP 9 play a
very important role in modern business management.
6. Explain the phases of implementation and aids of implementation in Tally ERP 9.0.
Ans: Introduction
Tally ERP 9.0 is one of the most widely used accounting and business management software
in India and across the world. It helps organizations manage accounts, inventory, payroll,
taxation, and compliance in a streamlined manner. However, simply installing Tally ERP 9.0
is not enough—its implementation is a structured process that ensures the software is
customized and aligned with the organization’s needs.
Implementation in Tally ERP 9.0 involves phases (step-by-step stages to introduce the
system) and aids (tools and supports that make implementation smoother). Understanding
these phases and aids is crucial for students and professionals because it shows how theory
translates into practice.
Phases of Implementation in Tally ERP 9.0
Implementation is not a one-day activity. It is a systematic process that ensures the
software is successfully adopted. The major phases are:
1. Planning Phase
• This is the foundation stage.
• The organization identifies its requirements: accounting, inventory, payroll, taxation,
etc.
Easy2Siksha.com
• Goals are set: whether the focus is on financial accounting, GST compliance, or
integrated business management.
• A project plan is prepared, including timelines and responsibilities.
Example: A manufacturing company decides it wants Tally ERP 9.0 to handle accounts,
inventory, and GST filing. The planning phase outlines these needs clearly.
2. System Design Phase
• The software is customized according to organizational requirements.
• Chart of accounts, groups, ledgers, and vouchers are designed.
• Inventory classifications, payroll structures, and tax configurations are set up.
Example: The company designs ledgers for raw materials, finished goods, salaries, and GST.
3. Data Migration Phase
• Existing data from manual records or old software is transferred into Tally ERP 9.0.
• Opening balances, stock details, outstanding receivables, and payables are entered.
• Accuracy is checked to ensure smooth transition.
Example: The company enters opening balances of suppliers and customers into Tally ERP
9.0.
4. Configuration and Customization Phase
• Tally ERP 9.0 is configured to suit the organization’s workflow.
• Features like security controls, user roles, and reporting formats are customized.
• Add-ons or modules may be integrated.
Example: The company configures user roles—accountant can enter vouchers, manager can
approve, and auditor can view reports.
5. Training Phase
• Employees are trained to use Tally ERP 9.0.
• Training covers voucher entry, report generation, GST filing, and payroll processing.
• Hands-on practice ensures confidence.
Example: Accountants practice entering purchase and sales vouchers, while HR staff learn
payroll processing.
6. Testing Phase
• Trial runs are conducted to check accuracy.
• Sample transactions are entered, and reports are generated.
• Errors are identified and corrected.
Easy2Siksha.com
Example: The company tests by entering a sales invoice and checking if GST is calculated
correctly.
7. Go-Live Phase
• The system is officially launched for daily use.
• Real transactions are entered, and reports are generated.
• Support is provided to resolve initial issues.
Example: From April 1, the company starts recording all transactions in Tally ERP 9.0.
8. Post-Implementation Support Phase
• Continuous monitoring ensures smooth functioning.
• Updates and upgrades are applied.
• Feedback is collected for improvements.
Example: The company updates Tally ERP 9.0 when new GST rules are introduced.
Aids of Implementation in Tally ERP 9.0
To make implementation successful, Tally ERP 9.0 provides several aids:
1. Tally Audit and Compliance Tools
• Helps auditors verify transactions.
• Ensures compliance with taxation laws like GST, TDS, and VAT.
2. Security and User Management
• Provides password protection and user roles.
• Ensures data security and prevents unauthorized access.
3. Data Backup and Restore
• Allows regular backups to prevent data loss.
• Restore feature ensures recovery in case of system failure.
4. Remote Access
• Enables users to access Tally ERP 9.0 from different locations.
• Useful for businesses with multiple branches.
5. Customization Tools
• Tally allows customization through Tally Definition Language (TDL).
• Reports, vouchers, and modules can be tailored to organizational needs.
Easy2Siksha.com
6. Integration Features
• Tally ERP 9.0 integrates with other systems like Excel, payroll software, and banking
portals.
• Facilitates smooth data flow.
7. Help and Support Resources
• Built-in help menus guide users.
