TALLY

TALLY is an accounting software package to maintain the accounts of the company. In this software user can handle all the financial transaction of the company. This package is very useful and easy to maintain the accounts. It can maintain multiple accounts, i.e. it can maintain accounts of more than one company. TO START TALLY Make sure that Tally is loaded in your systems Hard Disk or on the system connected with the Lan (Local Area Network) Command to Run Tally on Your system After booting on Dos Prompt C:\ The user shall write the following commands C:\> (This is your Hard Disk Prompt) C:\>CD\Tally C:\Tally\Tally Important Keys Use the Enter Key to accept an operation or enter into the details of an item. Use the Esc Key to cancel an operation or return to the previous screen. The Enter & Esc are the two most important and widely user keys in Tally. Use the Up Arrow & Down Arrow keys to move the cursor and select an item. User the function keys, F1 to F10 as instructed on the screens. The Control & Alternate Keys, in combination with the function keys, are used for controlling the range of the report displays, out put methods and advance usage of Tally. SYSTEM REQUIREMENT 1. Min. 1 MB RAM available on your system 2. Min. 2 (1.2 MB) Floppies for loading this software.

3. Min. 20 MB Hard Disk available on your system. The above requirement is necessary to load Tally on your system. THE COMPANY After loading Tally the first menu, which appears, is COMPANY INFORMATION from here the following options are available. Select Create Display Alter Backup Restore rEcovery of data Quit CREATE AND SELECT OF A COMPANY Create This option is used to create a new company. information related to the company. Here user can enter: Company Name Company Address: Income Tax Pan (Permanent Account Number): (If any) Local Sale Tax Registration No: (If any) Inter State sale Tax Registration No: (If any) Financial Year: (Here user can enter the Financial year for which accounts are being prepared) Book Beginning Form: Security Method: (here user can provide a password) 1. No Security: No password is given Here the user enteres the

2. Password: Here user can define the password, two options available to the user. A. Security Level 1: User can perform all the operation through the menus. B. Security Level 2: user can write direct commands. Select This option is used to select a company account to work in which is already exists. If there is more than one company account present in the system, then the user can select one company from the list. Display This option is used to display the company information on the screen. Alter If user wants to modify the company information then user can select this option to modify the company information. GATE WAY OF THE TALLY After select the company the main menu comes over the screen the name of the this menu is GATE WAY of Tally. In this menu users can maintain the financial status of the company. Accounts Information Voucher Entry Balance Sheet Ratio Analysis Displays Printing /Export Quit F1: Company Information F2: Date Change F3: Controls F4: Advance Usage F5: Direct Commands

Accounts Info This is used to create and maintain ledger Accounts, Groups and Cost Centre. Voucher Entry This is the most frequently used part of the program. This is where the day-today entries are made. Balance Sheet Balance sheet is just a key press away. It is always shows as of the last voucher entered, and permits exploration into Profit & Loss A/C, the details of each group, ledger, and down to the voucher. Ratio Analysis Gives you the overall financial status of the organization on a single screen. Display This displays books and statements. This is treasure house of almost every conceivable level of information. Printing/Export Your can print reports in 80 or 132 column paper. Tally has separated the display and printing routines to fully exploit the capabilities of modern printing to present some of the most aesthetic reports. You can also export data in ASCII Delimited and SDF formats. Quite Select quit when you are finally able to say good-bye for the time being.

SHORT CURT KEYS FOR FASTER WORKING F1: Company Info Used to select or create a new company. Also available are the Check Data options, discussed separately.

F2: Change Data After completing work for the Current Data, You can press F2 to change the data. F3: Controls Advanced control and activation of facilities like: Voucher numbering Operations Bill wise Details Cost Centres Budgets Debit and Credit Notes Tally Audit, etc. Configuration Data Path Printer Selection Background Printing, etc Country Information Currency Type etc Printer Setup New Printers, etc

F4: Advanced Usage You can import or Consolidate data, Remove and rejoin the previous years data of a company. F5: Direct Commends You can give complex commands in plain English. interface manual. ACCOUNTS INFORMATION In the Accounts Information there are four options Ledger Group Cost Centre Quit LEDGER This is for the creation of new Ledger Accounts, Alternation of existing ones, to change opening Balance, Address or perhaps correct spelling errors, and also to display a chosen account. Refer to the Command

