31Jul, 2021

What are the top accounting and finance professional courses in India ?

Accounting courses in 2021

With the increasing demand from the accounting industry, there is a huge transformation in the way an individual is trained for the corporate environment.

“Accounting is an art of recording, classifying and summarizing in a significant manner and in terms of money event and transaction which are at least of financial character and interpreting the result thereof”

As per the American institute of certified public accountant”

Why do Accounting courses?

With the increasing demand from the accounting industry, there is a huge transformation in the way an individual is trained for the corporate environment.

There are many different types of accounting degrees, with undergraduate-level titles such as Bachelor of Accountancy & Bachelors in Accounting. The specialized; Bachelor of Accountancy in the US is often the only undergraduate degree recognized in the country for subsequent practice as a professional accountant in that respect, it works as a first professional degree

Chartered Accountant

Chartered accountants are equivalent to certified public accountants in the United States. They receive their graduate school education overseas and can work in many different settings around the world. Chartered accountants provide clients with consultation on tax, accounting and auditing activities.

Required Education	Graduation from a two-year chartered accountant program overseas after receiving a bachelor’s degree
Other Requirements	Licensure depending on the country
Projected Job Growth (2019-2029)	4% (for accountants and auditors)
Median Salary (2021)	$80,000** (for chartered accountant)*

Chartered Accountant Education Requirements

Educational programs for prospective chartered accountants are not available in the United States. The corresponding role is certified public accountant (CPA). Those interested in becoming chartered accountants should first obtain a bachelor’s degree in accounting or a related subject. They must then seek out a chartered accountant program in a country such as England, Canada or Australia. Most chartered accounting programs last two years and are considered post-graduate programs. They sometimes require prior work experience in accounting, in addition to a relevant undergraduate-level degree.

Cost Accountant

A Cost Accountant examines reviews and prepares final documents. They are even specialized in managing all financial aspects of a business. Cost Accountants are associated with Supply chains and profitability analysis.

Required Education

Graduation in any stream preferably Accountancy and Finance

Courses to Become a Cost Accountant

CMA
Their CMA course is conducted in three levels as CMA Foundation, CMA Intermediate and CMA Final. Admissions in CMA can be done directly to Intermediate courses if the candidate is a graduate. If the candidate is a school pass out that is 10+2 pass out then they can take admission in the foundation course. CMA exams are conducted twice a year mainly in June and December.

Level Name	Eligibility	Course Fee
CMA Foundation	Candidates must have qualified 10+2 Graduates can directly apply for CMA Intermediate.	4000
CMA Intermediate	Students must have passed 10+2 They must have completed CMA Foundation Course Candidates who have qualified ICSI Foundation or ICAI Intermediate can apply for this course Applicants will have to complete CSS for 3 days and Computer Training for 100 hours	20,000
CMA Final	Candidates who have passed CMA intermediate can apply	17,000

CFA

A Chartered Financial Analyst (CFA®) charter is a designation given to those who have completed the CFA® Program and completed acceptable work experience requirements.

The CFA Program is a three-part exam that tests the fundamentals of investment tools, valuing assets, portfolio management, and wealth planning. The CFA Program is typically completed by those with backgrounds in finance, accounting, economics, or business. CFA charterholders earn the right to use the CFA designation after program completion, application, and acceptance by CFA Institute. CFA charterholders are qualified to work in senior and executive positions in investment management, risk management, asset management, and more.

Eligibility Requirements for CFA exam
You can take the exam as long as you :

Have a bachelor’s (or equivalent) degree, or be in the final year of your bachelor’s degree at the time of registration, or have four years of qualified, professional work experience or a combination of work/college experience that totals four years
Meet the professional conduct admission criteria
Can take the exams in English
Have a valid international travel passport

CFA Level 1 topics and their weightage

The Level I study program emphasizes tools, inputs and includes an introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.
Ethical and Professional Standards-15%, Quantitative Methods-12%, Economics-10%, Financial Reporting and Anlaysis-20%, Corporate Finance-8%, Portfolio Management-5%, Equity-10%, Fixed Income-12%, Derivatives-5%, Alternative Investments- 3%.

CFA Level 1 Exam Format

Level 1 Exam is 3 hours long and is divided into morning and afternoon sessions
240 total multiple-choice questions, 120 in the morning session of the exam and 120 in the afternoon session. Each multiple-choice question is free-standing (not dependent on other questions) and has three possible answers: A, B, and C. All questions are equally weighted and there is no penalty for guessing
Level 1 can be taken in June and December

Journal entry of cash Discount received and Cash Discount allowed

29Jul, 2021

Journal entry of Discount received and Discount allowed in Accounting

26Jul, 2021

How to make Fixed deposit entry in Tally Prime

What are Fixed deposit ?