• Online support and community forums provide solutions.
8. Reporting Tools
• Provides instant reports like balance sheet, profit and loss, stock summary, and GST
returns.
• Helps management make informed decisions.
Significance of Phases and Aids
• Phases ensure systematic adoption: Without phases, implementation may fail due
to confusion or errors.
• Aids ensure smooth functioning: Tools like backup, security, and reporting make
daily operations reliable.
• Together, they ensure that Tally ERP 9.0 is not just installed but effectively used.
Illustrative Example
Imagine a retail chain implementing Tally ERP 9.0:
• Planning: Decide to manage accounts, inventory, and GST.
• System Design: Create ledgers for suppliers, customers, and stock items.
• Data Migration: Enter opening balances and stock details.
• Configuration: Set up user roles for cashiers, accountants, and managers.
• Training: Train staff to enter sales vouchers and generate GST reports.
• Testing: Run trial transactions to check accuracy.
• Go-Live: Start recording daily sales and purchases.
• Support: Update software when GST rules change.
Aids like data backup, security controls, and reporting tools ensure smooth functioning.
Conclusion
Implementation of Tally ERP 9.0 is a structured process involving phases like planning,
system design, data migration, configuration, training, testing, go-live, and post-
implementation support. Each phase ensures that the software is aligned with
organizational needs. Aids like audit tools, security features, backup, remote access,
customization, integration, and reporting make implementation successful and sustainable.
Easy2Siksha.com
SECTION-D
7. Discuss with an example Preparation and compilation of complete balance sheet for a
firm.
Ans: Preparation and Compilation of a Complete Balance Sheet for a Firm
A Balance Sheet is one of the most important financial statements of a business. It shows
the financial position of a firm at a particular point in time. In simple words, it tells us what
a business owns (Assets) and what it owes (Liabilities). It also shows the owner’s capital,
which represents the owner’s investment in the business.
The balance sheet is prepared at the end of the accounting period, usually at the end of the
financial year. It helps owners, investors, banks, and other stakeholders understand
whether the firm is financially strong or weak.
Basic Concept of a Balance Sheet
The balance sheet is based on the fundamental accounting equation:
Assets = Liabilities + Capital
This means that everything the business owns (assets) is financed either by borrowed
money (liabilities) or owner’s investment (capital).
Diagram of Balance Sheet Concept
This diagram clearly shows that assets on one side must always equal liabilities and capital
on the other side.
Steps in Preparation of a Balance Sheet
Preparing a balance sheet is not done randomly. It follows a systematic process.
Easy2Siksha.com
1. Prepare the Trial Balance
The first step is preparing a trial balance. The trial balance contains all the ledger balances
of the firm such as:
• Cash
• Bank balance
• Debtors
• Creditors
• Capital
• Purchases
• Sales
• Expenses
The trial balance helps ensure that total debits equal total credits.
2. Prepare the Trading Account
Before making a balance sheet, the firm prepares a Trading Account to find Gross Profit or
Gross Loss.
Trading account includes:
• Opening stock
• Purchases
• Direct expenses (wages, carriage inward)
• Sales
• Closing stock
Formula:
Gross Profit = Sales – Cost of Goods Sold
3. Prepare the Profit and Loss Account
After calculating gross profit, the next step is preparing the Profit and Loss Account.
This account records indirect expenses and incomes, such as:
Expenses:
• Salary
• Rent
• Advertising
Easy2Siksha.com
• Electricity
• Office expenses
Incomes:
• Commission received
• Discount received
After deducting expenses from income, we find Net Profit or Net Loss.
The Net Profit is added to capital in the balance sheet.
4. Arrange Assets and Liabilities
After preparing the above accounts, the next step is arranging items into two main groups:
Liabilities Side
This side shows what the firm owes to others.
Examples:
• Capital
• Drawings (deducted from capital)
• Creditors
• Bank Loan
• Outstanding expenses
• Bills payable
Assets Side
This side shows what the firm owns.
Examples:
• Cash in hand
• Cash at bank
• Debtors
• Stock
• Machinery
• Furniture
• Building
• Investments
• Prepaid expenses
Easy2Siksha.com
Format of a Balance Sheet
A balance sheet is usually presented in two columns.