Creation Alternation Display Budgets Creation Press C to create new ledger A/cs., whenever a company is created. Tally automatically creates two required accounts. These are Cash A/c and Profit & Loss A/c. No other assumptions about the other types of accounts are made. The only restriction imposed is that you cannot have another Profit & Loss A/c. No restriction is imposed on the kind and number of any of other accounts. Creation of Ledger Accounts Name of account: Feel free to give the full name of the account in the normal manner. Alias: a simple mechanism to call an account head by another name. If an alias is given you may enter a voucher using either of the two names. If no alias is desired, simply leave this place blank by press Enter . Group: All accounts Must be classified in their appropriate groups. Here you must specify which group the given account falls under. Alteration of Ledger Accounts This allows you to make changes (Correcting Mistakes) for accounts already created. For example, user wants to modify the Cash A/c to give the Opening Balance as per you previous years Balance Sheet before proceeding for voucher entry. Display of ledger Accounts It is simple alphabetic scroll through your accounts that have already been created. It is a convenient way to check for correctness of opening balance and other information deficiencies. Budgets To set payment limits, monthly budgets and annual budgets.

The facilities for alteration and display work in a manner similar to creation. We shall therefore concentrate on subject of creation of ledger accounts. GROUP Grouping is a powerful classification manager. All ledger A/cs in Tally can be classified and/or sub classified in any desired manner. The facility is so powerful that an entire chapter is developed to the subject. If you are not a commerce student and this is the first time you are using Tally, it is advisable to go through it for a through understanding of its utility. However, this is good place to note that it is not necessary to have sub classification of accounts . If your accounting requirement is meagre (for example, you are just catching up with the backlog which does not need any major handling), you can use Tally effectively even without touching this option Nevertheless, it is necessary to go through the section on classification given here under . Items given belong the Primary Groups are the pre-defined children or SubGroups. Capital Account Reserves & Surplus Loans (Liability) Bank OD A/C Secured Loans Unsecured Loans Current Liabilities Duties & Taxes Provision Sundry Creditors Fixed Assets Investments Current Assets Stock-in-hand Deposits (Asset) Loans & Advance (Assets) Sundry Debtors Cash-in-hand Bank Account Profit & Loss A/c Revenue Accounts Sales Account Purchase Account Income (Revenue) Expenditure Account Expenses (Direct) Expenses (Indirect) Branch / Divisions Misc. Expenses (Asset) Suspense A/c

Some of the Group have been defined for convenience. For example, Branch/Division or Suspense A/c are normal groups. Tally defines the above groups and expects them to be used in a specific manner. Capital Account This hold the Capital and Reserves of the company. The possible ledger heads that can be opened are Share Capital A/cs, Partners Capital A/cs. Thus the Investment Allowance Reserve, General Ledger and other such Reserve A/cs would be opened in this Sub-Group.

Loan Generally, Loans taken by the company fall here. The major sub-groups are Bank OD, Secured Loans and Unsecured Loans. Bank OCC A/c Tally gives two distinct types of bank Accounts. The Bank OCC A/c is meant to handle all the overdraft A/cs of a bank. For example, the Hypothecation A/cs, Bill Discounting A/cs etc., which are operated on a day-today basis. Secured Loans Terms Loans and other Medium/Long Term Loans should be put under secured loans. Unsecured Loans Loans from outside parties, including Directors and Partners. Liabilities Directly under Current Liabilities we find place for outstanding liabilities, statutory liabilities like ESI, PF, TDS and a host of minor liabilities. The Major Sub-group are Duties and Taxes, Provisions and Sundry Creditors. Duties & Taxes For all Excise, Sales and other trade taxes. It is a convenient place to find total liability of the company (or asset in the case of advance excise paid) as well as the break up of individual items. Provision For income Tax, i.e. other provisions depending on the operating method of the company can be taken care of here. Sundry Creditors Naturally, the trade creditors of the company.