Fixed deposit is an investment instrument which allows investors to put their idle money into and turn it into guaranteed returns

Make a fixed deposit with the bank Rs 100000 Interest receivable Rs. 10000 per annum. Fixed Deposit mature after three years.

Journal Entry for the above will

Fixed Deposit A/c	100000
To Bank A/c	100000
(being fixed deposit made with tha bank

At the end of accounting year I year

We have to make entry of interest earned (Accrued Interest on FD)

Accrued Interest on FD A/c	10.000
To Interest on FD A/c	10,000
(being interest fixed deposit

Similar entry in II year

Accrued Interest on FD A/c	10,000
To Interest on FD A/c	10,000
(being interest fixed deposit

On maturity of Fixed deposit

Bank A/c Dr	130,000
To Interest on FD A/c	10,000
To accrued interest on FD A/c	20,000
To Fixed Deposit A/c	100,000

Ledger creation for Fixed Deposit in Tally Prime

Go to the gateway of tally prime >Create > ledger In name Type: Fixed deposit
Under: Fixed Deposit
save the ledger / Ctrl+A

Similarly, create a ledger of Bank

Go to the gateway of tally >ledger>Create

Type Name: Bank
Under: Bank

also create ledger Interest on FD

Type : Interest on FD
Under : Indirect Income
Create ledger Accrued interest on FD
Type : Accrued Interest on FD
Under :Current Asset

As shown in the picture bellow.

Go to gateway of tally >accounting voucher > F5 payment create entry of FD .

Fixed Depsit Account Dr 100000

To Bank A/c 100000

(being Fixed deposit made with the bank)

Accrued Interest on Fd entry in Tally Pime.

Accrued Interest on FD is Current Asset means income earned but not received therefore it will be shown at end the accounting year .

Go to gateway of tally > accounting Voucher > F7

Accrued interest on FD A/c 10000

To interest on FD A/c 10000

(being interest on FD earned but not receive)

Simialry create entry in the next year /

On date of Maturity FD entry

Go to gateway of tally > accounting Voucher > F7

On maturity of Fixed deposit

Bank A/c Dr	130,000
To Interest on FD A/c	10,000
To accrued interest on FD A/c	20,000
To Fixed Deposit A/c	100,000

23Jul, 2021

What is the meaning of contingent liabilities and its examples ?

A contingent liability is a liability or a potential loss that may occur in the future depending on the outcome of a specific event.

A contingent liability is recorded if the contingency is likely and the amount of the liability can be reasonably estimated.

If the amount can be estimated, the company sets aside that amount separately to be paid out when the liability arises. Contingent liability as a term does not apply only to companies, but to individuals as well.

Suppose a company might be in the middle of a lawsuit and your lawyer thinks that the other party has a strong case which could potentially lead to damages worth Rs 500000.

In that case, the company would book that amount as contingent liability on its balance sheet.

On the other hand, if the lawyer or the legal department thinks that the other party does not have a very strong case in hand. They would advise the firm not to make any provision of a contingent liability.

When the probability of a contingent liability is low then is no disclosure is required in the books of accounts.

Accounting Rules for Contingent Liability

A contingent liability should not itself be recognized in the statement of financial position.
A contingent liability should be disclosed only under notes to financial statements unless the possibilities of a transfer of economic benefits are remote.

Example of contigent liabilities

contingent liabilities example

Guarantees and counter guarantees are given by a company..
Product warranty.
Shareholders guarantee.
Letter of credit issued.
Potential adverse judgment (cases regarding any financial dispute).

When to Recognize a Contingent Liability?

Probable

Under this scenario, contingent Liability is recorded only when it is probable that the loss will occur, and you can reasonably estimate the amount of loss. Here, “Probable” means that the future event is likely to occur.

Therefore, it is also important to describe the liability in the footnotes that accompany the financial statements.

Possible

Here, contingent liabilities are recognized only when the liability is reasonably possible to estimate and not probable.

Here, “Reasonably possible” means that the chance for occurrence of an event is more than remote but less than likely.

To further simplify, the loss due to future events is not likely to happen but not necessarily be considered as unlikely. It could be a situation where the liability is probable, but the amount couldn’t be estimated.

Under this situation, the preparers of financial statements should disclose the existence of contingent Liability in the notes accompanying such financial statements

Remote

In this scenario, the contingent liability is not recorded or disclosed if the probability of its occurrence is remote. Here, ‘remote’ means the contingencies aren’t likely to occur and aren’t reasonably possible.

Journal entry for contingent liability

Taking the example lawsuit filed on X company where company violating rules. customer file a lawsuit of Rs. 3000000 and in final judgment company pay Rs 1000000 to its customer.

The lawsuit was considered as a contingent liability in the

.

Prepare journal entries for the year ending 2021, assuming

it is probable that X company will be liable to pay an amount of Rs 2000000

Prepare journal entries for the year ending 2021, assuming it is not probable that X company will be liable to pay any amount.