BALANCE SHEET
---------------------------------------------------
Liabilities | Assets
---------------------------------------------------
Capital | Cash
Add: Net Profit | Bank
Less: Drawings | Debtors
| Stock
Creditors | Furniture
Bank Loan | Machinery
Outstanding Expenses | Building
---------------------------------------------------
Total | Total
---------------------------------------------------
Both sides must always balance.
Example of Preparation of a Balance Sheet
Let us understand with a simple example.
Trial Balance of Ram Traders (31 March 2025)
Particulars
Amount (₹)
Capital
80,000
Creditors
20,000
Bank Loan
10,000
Cash
5,000
Debtors
15,000
Stock
25,000
Furniture
30,000
Machinery
35,000
Net Profit
10,000
Step 1: Adjust Capital
Capital = ₹80,000
Add Net Profit = ₹10,000
Easy2Siksha.com
Total Capital = ₹90,000
Step 2: Prepare Balance Sheet
Balance Sheet of Ram Traders
(as on 31 March 2025)
Liabilities
Amount (₹)
Assets
Amount (₹)
Capital
90,000
Cash
5,000
Creditors
20,000
Debtors
15,000
Bank Loan
10,000
Stock
25,000
Furniture
30,000
Machinery
35,000
Total
1,20,000
Total
1,20,000
Both sides are equal, which means the balance sheet is correctly prepared.
Importance of Balance Sheet
The balance sheet is very useful for many reasons.
1. Shows Financial Position
It helps us know how strong the business is financially.
2. Helps in Decision Making
Owners and managers can make better decisions about investment and expansion.
3. Helps in Getting Loans
Banks often check the balance sheet before giving loans to businesses.
4. Shows Liquidity
It indicates whether the firm has enough assets to pay its liabilities.
5. Useful for Investors
Investors analyze the balance sheet to know whether a company is profitable and stable.
Easy2Siksha.com
Limitations of Balance Sheet
Although useful, the balance sheet has some limitations.
1. Shows Position at One Time
It shows financial condition only on a specific date, not throughout the year.
2. Based on Historical Cost
Assets are recorded at original cost, not current market value.
3. Cannot Show All Information
Some factors like management efficiency or market reputation cannot be shown in the
balance sheet.
Conclusion
The balance sheet is a vital financial statement that shows the financial health of a
business. It is prepared after the trading account and profit & loss account. The preparation
involves collecting financial data, classifying items into assets and liabilities, and presenting
them in a structured format.
The key principle behind the balance sheet is the accounting equation:
Assets = Liabilities + Capital
By carefully compiling all financial information, a firm can present a clear picture of its
financial position. For students and business owners alike, understanding the preparation of
a balance sheet is essential because it helps in analyzing the strength, stability, and future
prospects of a business.
8. Write note on Accounts Masters and Account Reports.
Ans: Introduction
In Tally ERP 9.0, two of the most important concepts are Accounts Masters and Accounts
Reports. These features form the backbone of computerized accounting in Tally. Accounts
Masters are the building blocks that define how financial information is stored, while
Accounts Reports are the outputs that help managers, accountants, and auditors analyze
financial performance.
Easy2Siksha.com
Understanding these two aspects is crucial because without properly defined masters,
reports cannot be generated accurately, and without reports, masters have no practical
value. Let’s explore both in detail.
Accounts Masters in Tally ERP 9.0
Meaning
Accounts Masters are the predefined structures in Tally ERP 9.0 that allow users to create
and organize accounting information. They act like templates or categories under which
transactions are recorded.
In simple words: Accounts Masters are the foundation on which accounting records are
built in Tally.
Types of Accounts Masters
1. Groups
o Groups classify ledgers into categories.
o Examples: Capital Account, Current Assets, Current Liabilities, Sales,
Purchases.
o Groups help in preparing balance sheets and profit & loss accounts.
2. Ledgers
o Ledgers are individual accounts where transactions are recorded.
o Examples: Cash Account, Bank Account, Debtors, Creditors, Salary Account.
o Each ledger belongs to a group.
