Journal Entries on Tally

What is a Journal?

A journal is an essential component of the accounting process. It is a book where all the transactions of the business are recorded. Usually, the transactions of a journal are recorded chronologically. Different companies follow different systems of recording these entries. Some firms follow a single-entry system, while others follow a double-entry accounting system. Now, let’s try to understand what is single entry system and a double-entry system.

What is a single-entry system?

A single-entry bookkeeping system is one in which the company’s transactions affect only one account, i.e., only one account’s value decreases or increases due to the transaction amount. A cash book is created in this system, which shows the payment and receipts of cash transactions. New companies or sole proprietorship businesses use this method as they don’t follow any accounting principles.

What is a double-entry system?

In the double-entry system, every financial transaction is recorded in at least two independent accounts, with equal and opposite impacts on the relevant accounts. The entries in a double-entry system are created to satisfy the equation:

Liabilities + Equity = Assets

Primarily, a double entry system is used to record transactions in the books of accounts. The payroll in Tally also uses the double-entry accounting system for recording all the transactions.

What is Journalising?

The process of recording transactions in a journal or the book of accounts is called Journalising. The method of journalising can be done both online and offline. Even when you are doing a company payroll in Tally, that too is journalising. You must understand what a single entry system and double entry system is to conduct the process of Journalising smoothly. Journalising affects two or more accounts as it follows the double-entry accounting system. In the Journalising process, the transaction is first examined to determine which account should be debited or credited using the debit and credit rules. After that, entries are made in accounting books. Here, you can use Tally instead of manual books of accounting.

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Importance of Journal Voucher in Tally

In Tally, a journal voucher is a significant voucher used to record all types of adjustments, credit purchases or sales, and fixed asset acquisitions. From the accounting Voucher screen on Tally’s Gateway, click the “F7” shortcut key to pass entries as journal vouchers. 18 vouchers are present on the tool, and these vouchers are divided into two parts:

• Inventory Vouchers
• Accounting Vouchers

Steps to Enter a Journal Entry on Tally

You need to take a few simple steps to enter a journal entry on the Tally software. Some of these steps are: 

• Select the ‘Accounting Voucher’ option from the Gateway of Tally menu
• Press ‘F7’ on your keyboard to get access to or to generate the journal voucher entry
• Now, click the date button and select the date for which you are making the entry
• You will now see the Particulars section. You will have to enter the ledger debited beside the ‘By/Dr’ section. Tally allows you to enter different aspects of Debit.
• Once you have made the debit entry, click ‘To/Cr’ to select the account that has to be credited.
• You can then add the description of the transaction in the narration field.