Considering no other pending lawsuits prepare journal entries for the year ending 2021, where X Company lost the lawsuit and has to pay Rs 1000000.

#1 – The Amount is Estimated, and the likelihood of Occurrence is High

Contingent Liabilities Example 1

Lawsuit loss A/c dr	2000000
To law suit liability	200000

#2 – The Probability of Occurrence is Very Less or Nil

Journal entries will not be passed. The loss is not accrued because it is not probable that liability will arise soon.

Full disclosure should be made in the footnotes of the financial statements because liability might not arise shortly, but there is a possibility of its occurrence in later years.

#3 – Payment of Lost Lawsuit

Lawsuit liability dr	1000000
To cash A/c	1000000

Where are the contingent liabilities shown in a balance sheet?

Qualifying contingent liabilities are recorded as an expense on the income statement and a liability on the balance sheet.
If the contingent loss is remote, meaning it has less than a 50% chance of occurring, the liability should not be reflected on the balance sheet and shown in the foot note of balance sheet.

examples of contingent liabilities

Product Warranties

Electronic device retailers typically provide a one-year guarantee with their items. While the business believes that the majority of items will operate well within the warranty term, they must take into consideration any potential defects or issues that might develop after the sale. Until consumers actually file warranty claims, the expense of fulfilling those claims will be regarded as a contingent obligation.

Pending Legal Claim

Presently Pending Lawsuits: Former employees are suing a corporation in several instances for wrongful termination. Since the results of these lawsuits are unpredictable, the company’s legal team makes an educated guess as to its probable responsibility based on legal counsel and previous settlements in instances that are comparable to this one. The projected liability for these claims would be recorded as a contingent liability until the lawsuits are settled or resolved.

Guarantees and Indemnifications:

A manufacturer assures a customer that a piece of equipment it sells will function properly for three years. The business could have to offer a replacement or a refund if the machine fails during the warranty term. Until the machine’s performance is examined the possible expense of maintaining this guarantee is considered a contingent responsibilities.

Environmental Cleanup Costs:

A business owns a manufacturing that uses toxic substances to function. Environmental pollution is a possibility even when the firm complies with environmental laws. The business sets aside money for expected cleaning expenses, but the projected cleanup expense is still considered a contingent liability until there is a real contamination occurrence.

Pending Tax Disputes:

A company is under review by tax authorities, who believe that certain tax deductions were incorrectly claimed in previous years. The company disagrees with the tax authorities’ position and is fighting the dispute. The potential tax liability, if the company loses the dispute, would be considered a contingent liability until a final resolution is reached.

Loan Guarantees:

A company provides a guarantee for a loan taken by a subsidiary or another entity. If the borrower defaults on the loan, the company may be required to step in and fulfill the obligation. The potential liability under the loan guarantee is treated as a contingent liability until the actual default occurs.

These are just a few examples of contingent liabilities. It’s important for businesses to carefully assess and disclose these potential obligations in their financial statements to provide transparency to investors and stakeholders about the risks the company may face.

6Jul, 2021

What is the journal entry for cheque dishonoured?

When a business received a cheque it debited its bank account and credited it party from which cheque is received.

Now understand it with example

Example 1

Sales made to Mr Mohan by cheque Rs 10,000.

Journal entry of same will be :

Bank A/c Dr	10,000
To Sales A/c	10,000
(being goods sold)

Bank is Personal A/c as per Personal account Debit the receiver

Sales is Nominal A/c as per Nominal account Credit all income and
gains Sales is income.

Cheque Dishonored by Bank

The cheque received from Mohan dishonoured and the bank has charged Rs 550 as bank charges.

Now this Rs 550 charge is levied by the bank to us because of Mohan therefore that needs to be taken from Mohan with the cheque amount

Cheque amount entry

Mohan A/c Dr	10,000
To Bank A/c	10,000
(being cheque dishonoured )

· This is an adjustment entry where we Debit Mohan as to make him our debtors.

· Bank is credited because we adjusted the bank which we debited earlier to credit it now to make adjustments in our bank account.

The bank charged of a dishonoured cheque need to taken from Mohan.

Bank charges A/c Dr

550

To Bank

550

(being cheque

dishonoured charges )

Adjustment of bank Charges.

Mohan Dr	550
To Bank charges A/c	550
(being cheque dishonoured charges to be taken from Mohan)

At the end Mohan is liable to pay us Rs 10,500.

Ledger of Party in Dishonoured cheque

Ledger of Mohan in Dishonor of cheque .

Particular	Amount	Particular	Amount
To Bank	10000
To bank Charges	550
		By bal C/d	10,550
	10,550		10,550

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4Jul, 2021

Complete Tutorial on Payroll Accounting in Tally Prime

What is Payroll Acounting?