Fixed Assets This hardly required any explanation. Investments Investment in shares, bonds securities, or even other companies, A convenient place to find the total investment made by the company. Current Asset Directly under Current Assets, we may find place for certain assets, which do not fall into the general categories below. Stock-in-hand A Very Special Group. Accounts which fall under the stock-in-hand group are not permitted any transaction. This holds the values for the opening and Closing stock of that account. For example, accounts called Raw Materials, Work in progress, and Finished Goods could be opened here. Since no vouchers can be passed for these accounts, they are the Only accounts for which the Closing Balance can be adjusted from Ledger Accounts (Alteration). The Opening Balance of these account give the Opening Stock of the company, While the Closing Balances give the Closing Stock. Naturally, the Closing Stock is automatically carried forward as Opening Stock for the following year. Closing Stock figures can also be directly provided from the Balance Sheet of Profit & Loss A/c (Note: as per accounting principal, the Closing Stock figure is not reflected in the Trial Balance, but only in the Profit & Loss and Balance Sheet of the company). Deposits (Asset) In essence a place for Fixed Deposits, Security Deposits, Deposits in other companies, Rental Deposits and a host of other such deposits. Loans & Adv. (Assets)

All advances of a non-trading nature. For example, advances against salaries, work contracts, or even purchase of Fixed Assets, Loans given by the company can also fall here. Sundry Debtors A self-explanatory group. Cash-in-hand Tally automatically opens one ledger account of cash under this group. Banks Accounts Current Accounts/Savings Accounts and other bank account may be opened here. It should be noted that Only Contra Vouchers are permitted between Ledger Accounts falling under Bank OD, Bank Accounts and Cash. Similarly, Payment, Receipt Vouchers Must have at least one of these Accounts as the Payee/Payer Account. Profit & Loss A reserved group, Tally automatically opens the ledger A/c (Profit & Loss A/c), which falls under this group. No other account can be opened, nor can this account be deleted. The Only possible voucher that can be made with this account is a journal when the accrued Profit are transferred to Reserves or Capital Accounts. This is also the name used for the report, Profit & Loss A/c. Therefore if you wish your P&L A/c to be named Income & Expenditure A/c, simply alter the name of this Group. Revenue Accounts These are the accounts, which build up the profit & Loss A/c of the company. The principal categories are Sales, Purchase, Income (Revenue), and Expenditure. The Opening and Closing stock figures to prepare the Profit and Loss are taken from the Stock-in-hand group as explained above.

Sales Naturally all the differing sales types come here. We recommended bifurcation of your Sales A/cs based on the sales Tax slabs so that a simple mechanism is created for the preparation of sales Tax Returns by you. If you desire to see your Net Sales after taking into consideration Sales Returns, you can either open a ledger account called Sales Returns classified under the group Sales, or pas your journals for sales returns directly against the specific sales account. Purchase This is similar to Sales Accounts, except for the purpose of transaction. Income (Revenue) Normally used t indicate no-sales revenues. Interest Received or Commissions Received. Expenditure Another self-explanatory group. Expenses (Direct) For all other administrative, selling or non-direct expenses. Brach / Divisions This is an additional group, and the name does not amplify its full usage. Here you may keep the names of all the companies, which may be Branches, Divisions, Affiliates, Sister Concerns, Subsidiaries, etc. This is a group of convenience and you not wish to utilize it in this manner. Note: Tally will permit sales and purchase transactions to take place between accounts to be tracked on a Bill-to-Bill basis (which is permitted only for Sundry Debtors and Sundry Creditors). Miscellaneous Expenses (Asset) A rarely used group. As per the schedule VI of the Companies Act of India Preliminary and Preoperative expenses and other such expanses which have to For example, Rent Received,

been capitalized to the extent of not writing them off into the profit and loss of the company which have not been written of but carried forward for the next year also fall here. However Tally carries forward non-adjusted profit and losses in the ledger account of Profit and Loss A/c, which falls under the group of the same name. Suspense Account Theoretically this should not exist. However a number of large corporations use a suspense ledger account to track money paid or receive, the nature of transactions for which is not yet known. The most common example is money paid for Travelling Advance, the detail of which expense will be known only upon submission of the TA Bill. It Must Be Noted That Is A Balance Sheet Item. If there are account heads in the nature of Suspense Expense, they must be classified under Expenditure Accounts and not Suspense A/c. SUB-CLASSIFICATION OF ACCOUNTS Tally gives an even more powerful way to organize a large number of accounts. This can be utilized to enhance the information system. This facility is a flexible and unlimited sub-Classification of Accounts. It is better explained with a few examples. Essentially, the classification appears as: Expenditure Accounts Administrative Expenses Interest Paid Interest Paid to Bank Interest paid to Others Manufacturing Expenses How to Manage and Operate Sub-Group Select Groups under Account Info menu to manage and operate sub-groups. Press G to bring up the Group A/cs menu. The available facilities are almost the same as for ledger A/cs, i.e. Creation, Display, Alteration and Budgets. These operate Identically to ledger Account facilities. Thus, pressing C brings up Group Classification (Creation). Name of Group : enter the name of the desired sub Group

