Explain how to create a ledger with suitable examples.
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Ledger creation is the preliminary steps to start with Tally ERP 9 just after creating company. Before creating a ledger you should know what is a ledger according to accounting concepts a group of account is called a ledger. Where as an account is a device used to record the effect of transactions on the assets,liabilities and capital of an enterprise. In accounting concepts a book with many account is called a ledger.
example In Tally perspective an account itself is called ledger. In Tally ERP 9 Account = Ledger. As per their help documentation says as “A ledger is the actual account head to identify your transactions and are used in all accounting vouchers. For example, purchase, payments, sales, receipts, and others accounts heads are ledger accounts”.
For reporting purpose a ledger is grouped according to its nature. This will help you to know the summary of a specific types of ledger. For example
Tea expense grouped under Indirect expense. Purchase expense grouped under purchase account which is a sub group of direct expense. This will help you to understand the total of Indirect expenses as well as individual ledger total.
Here is the examples of grouping of ledger compared with actual accounting groups.
LedgerGroup in Tally ERP 9Group as per accounitng Tea expenseIndirect ExpenseIndirect expensePurchase A/cPurchase AccountDirect expenseICICI Bank LoanSecured LoanLiabilitiesFurnitureFixed AssetFixed AssetCustomer ASundry DebtorsDebtorCommission ReceivedIndirect IncomeIncome Indirect
In the above example you can find the purchase account is grouped under a new group called Purchase Account in Tally. But in Reporting ( profit and loss account) this will show as direct expense in Trading Account. Which means the purchase group is the sub group of Direct expense.
example In Tally perspective an account itself is called ledger. In Tally ERP 9 Account = Ledger. As per their help documentation says as “A ledger is the actual account head to identify your transactions and are used in all accounting vouchers. For example, purchase, payments, sales, receipts, and others accounts heads are ledger accounts”.
For reporting purpose a ledger is grouped according to its nature. This will help you to know the summary of a specific types of ledger. For example
Tea expense grouped under Indirect expense. Purchase expense grouped under purchase account which is a sub group of direct expense. This will help you to understand the total of Indirect expenses as well as individual ledger total.
Here is the examples of grouping of ledger compared with actual accounting groups.
LedgerGroup in Tally ERP 9Group as per accounitng Tea expenseIndirect ExpenseIndirect expensePurchase A/cPurchase AccountDirect expenseICICI Bank LoanSecured LoanLiabilitiesFurnitureFixed AssetFixed AssetCustomer ASundry DebtorsDebtorCommission ReceivedIndirect IncomeIncome Indirect
In the above example you can find the purchase account is grouped under a new group called Purchase Account in Tally. But in Reporting ( profit and loss account) this will show as direct expense in Trading Account. Which means the purchase group is the sub group of Direct expense.
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