Payroll, is a process. where businesses generally compute and withhold government taxes like social security and individual income taxes from an employee’s salary. Many companies also have benefit plans like health insurance, which include deductions of premiums from its employees’ salaries according to employee customization, adding another layer of activity for payroll processing.

Components of Payroll process

Allowances
Allowances are categories of expenditures in India that are not taxable, provided they match certain specifications and do not exceed a certain amount.

Allowances in India include those for:

House rent
Transport
Medical
Meals
Leave travel
Education
Special allowance.

Component of salary

Basic salary

Basic salary is a fixed amount paid to employees by their employers in return for the work performed or performance of professional duties by the former. Base salary, therefore, does not include bonuses, benefits or any other compensation from employers. As the name suggests, basic salary is the core of the salary of an employee.

Allowances

Dearness Allowance

Dearness Allowance is cost-of-living change allowance which the government pays to the employees of the public sector as well as pensioners of the same. DA component of the salary applies to both employees in India and Bangladesh.

House Rent Allowance

HRA or House Rent Allowance is a salary component paid by employer to employees for meeting the accommodation expense of renting a place for residential purposes. HRA forms an integral component of a person’s salary. HRA is applicable to both salaried as well as self-employed individuals.

They account HRA for salaried people for under section 10 (13A) of the Income Tax Act under rule 2A of Income Tax rules. Similarly, self-employed individuals are not considered for HRA exemption under this section but can claim tax benefits under section 80GG of the Income Tax Act.

Conveyance Allowance –

Conveyance allowance, also known as transport allowance, is a kind of allowance offered by employers to their employees to compensate for their travel expense to and from their residence and workplace. Note – In Union Budget 2018, a standard deduction of Rs. 40,000 has been introduced instead of transport (Rs 19,200) and medical (Rs 15,000) allowances.

Leave Travel Allowance –

Leave travel allowance is eligible for tax exemption. It is offered by employers to their employees to cover the latter’s travel expense when he or she is on leave from work. The amount paid as leave travel allowance is exempt from tax under Section 10(5) of Income Tax Act, 1961. Leave travel allowance only covers domestic travel and the mode of travel needs to be air, railway or public transport.

Medical Allowance –

Medical allowance is a fixed allowance paid to the employees of an organization to meet their medical expenditure. Note – In Union Budget 2018, a standard deduction of Rs. 40,000 has been introduced in lieu of transport (Rs 19,200) and medical (Rs 15,000) allowances.

Books and Periodicals Allowance –

Books and periodicals allowance is a type of allowance provided to employees for helping them meet the expenses associated with purchase of books, periodicals and newspapers. It is tax exempt to the extent of actual expenditure incurred towards purchase of books and periodicals.

Professional Tax

Professional tax is a tax levied on the income earned by salaried employees and professionals, including chartered accountants, doctors and lawyers, etc. by to the state government. Different states have varying methods of calculating professional tax. The maximum amount that is payable in a year is Rs. 2,500.

Gratuity

Gratuity is a lump sum benefit paid by employers to those employees who are retiring from the organization. This is only payable to those who have completed 5 or more years with the company. The gratuity amount is paid in gratitude for the services rendered by the individual during the period of employment. According to the Payment of Gratuity Act, 1972, gratuity is calculated as 4.81% of the basic pay. Most firms with a workforce of 10 or more employees come under the Act.

PF Contribution

The employer’s contribution is divided into the below mentioned categories:

Employees Provident Fund 3.67
Employees’ Pension Scheme (EPS) 8.33
Employee’s Deposit Link Insurance Scheme (EDLIS) 0.50
EPF Admin Charges 1.10
EDLIS Admin Charges 0.01

It is mandatory for the employee and the employer to make a EPF contribution. Each make a 12% contribution of the employees’ dearness allowance and basic salary towards EPF. Given below are the details of the employees’ and employers’ contribution towards EPF.

The employer deducts employee’s contribution towards EPF – 12% of the employee’s salary on a monthly basis for contribution towards EPF. The entire contribution goes towards the EPF account.
Employer’s contribution towards EPF – The employer also contributes 12% of the employee’s salary towards EPF.

To understand methodology employed in the ET EPF Calculator, let us take the following case:
1. Employees’ Basic Pay + DA: Rs 50000
2. Employee contribution towards EPF: 12%*50000 = Rs 6000
3. Employer contribution towards EPF = 3.67% of 50000 = 3.67%*50000 = Rs 1835…. (A)
4. Employer contribution in Employee Pension Scheme (EPS): 8.33% * 50000 = Rs 4165 …. (I)
5. Employer contribution in EPS on the threshold income of Rs 15000: 8.33% of 15000 = Rs 1249.50 …. (II)
6 Excess contribution of employer towards EPS above the threshold (I) – (II): Rs 4165 – Rs 1249.50 = Rs 2915.50 …. (B)
7. The excess amount in (B) is added to the employer contribution towards EPF in (A) = 2915.50+ 1835 = Rs 4750.50

Hence, the final employer contribution towards EPF will be Rs 4,750 (the result is rounded off to the nearest decimal place as stipulated by EPFO).