Alias : A concept similar to Aliases in Ledger Accounts. Thus a group called Security Expenses could also be called Watch & Word. Leave it blank if no appropriate alias exists. Classified Under : Specify under which available group (main group) the subclassification is needed (in this case expenditure Accounts). Accepting the information creates the new group. To go further down the levels, create paid as a group and this time, classify it under administration expenses. Budget The use of budgets to control day-to-day operations can be an educative task as well a beneficial one. Tally gives the facility to fine tune your control of Budgets over Ledger accounts, groups of accounts and cost centres. First, let us look at how budgets can be set and subsequently, we shall go into the method of its implementation. Press B at the Ledger/Group/Cost Centre menu to come to budgets and the screen for Budgets appears. Type in the name of the Account for which budgets have to be set or altered Limit on Singla Payments. This is available only for the ledger accounts. Tally will complain if you make a payment exceeding the value filled in here, i.e. you could set the limit for Conveyance changes to Rs. 25.00 whence Tally will detect the entry of any voucher in which more than Rs. 25.00 is being paid for convenience. Similarly, an upper limit of Rs. 2500.00 for can may be set, Leaving the place empty (That is with a zero amount) removes will limits. Annual Budgets Self-explanatory, the budgets for the year. discussed here. Month Wise Budgets Here the budgets for the individual months are taken care of it must be noted that Tally does not require the sum of the twelve months budgets to be equal to the annual budget. An additional advantage of this facility is that you can now control your Bank Overdraft A/c on a monthly basis depending on the actual drawing power as mentioned above. However, the other aspects are

What happens for Groups & Centres If you have set budget for a Group, Tally also checks to see if the total if all Ledger A/cs, which fall under the group, are within the specified budgets. You may now set a global budget for expenses to be Rs. 25 Lacs, while individually controlling only a few of the critical accounts. Tally will complain (Give a warning beep) the moment your expenses exceed this amount. This concept is extended for Cost Centres Judicious use of the Budgeting facility can build in immense controls within the day-to-day operations. You own judgment and estimates will improve only after a few experiments. Since Tally offers a flexible system, you can always come back to this place and make amendments. VOUCHER ENTRY This is the most frequently used area of Tally. Here you enter you day-to-day vouchers. The various aspects, which must be kept in mind and the method of their implementation, are discussed here. At the Gate Way to Tally Press V the screen for voucher Entry appears. The line at the bottom of the screen gives a list of permitted Voucher Types with shortcuts to invoke them (the means to get to them) in Tally 5 the menu is shifted from the bottom to the right side of the screen. Tally has seven basic type a of vouchers. These are:
F4 : CONTRA F5 : PYMT (PAYMENT VOUCHER) F6 : JRNL (JOURNAL VOUCHERS INCLUDING DEBIT & CREDIT NOTES) F8 : SALES F9 : PURC (PURCHASE) F10: MEMO/REVERSING JOURNALS

Press the corresponding Function Key to get the voucher type. (Function keys are located along with top of the keyboard. F5 means the key marked F5 on your computer and Not the sequence of two key strokes F and 5). All vouchers have the following common information Date of Voucher: Appearing on the Top Right of the Voucher Box. This is the Current Date of the program and indicated that the voucher is being prepared for

this specific date. The only way to change this date is to press F2, and give the new date. (Alternately, you could Esc out of voucher entry, and change the date at the Gateway of Tally, also by pressing F2). Tally also shows the day of week for the particular date. This is cosmetic information, useful as a crosscheck when you are catching up with the backlog. Type of Voucher: The Top left of box shows the current Voucher type. Change it (if required), by pressing one of the relevant (specified) function keys. If you are using Debit & Credit Notes for this company (see controls), Pressing F7 will bring the cursor to this place and you may select either journal, Debit Note or Credit Note for the Entry to be made. Voucher No.: This is the number following the Voucher Type. Note that the Voucher No. appears only it has been activated for that type of voucher. Normally, this would be so. If you have decided to let Tally do the numbering automatically the number would have been filled in. Otherwise you would be asked to give the number. Narration: The last item at the bottom of the voucher. We have discussed the body voucher separately for each type of voucher below. Tally permits a full 150 characters for the narration. Thereby a small story can be written on the nature of the voucher. Narration is also known as Summary of the voucher entry. The narration works in normal word processing style, and you can type continuously without worrying about the size of the line or how to get to the next line. CONTRA VOUCHER This is for fund transfer only. Thus cash deposited in Banks, withdrawn from bank or transferred from one Bank A/c to another is a contra entry. The entry is of the following form: Particulars To (Source of funds) By (destination of funds) (Amount) Debit Credit (Amount)