3. Vouchers
o Vouchers are documents used to record transactions.
o Types: Payment Voucher, Receipt Voucher, Sales Voucher, Purchase Voucher,
Journal Voucher.
4. Cost Centres and Cost Categories
o Used for tracking expenses and incomes by departments, projects, or
activities.
o Example: Marketing Department, Production Unit.
5. Currency and Budgets
o Masters also include currency definitions and budget allocations.
o Useful for multinational companies and financial planning.
Importance of Accounts Masters
• Provide structure and organization.
• Ensure accuracy in recording transactions.
• Facilitate preparation of reports.
• Allow customization according to business needs.
Accounts Reports in Tally ERP 9.0
Easy2Siksha.com
Meaning
Accounts Reports are the outputs generated from the data recorded in masters and
vouchers. They provide insights into the financial position and performance of the business.
In simple words: Accounts Reports are the results of accounting records, showing how the
business is performing.
Types of Accounts Reports
1. Balance Sheet
o Shows assets, liabilities, and capital.
o Provides a snapshot of financial position.
2. Profit and Loss Account
o Shows incomes and expenses.
o Indicates profitability of the business.
3. Trial Balance
o Lists all ledger balances.
o Used to check accuracy of accounts.
4. Cash Flow and Fund Flow Statements
o Show movement of cash and funds.
o Useful for liquidity analysis.
5. Day Book
o Shows all transactions recorded on a particular day.
o Useful for daily monitoring.
6. Ledger Reports
o Show details of individual ledgers.
o Example: Debtors Ledger showing outstanding amounts.
7. Outstanding Reports
o Show receivables and payables.
o Useful for credit management.
8. Ratio Analysis
o Provides financial ratios like current ratio, debt-equity ratio, profitability
ratios.
o Helps in performance evaluation.
Importance of Accounts Reports
• Provide information for decision-making.
• Help in compliance with taxation and auditing.
• Facilitate financial analysis and planning.
• Ensure transparency and accountability.
Relationship Between Accounts Masters and Accounts Reports
• Accounts Masters are inputs; Accounts Reports are outputs.
• Without masters, reports cannot be generated.
Easy2Siksha.com
• Accuracy of reports depends on proper definition of masters.
• Together, they form a complete accounting system.
Example:
• If a ledger for “Electricity Expenses” is created under “Indirect Expenses” (Accounts
Master), then monthly electricity bills entered as vouchers will appear in the Profit
and Loss Account (Accounts Report).
Advantages of Accounts Masters and Reports in Tally
1. Automation: Masters ensure transactions are automatically classified, reducing
manual effort.
2. Accuracy: Reports are generated instantly with minimal errors.
3. Customization: Masters can be tailored to business needs, and reports can be
filtered.
4. Decision Support: Reports provide insights for managerial decisions.
5. Compliance: Reports help in filing GST, TDS, and other statutory returns.
Limitations
1. Dependence on Accuracy of Masters: If masters are wrongly defined, reports will be
misleading.
2. Training Requirement: Users must understand how to create masters and interpret
reports.
3. Customization Challenges: Complex businesses may require advanced
customization.
4. Technology Dependence: Reports depend on proper functioning of software and
hardware.
Practical Illustration
Imagine a retail store implementing Tally ERP 9.0:
• Accounts Masters:
o Groups: Sales, Purchases, Expenses.
o Ledgers: Cash, Bank, Rent, Salaries.
o Vouchers: Sales Voucher for daily sales, Payment Voucher for rent.
• Accounts Reports:
o Balance Sheet showing assets and liabilities.
o Profit and Loss Account showing monthly profit.
o Outstanding Report showing customer dues.
This integration ensures the store can track performance, manage cash flow, and file taxes
easily.
Conclusion
Easy2Siksha.com
In Tally ERP 9.0, Accounts Masters are the foundation—they define groups, ledgers,
vouchers, and cost centres. Accounts Reports are the results—they show balance sheets,
profit and loss accounts, trial balances, and other analyses. Together, they make accounting
systematic, accurate, and insightful.
“This paper has been carefully prepared for educational purposes. If you notice any mistakes or
have suggestions, feel free to share your feedback.”