What is ESIC scheme

What is esic sheme
If a company has 10 or more employees (20 in case of Maharashtra and Chandigarh) whose gross salary is below Rs. 21,000 per month, then the employer is required to avail ESIC scheme for such employees. The employer’s contribution will be 4.75% of gross salary, whereas the employee’s contribution will be 1.75% of gross salary.

5 Steps to Payroll

Payroll in tally prime

How to maintain payroll in Tally prime

How to enable payroll in tally prime

Go to gateway of tally prime>Press Alt+K >F12
Show all features >Set to YES
Maintain Payroll >Yes.
Enable payroll statutory> Yes

Statutory details Screen

1)Company Code :Enter provident fund code no of the company issued by the department.

Company Account Group Code :Enter the provident fund code of the company issued by the department.

Company Security Code : Enter the security code of the company issued by the department.

Employee state insurance :

3) company code :Enter the ESI code of the company issued by the department.

4)ESI Branch Office : Enter the nearest ESI office under whose authority the company is located.

5) Standard working days per month .Enter the constant pay period to be considered for ESI calculation .If this field is left blank the calculation is done based on the calendar day sin each month.

6)tax deducted and collected account number :specify th e10 digit TAN assigned to the employer .

7 Income tax circle /ward specify the name of the Income tax circle to which the employer is associated.

Diductor type : Select Government for a company belonging to central or statement government for all others select other.

9Name of person responsible :Enter the name of the person Responsible for TDS deduction in the company

11

Destination specify the official Destination of the person responsible for TDS deduction.

Press Enter to Accept the Screen.

Press Y or Enter to Accept the Screen.

How to create payroll Masters

Go to gateway of Tally>Create>payroll Master

Create Payroll Masters

Employee Group Master

Business with multiple Department Division function or Activities may create the required employee group and classify individual employees under specified group .Production marketing stores .Support or particular group of employees such as managers supervisors sub staff and so on.

To create sales Employee Group

Go to gateway of Tally > Create

Payroll Master >Employee group
In name Type : Supervisor Highly skilled
Under : Primary
Define salary detail : Set to Nl

Create Employee Masters In Tally Prime

S.no	Employee Name	Department	Date of joining
1	Prakta Kulkarni	Supervisor (Highly Skilled)	1/4/2020
2	Shubham Negi	Security Guard (skilled)	1/5/2020
3	Mahesh Kumar	Administration	1/5/2020

Go to Gateway of Tally > create > in Payroll Masters> Employee
Create the employee as mention in screen above

Press enters accept the screen
Similarly create the employee masters for other employees with their department.

Payroll Units

As per the company requirement Unit of Measurement are created for the calculation of pay head. The unit can be created into two types 1) Simple Unit 2)compound Unit

Simple unit contains day week, month hours pcs etc. Compound Units include the unit which combination of two simple units like hours of 60 minutes. The month of 26 days Days of 8 hours etc.

Create the following unit as mention below

Hours
Minutes
Hrs of 60 minutes

How to create a simple payroll unit in Tally Prime

Go to the gateway of tally>payrioll info >Units(working period)>create

In unit creation Screen

Type:Simple
Symobol:hrs
Formal Name :Hours
Number of decimal places :2

Press enter to accept the unit creation screen

create Minutes as simple units

Type: Simple
Symbol: mins
Formal: Minutes
Number of decimal places :0

Create Compound Payroll Unit in tally Prime

Press Backspace and select compound as the type of Unit

Type compound
First unit: Hrs
Of:60
Second Unit:Mins
the complete compound Unit screen appears as shown below

Attendance /Production Types

Attendance /Production types masters are used to record the nature of attendance production ie time and work rate . In tally prime, you can create attendance type based on time such as present and absent or based on work-based production units such as piece production.

Create the following attendance type for company.

Name	Under	Attendance /production type	Period days
Present	Primary	Attendance/leave with pay	Days
Absent	Primary	Leave without pay	Days
Overtime	Primary	Production	Hrs of 60 mins
Calendar Month	Primary	User defined calendar Type	Days

To create present attendance type

Go to the gateway of tally >create >attendance /production type

Under: Primary

Attendance Type : Attendance /leave with pay

Period type:days automatically selected

The completer attendance production creation screen appears as shown.

Press y to accept

Similarly, create remaining attendance and production as mentioned in table.

Pay heads

Pay heads are treated as expense liability with the employers point of view it is considered as Income /earning and deductions.

Example of pay head includes Basic pay ,Dearness Allowance ,House rent Allowance, Uniform allowance ,etc. It also includes deductions employee provident funds EPS employees state insurance ESI professional tax .