Thus, if Rs. 25000.00 Cash is deposited in Canara Bank the entry would be: Particulars To Cash Debit Credit 25000

By Canara Bank

25000

PAYMENT VOUCHER (Payment Journal) All payments (Whether through Cash or Bank) are entered here. Tally permits adjustment of a part payment to the relevant Cash/Bank A/c and another part payment to another account. Particulars By Travailing Expenses To Cash Particulars By Caesars Trading Co. To Bank Charges To Central Bank Particulars By Macbeth Stores To Central Bank To Purchase Returns Debit 11000 10800 200 Debit 15000 30 15030 Credit Debit 4500 4500 Credit Credit

The last example shows an actual payment made was 10800 but the bill of the party was for 11000. This is an instance of a Cash Journal, and is now the normal method of adjustment used by corporations. The alternate way of representing the same information is by passing two vouchers thus: Particulars By Apollo Stores To Central Bank And a journal Voucher for Particulars By Apollo Stores To Purchase Returns Debit 200 200 Credit Debit 10800 10800 Credit

Use whichever method prevalent in your organization. Tally neither imposes any restrictions nor forces use of a particular style.

Particulars By Basic Salary By Dearness Allowance By House Rent Allowance By CCA By Conveyance Allowance To TDS To Advance against Salary To Insurance To PF To family persons fund To Cash

Debit 34430 28450 6100 800 150

Credit

125 5600 1230 2100 1010 59865

This voucher shows a most typical Salary payment in most organizations coming under the Minimum Wages Act. Important: It must be noted that all Payment Vouchers must have a bank of cash entry in it. Tally will complain if you attempt to make an entry similar to the following one: Particulars By Travailing Expenses To Cash Credit 1200 1200 Debit

RECEIPT VOUCHER (Receipt Journal) Identical in all respects to a payment except that the Debit and Credit entries are reversed. Given below are some examples: Particulars To Interest Received By Overseas Bank Particulars To Alexander Trading Corporation By Central Bank By Bank Charges 96012.50 77 1800 Credit Debit 96089.50 Credit Debit 1800

This Voucher typifies the deposit of an outstation cheque in the Bank, for which the bank credits amounts after deducting the cheque clearing or discounting charges. Particulars To Overseas Trading Corporation By Central Bank By Bank Charges By Sales Returns 84100 58 11921 Credit Debit 96089 1200

Above Voucher is similar in context to the Payment Journal examples shown earlier. Particulars To Sales Local 8% To Local Tax 8% By Cash Above Voucher is a typical example of a cash sale. Important: It must be noted that all Receipt Vouchers must have a bank or cash entry in it. Tally will complain if you attempt to make an entry similar to the following one: Particulars By Apollo Stores To Cost of Machine Credit 21200 21200 Debit 5832 Credit Debit 5400 432

JOURNAL VOUCHER/DEBIT NOTE/ CREDIT NOTE A journal Voucher is an adjustment Voucher. Thus all amount to be adjusted between two accounts are passed as a journal. By adjustment, We mean that no physical movement of funds takes place. For example, if a sale of 10,00,000 is made to a party, and the party pays 9,00,000 after having deduction 1,00,00 for short supply of goods, than the physical transfer has been for 9,00,000 only. However, if only this entry is passed as a receipt, then an outstanding of 1,00,000 will remain against that party which would not be correct. Typically, this amount is Adjusted by passing a journal (or a Credit Note), editing the amount to the Sales Returns A/c and crediting the party, thus clearing his account. This an example situation, and the year end closing of accounts normally require a fair amount of adjustment entries like Depreciation. Expenses incurred but payable in the following Financial Year, interest Receivable or payable and so on. Journal Voucher and Debit Notes are passed as follows:Particulars By Deprecation To Machinery To Furniture & Fixtures To Motor Car Particulars By Profit & Loss To General Reserve Particulars By Profit & Loss To Macbeth (Partners Capital) To Banquo (Partners Capital) Particulars By Brutus Trading Company To Purchase Return Particulars By Sales Return To Anthony Steels Credit 400 400 Credit 1560 1560 Debit Credit 150600 150600 Credit 150600 75300 75300 Debit Debit Credit 48600 29000 6500 13100 Debit Debit

