Journal entry in Tally.ERP 9 is one of the simplest things which one can do without any serious efforts if the person knows a little bit of basic rules of accounting Though most of the people feeling unnecessary confusion in Journal Entry itself. That is because of lack of knowledge of accounting rules and lack of a guidance from a professional and experienced mentor
Typically a journal entry refers to a financial transaction where one account is being debited and another account is being credited. Which account needs to be debit and which account needs to be credited is a matter of Accounting principles. Again a payment or a receipt entry also can be posted in a journal voucher and that is why the question of journal entry comes, most people feels confusion here. Purely thinking from the accounting viewpoint than almost any type of voucher e.g. a Sales or a purchases bank or what every transaction in business is a kind of a journal entry where one account is debited and another account is debited.
but in an ERP Software like Tally.ERP 9, for a systematic maintenance of records, there is always different types of vouchers are being created. The same rule applies to any ERP Solution. All ERP solutions will have their own special type of vouchers to record Sales, purchase payment receipt and journal separately.
But when you purely look at the concept of a journal entry it is something different. So, If you guys really wish to understand the Journal Entry then for a moment, please don’t think a journal Entry with relation to Tally.ERP 9’s Journal Voucher (F7) 🙂
So, let’s forget about the Voucher type of Journal and think about a journal entry purely from the accounting viewpoint.
Examples of Journal Entry in Accountancy
Here is a practical example of a journal entry (Remember All type of transactions are the journal transactions in Accountancy )
When there is a sale is made in a business unit,
An Entry will be passed
” Debit the customer
Credit the sales ”
This is a journal entry.
Journal entry means journalising or recording a transaction.
But since in an ERP software like Tally.ERP 9 for simplicity and better management we will pass the above entry in a specific Voucher type like Sales Voucher (F8) as it help us to maintain Inventory, auto calculation of duty so posting a Sales voucher through a journal voucher is not a wise idea!
in the same way, A purchase transactions can be journalized in the accounting in the below sense
Debit Purchase Account
Credit Supplier Account
This entry can be passed in the journal voucher in any software but if every business transactions which are a kind of a journal entry itself if we post just in a journal voucher then why we need such costly ERP software ? Why not use an excel sheet or use only a software which allowed us just to one voucher type called Journal ?
So we use designated special vouchers types in the ERP Software to post the transactions like Sales, Purchase, Payment. and Receipt etc separately in the specially created voucher types for that purpose in the software and all financial transactions which can’t be posted through the above voucher types we post them through a Journal Voucher!
but the key point to remember that in Accounting all Business Transactions is a journal voucher/a journal entry by its original nature!.
I am sure this will give you a clear insight of what is a journal Entry.
PRO-TIP The short command in Tally.ERP 9 to post Journal Entry is F7.
Accounting people easily confused about how to do Journal Entry in Tally.ERP 9. The confusion related to journal entries is high due to lack of basic accounting knowledge and people are unsure about the classification of journal entries as there is no hard rules and journal entries very much depends on the nature of a transaction itself and the business activities being carried out.
Most common and easiest transaction recording in tally.erp 9 is the accounting journal entry. I will teach you how to account Journal entry in Tally.ERP 9.
What is Journal Entry
The Wikipedia defines journal entries as logging of transactions into accounting journal items. Typically journal entries consist double entry, one ledger will be debited and another ledger will be credited for the same amount. Some common examples of journal entries are bad debts provision, taxation provision, other monetary or not monetary expenses etc.
Why you should learn accounting Journal entry
Learning accounting Journal entry is very important for finalisation of accounting. Without understanding Journal entries, accounting data of a company will lead a misleading and false picture of economic affairs of the company. You can impress your bosses and other companies by mastering the skill of journal entries. if there is a fire occurred in your organization you are assigned to pass the damage in the books of accounts then how you will do to record ?
similarly, your company has given valuable gifts to your customer then how you will record such transactions if you are not aware of accounting journal entries?
Journal entry in Tally.ERP 9 How to do?
Tally.ERP 9 have special voucher types to record specific vouchers:
01 Payment voucher to account payment made by cash/cheque (F5)
02 Receipts Voucher to account all receipts in cash/cheque (F6)
03 Journal Voucher for transaction which does not involve cash/bank)(F7) which includes debit and credit note
04 Sales Voucher for Credit Sales (F8)
05 Purchase Vouchers for Credit Purchases (F9)
So, here we will see how the entries are made in Tally through journal ?
Suppose an enterprise bought stationery items of a worth of Rs. 4500 from M/s. XYZ stationery mart on a credit basis.
Then go to voucher entry, press F7 select the date of invoice
Then Dr. Stationery & Printing Expenses account for Rs. 4500
and Credit XYZ Stationery Mart for Rs.4500
In narration please mention the items purchased in brief, e.g. bill no. short description of item etc.
and press enter
you have completed the journal entry.
In the above example if the above purchases were done on cash/bank payment then the same entry to be done through payment voucher(F5)
In other words, all vouchers which weren’t included in the category of a cash/bank payments or receipts and sales-purchase type of nature, have to be accounted through the journal vouchers.
the easiest part of a journal entry in Tally.ERP 9, is that once you are familiar with a debit and a credit ledger head, you don’t need to worry more.