Basic Salary pay head in Tally prime

	Percentage	Prajka Kulkarni	Mahesh Kumar	Shubham Negi
Basic pay	1 day	949.52	784	714
House Rent Allowance	16% of Basic Plus VDA
Bonus	8.33% of Basic plus VDA
Uniform Outfit Allowance	5% of Basic Plus + VDA
DA	10% basic
Uniform Washing Allowance	3% of Basic Plus VDA
Employee Provident Fund	12% of basic + VDA
Employer EPS @ 8.33%	Upto 15000 8.33% 15000 above 1249.5
Employer PF contribution 3.67%	3.67% of basic + DA
EDLI Contribution .5%	.5% of PF
PF admin Charges	.5% of PF

Go to gateway of Tally >Create >Payroll Master > Pay head
In name Type :Basic Salary
In pay head Type :Earning from Employee
Income Type :Fixed
Affect net salary :Yes
name to be displayed in payslip : automatic

If income tax and gratuity applicable

Use for calculation for gratuity Yes
Set /alter income tax details :Yes
A new screen appear
Select Income tax component :Basic Salary
Tax calculation basis :On Projected Value
Deduct TDS across the period Yes

HRA pay head in Tally Prime

Go to gateway of Tally >Create >Payroll Master > Pay head

In name Type :HRA
In pay head Type :Earning from Employee
Income Type :Fixed
Income Type :Fixed
Affect net salary :Yes
name to be displayed in payslip : automatic

Use for calculation for gratuity No
Set /alter income tax details :Yes

A new screen appear

Select Income tax component :House Rent Allowance
Tax calculation basis :On Projected Value
Deduct TDS across the period Yes
Affect net salary :Yes
Calculations Type :As computed Value
Caluation period :Month :
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

a new screen appear

Select :Basic Salary +DA
Effective from :Mention date 1/4/2021
In slap select :percentage
Value:16%

Dearness Allowance pay head

Go to gateway of Tally >Create >Payroll Master > Pay head
In name Type :DA
In pay head Type :Earning from Employee
Income Type :Fixed
Under :Indirect
Affect net salary :Yes
name to be displayed in payslip : automatic

Use for calculation for gratuity :yes
Set /alter income tax details :Yes

A new screen appear

Select Income tax component :Dearness Allowance (considered for retirement benefits)
Tax calculation basis :On Projected Value
Deduct TDS across the period Yes
Affect net salary :Yes
Calculations Type :As computed Value
Calculation period :Month
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

A new screen appear : Select : Basic salary

Select :Basic Salary
Effective from :Mention date 1/4/2021
In slap select :percentage

Value:10%

Bonus

Go to gateway of Tally >Create >Payroll Master > Pay head
In name Type :Bonus
In pay head Type :Earning from Employee
Income Type :Fixed
Under :Indirect
Affect net salary :Yes
name to be displayed in payslip : Bonus Automatic

Use for calculation for gratuity :no
Set /alter income tax details :Yes

A new screen appear

Select Income tax component :Bonus
Tax calculation basis :On Projected Value
Deduct TDS across the period No

Now on main screen

Calculations Type :As computed Value
Calculation period :Month
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

A new screen appear : Select : Basic salary

Select :Basic Salary
Effective from :Mention date 1/4/2021
In slap select :percentage

Value:10%

Employee PF deduction 12%

Gateway of Tally > Create > type or select Pay Heads.
Alternatively, press Alt+G (Go To) > Create Master > type or select Pay Heads.
In case the master is inactive, you will be prompted to enable the payroll feature for your Company. Select Yes or press Y to proceed.
Enter the name of the Pay Head in the Name field.
Select Employees’ Statutory Deductions as the Pay Head Type from the List of Pay Head Types.
Select PF Account (A/c No. 1)
in the Statutory Pay Type field.
Select Current Liabilities from the List of Groups in the Under field.
By default, Affect Net Salary is set to Yes. Type No,
if you do not want this component to be included in the pay slip.
By default, the pay head component name entered in the Name field appears in the pay slip.
Enter the Name to be display in Payslip if you want to change the default pay head component name.
By default, the Calculation Type field is set to As Computed Value, and the Calculation Period field is set to Months.
Select Normal Rounding from the List of Rounding Methods, and type 1 as the rounding Limit.
Select On Specified Formula, from the Computation On list, in the Compute field.
The Computation on Specified Formula sub-screen appears.
In the Pay Head column, select Basic Pay from the List of Pay Heads and select End of List to return to Pay Head Creation.
Enter the desired date in the field Effective Date field, when the PF deduction begins.
Select Percentage from the List of Slabs in the Slab Type field.
Enter the required percentage for PF in the Value Basis field.
Accept the screen. As always, you can press Ctrl+A to save.