Credit Notes are different only to the extent of the Debit and Credit Priorities: Particulars To Anthony Steels By Sales Returns 400 Credit Debit 400

It must be noted that Tally permits Debit & Credit Notes to be raised on Sundry Debtors, Sundry Creditors and Branch/Divisions only. Thus the first entry in the voucher MUST be for name which belongs to one of these groups. Transfer of Revenue A/cs to Profit & Loss The year-end transfer of entries to Profit & Loss (using journal voucher) is not required under Tally. When amounts are carried forward to the next accounting year, Tally automatically zeros out all revenues Items and transfers Capital Items only to the following year. SALES VOUCHER Basically the Sales Invoice Bill. The normally entry consists for Particulars By (Name of the party) To (Sales Amount) To (Duty Tax) To (Reading / forwarding Charges) By (Discount) (Discount Amount) Credit (Total Bill Amount) (Net sales Amount) (Tax Amount) (Expense amount) Debit

Only the first two entries are Mandatory. The name of the party has to belong to Sundry Debtors, Sundry Creditors or Brach / Divisions. Tally automatically forces this discipline. We have mentioned it here to avoid confusion during usage. In case you have accidentally put a party under Loans & Advance in the place of Sundry Debtors you will not be allowed to makes sale or Purchase Bill for it Alter the Group of the party (choose Alteration from the Ledger Menu) and then proceed to make the bill. The second item Must belong to the Sales Group. As recommended earlier, you could have opened several Sales Accounts based on differing Tax slabs. The other entries consist of items from Revenue Accounts (Other than Purchase Accounts) and Current Liabilities (other than Provisions and Sundry Creditors). Thus Expenditure Accounts, Income Accounts, Sales Accounts (in case one bill has more than one sale type), Duties and Taxes etc can be use here.

PURCHASE VOUCHER In almost all respects, this is identical to Sales Voucher, and a few examples should suffice to show the different: Particulars To Oil Paint Stores By Purchase (Paints) Particulars To Hardware & Steel Merchants By Purchase (Raw Materials To Freight 54500 1500 12100 Credit Debit 53000 Credit Debit 12100

RESERVING JOURNALS One of the effects of the Accural Method of Accounting, as practiced as the requirement to book income and expenses for every period of accounting normally, this is done at the end of the year only. Thus one journalizes expenses incurred to outstanding Liabilities or such account. For example, Salaries, Telephone Bills, Interest Payable, etc. In a like manner, expenses prepaid are covered to Assets and Incomes receivable (such as interest receivable, Rent Receivable, Commission receivable, etc) are also journalizes. This exercise results in the true picture of the company at the end of the period. The drawback here is, that as a standard practice, Accounts all over the world undertake this Formal Exercise only once in a year. This means, that any interim statement (like Balance Sheet or Profit & Loss) would not reflect the accurate position of Accounts, Manually, this problem is easily overcome by first drawing up the P&L and pending in the required provision. Effectively this means that figures are incorporated into the books without effecting the underlying accounts. Typically the life of these entries are for that specific date only. A parallel, though formal system would be to pass a regular journal on a date (say the end of a month), And Reverse Th journal The Very Next Day. This would ensure that the information on as on the end of the month would be accurate, and yet, would not affect the complete accounts, since the entries have been reversed the next day. Tally symbolizes this effect by the use of Automatically Reversing Journals, (Reversing Journals), are normally not accounted for. They have an internal life of a day, and a statement can be see, With or Without taking the reversing

journal into account. Thus, if a Reversing journal has been passed for 31 st of May, Then Only on 31st of May, you may see the Balance Sheet with or without this Journal in effect. (Use Ctrl+7 at the balance Sheet to toggle the effect on any other date, the Reversing Journal of 31st May has no effect whatsoever. Particulars By Salary To Outstanding Liabilities Credit 53000 53000 Debit

On the 5th February, a normal payment entry would have occurred as: Particulars By Salary To Cash Credit 53000 53000 Debit