Employer EPS @ 8.33%

Go to gateway of Tally >Create >Payroll Master > Pay head In name Type :Employer EPS @8.33%
In pay head Type :Employer statutory Contribution
Under :Indirect Expense
Affect net salary :Yes
name to be displayed in payslip : Employer EPS@8.33%

Calculations Type :As computed Value
Calculation period :Month
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

A new screen appear : Select : Basic salary

Select :Basic Salary + DA
Effective from :Mention date 1/4/2021
In slap select :percentage

Value:8.33%

1249

Employer PF contribution 3.67%

Go to gateway of Tally >Create >Payroll Master > Pay head In name Type :Employer EPS @3.67%
In pay head Type :Employer statutory Contribution
Statutory pay type :EPF account(a/c no 10)
Under :Indirect Expense

Affect net salary :Yes
name to be displayed in payslip : Employer EPS@3.67%
Calculations Type :As computed Value
Calculation period :Month
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

A new screen appear : Select : Basic salary

Select :Basic Salary + DA
Effective from : Mention date 1/4/2021
In slap select :percentage

Value:3.67%

Uniform Outfit Allowance

Go to gateway of Tally >Create >Payroll Master > Pay head In name Type :Uniform Outfit Allowance
In pay head Type :Earning for Employee
Under :Indirect Expense
Affect net salary :Yes
name to be displayed in payslip : Uniform Outfit Allowance
Use calculation for gratuity : No
Set Alter Tax detail :Yes

A new screen Appears

Select : Other earning Allowance (Fully exempted)

Calculations Type :As computed Value
Calculation period :Month
Normal rounding :limit :1

computation Information

Computer :On specific formula

Specified formula

A new screen appear : Select : Basic salary

Select :Basic Salary + DA
Effective from :Mention date 1/4/2021
In slap select :percentage

Value:10%

Uniform washing Alllowance

Go to gateway of tally > create > Now similarly as created Uniform outfit allowance create Uniform Washing Allowance the only difference is percentage which need to set 3%. For more see the picture s below.

EDLI contribution 5%

Go to gateway of Tally >Create >Payroll Master > Pay head In name Type : EDLI Contribution 5%
In pay head Type :
Employee others Charges
Statutory pay Type :EDLI contibution A/c no 21
Under : Current Liabilities
Affect net salary : no
Calculated Type :As computed Value
calculation period :month

A new screen Appears

Select : Other earning Allowance (Fully exempted)

Calculations Type :As computed Value
Calculation period : Month
Normal rounding:limit :1

computation Information

Computational information :On PF gross
percentage :.50%.

PF Admin Charges

Go to Gateway of Tally >Create >Payroll Master > Pay head In name Type: PF admin Charges
In pay head Type :
Employee others Charges
Statutory pay Type :Admin charges A/c (2)
Under : Current Liabilities
Affect net salary : no
Calculated Type :As computed Value
calculation period :month

A new screen Appears

Select : Other earning Allowance (Fully exempted)

Calculations Type :As computed Value
Calculation period : Month
Normal rounding:limit :1

computation Information

Computational information:On PF gross
percentage :.50%.

Create Pay structure of Employer

	Percentage	Prajka Kulkarni	Mahesh Kumar	Shubham Negi
Basic pay	1 day	949.52	784	714
House Rent Allowance	16% of Basic Plus VDA
Bonus	8.33% of Basic plus VDA
Uniform Outfit Allowance	5% of Basic Plus + VDA
DA	10% basic
Uniform Washing Allowance	3% of Basic Plus VDA
Employee Provident Fund	12% of basic + VDA
Employer EPS @ 8.33%	Upto 15000 8.33% 15000 above 1249.5
Employer PF contribution 3.67%	3.67% of basic + DA
EDLI Contribution .5%	.5% of PF
PF admin Charges	.5% of PF

Salary Set up at Group Level

Go to gateway of tally >alter>

Name : Supervisor Highly Skilled

Under : Primary

Define salary :yes

a new screen will open

Type Effective date :1/4/21

Select :Basic Salary

Rate:949.69

similarly select other pay head as mention in the picture below.

Salary set up at employee level

If you set up salary at group level then you can set up salary at employee level just to copy the detail from group as shown in the picture below.

Create pay head Salary payable

Go to gateway of tally >Payroll Master >Pay head >
Create >Salary Payable >
Pay head Types : Not Applicable
Under Current Liability

Attendance

Gateway of Tally > Vouchers > press F10 (Other Vouchers) > type or select Attendance.
Alternatively, press Alt+G (Go To) > Create Voucher > press F10 (Other Vouchers) > type or select Attendance.
Press F2 (Date) to change the date.
Select the employee whose attendance you want to record from the List of Employees.
Select the Attendance/Production Type from the list.
Enter the Value.
Select End of List from the List of Employees.
Accept the screen. As always, you can press Ctrl+A to save.

Processing Salary (Payroll)

Gateway of Tally > Vouchers > press Ctrl+F4 (Payroll).
Alternatively, Alt+G (Go To) >Create Voucher > press Ctrl+F4 (Payroll).
Press F2 to change the Voucher Date.
Press Ctrl+F to select the Payroll Autofill in the Autofill screen.
Type of transaction: select the Type of Autofill as Payroll Autofill.
Process for: select the Salary in the Process for field.
From (blank for beginning): enter the From Dates.
To (Blank for end): enter the To Dates.
Employee/Group: select the Employee/Group from the List of Employees/Group, whose salary you want to process.
Sort by: Select the sorting option in the Sort by field.
Payroll/Bank/Cash Ledger: Select the appropriate Payroll Ledger from the List of Ledger Accounts.
Note: If the salary payment is done through cash, you can select Cash as Payroll Ledger.
Enter the User Defined Pay Head values. such as Variable Pay or Salary Advance Deductions.
Enter the Narration, if any. By default, the payroll voucher shows the pay period in the Narration field.
Accept the screen. As always, you can press Ctrl+A to save.

PF contibution Voucher entry

Go to Gateway of Tally >voucher entry

Press CTRL +F
A new screen appears
Select: payroll auto fill
process for: PF contribution
select date
sort by employee
payroll: select bank

2Jul, 2021

Purchase a/c Dr.	10,000
To Ravi.	10,000
(being goods purchase from Ravi)

Ravi Dr	10,000
To cash A/c	9,500
To discount Received A/c	500
(being cash paid to Ravi and discount received)

Ramesh a/c Dr.	10,000
To sales a/c	10,000
(being goods sold to Ramesh)

Cash Dr	9,500
Discount Allowed A/c	500
To Ramesh	10000
(being cash received and discount allowed to Ramesh)

Ramesh Books		Mahesh Books
Particular	Amount	Particular	Amount
When a cheque is issued		When a cheque is received
Mahesh Dr.	10,000	Bank Dr.	9800
To bank A/c	9800	Discount Allowed Dr	200
To discount received A/c	200	To Ramesh	10,000
(being cheque paid )		(being Cheque receive)
When cheque is dishonored		When cheque is dishonored
Discount received A/c Dr	200	Ramesh A/c Dr	10,000
Bank A/c Dr.	9800	To Bank A/c	9800
To Mahesh	10,000	To discount Allowed	200
(adjustment of discount)		(adjustment of discount)

Monthly Archives: July 2021

Accounting courses in 2021

Why do Accounting courses?

Chartered Accountant

Cost Accountant

CFA

Eligibility Requirements for CFA examYou can take the exam as long as you :

What is a discount Received in accounting?

What is the Journal Entry for Discount Received?

What is a discount Allowed in accounting?

What is the Journal Entry for Discount Allowed?

Comparsion of Journal Entry

Discount in case of dishonored of cheque

The difference between discount received and discount allowed.

FAQ

Do we make trade discount journal entry ?

How to make Fixed deposit entry in Tally Prime

What are Fixed deposit ?

Ledger creation for Fixed Deposit in Tally Prime

On date of Maturity FD entry

Accounting Rules for Contingent Liability

Example of contigent liabilities

contingent liabilities example

When to Recognize a Contingent Liability?

Probable

Possible

Journal entry for contingent liability

Where are the contingent liabilities shown in a balance sheet?

examples of contingent liabilities

Product Warranties

Pending Legal Claim

Guarantees and Indemnifications:

Environmental Cleanup Costs:

Pending Tax Disputes:

Loan Guarantees:

What is the journal entry for cheque dishonoured?

Cheque Dishonored by Bank

Ledger of Party in Dishonoured cheque

Complete Tutorial on Payroll Accounting in Tally Prime

What is Payroll Acounting?

Component of salary

Basic salary

Allowances

Dearness Allowance

House Rent Allowance

Conveyance Allowance –

Leave Travel Allowance –

Medical Allowance –

Books and Periodicals Allowance –

PF Contribution

What is ESIC scheme

5 Steps to Payroll

Payroll in tally prime

How to maintain payroll in Tally prime

How to enable payroll in tally prime

How to create payroll Masters

Payroll Units

Attendance /Production Types

Pay heads

Basic Salary pay head in Tally prime

HRA pay head in Tally Prime

Dearness Allowance pay head

Bonus

Employee PF deduction 12%

Employer EPS @ 8.33%

Employer PF contribution 3.67%

Uniform Outfit Allowance

Uniform washing Alllowance

EDLI contribution 5%

PF Admin Charges

Create Pay structure of Employer

Salary Set up at Group Level

Salary set up at employee level

Create pay head Salary payable

Attendance

Processing Salary (Payroll)

PF contibution Voucher entry

What are Fictitious Asset ?

Fictitious assets meaning

Example of Fictitious Assets

Eligibility Requirements for CFA exam
You can take the exam as long as you :