CHAPTER-1

INTERNSHIP

Introduction

Internship is a job oriented process which aim to develop special skills related to the job. Through
internship process effort is made to increase practical skill with theoretical knowledge which
student got in formal educational institute.

The period of internship varies depending upon the nature of the job, size of the organizations etc.
For instance fresh engineering graduates or diploma holders are moved from workshop to
workshop to work with the seniors, before they are placed on a particular job. This period varies
from six months to one year.

An internship is an agreement between intern and the organization for a fixed period of time,
where interns agree to work for them and they agree to mentor and teach them many companies
go on to hire their successful intern’s for full time employment

Definition

Timothy Noah in different words terms internship as an agreement between the industry and
a candidate for a stipulated period of time. This time period usually extends from 2 to 6 weeks
during semester or summer vacation in case of vacation training. Internship definitely adds to the
knowledge student has gained by offering an insight into that particular field or career.

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Types of Internship

1. Paid Internship

There are definite fields of employment that are more likely to have remunerated internships.
Such fields include as medicinal field, construction site, science, engineering, law, business,
accounting, finance, technology and mass media and advertise.

2. Unpaid Internship

Many internship is done voluntarily or to just gain work experience. These types of
internships can be available from The institute of costs and works accountant of India, The
institute of chartered accountants of India, sports club, government authority, non for profit
organization.

3. Typical Internship

A typical internship will last for more than six weeks and less than twelve weeks. Main
objective of typical internship is to earn college credit for particular semester if interns are still
being educated.

4. Job Shadowing Internship

Job shadowing internship normally last for one or two weeks. This type of internship is more
often unpaid and they do not offer any college credit if intern undertake during any semester. It is
undertaken by intern to acquire some specific or technical skill.

5. Cooperative Internship

Cooperative internship normally last for one entire semester or one particular year and they
are full time during academic year. Intern who goes for cooperative internship are more likely to
be accessible a full-time job.

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6. Compensated and Non Compensated Internships

Private or large size company has adequate amount of capital so paid internships are more
popular in large service sector or in private sector. Intern gets first-hand experience of learning in
internship, so when they go for future job they use right method and right technique which help
organization to develop his business.

7. Internships for Credit

In many bachelor and master degree programmed like M.B.B.S., M.M.S., B.C.A. and
M.C.A. etc. internship is a part of curriculum. On the basis of internship programmed report
student get credit for its semester. Therefore student go for part time internship programmed
during academic year which normally last for six weeks and full time internship during summer
holiday.

8. Not for Profit Internships

Internship for a not for profit association is generally different than working in an
organization for profit. In a non- profit organization, there are no stockholders and no one shares
in the annual profits or losses that are determined by the organization each year.

9. Summer Internships

Many interns go for internship programmed during their summer break, such kind of
internship often referred as summer internship. It is normally last for one and half or two months.
Many interns got credit for its semester if they undergone for summer internship.

10. Service Learning

Service learning requires a combination of meeting specific learning objectives by

completing some type of community service work. It is different from other forms of experiential
education in that it requires that the recipient and the provider of the service both benefit in some
way and are changed equally by the experience.

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11. Co-Operative Education

Internship and co op experience differ from each other in the term of tenure. Duration of
Internships is generally six weeks to twelve weeks, on other side co operative education last for
one or more than one years. Co-ops and internships are both incomparable civilization for learners
to put on precious facts and abilities in their field of interest to develop professional’s links with
professionals who already working in the field.

ACCOUNTING AND AUDITING

Introduction

In all activities (whether business activities or non-business activities) and in all

organizations (whether business organizations like a manufacturing entity or trading entity or
non-business organizations like schools, colleges, hospitals, libraries, clubs, temples, political
parties) which require money and other economic resources, accounting is required to account for
these resources. In other words, wherever money is involved, accounting is required to account
for it. Accounting is often called the language of business. The basic function of any language is
to serve as a means of communication. Accounting also serves this function.

Meaning of Accounting

Accounting, as an information system is the process of identifying, measuring and

communicating the economic information of an organization to its users who need the
information for decision making. It identifies transactions and events of a specific entity. A
transaction is an exchange in which each participant receives or sacrifices value (e.g. purchase of
raw material). An event (whether internal or external) is a happening of consequence to an entity
(e.g. use of raw material for production). An entity means an economic unit that performs
economic activities.

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Definition of Accounting

American Institute of Certified Public Accountants (AICPA) which defines accounting as

“the art of recording, classifying and summarizing in a significant manner and in terms of money,
transactions and events, which are, in part at least, of a financial character and interpreting the
results thereof”.

Objectives of Accounting

Objective of accounting may differ from business to business depending upon their
specific requirements. However, the following are the general objectives o f accounting.

i)To keeping systematic record: It is very difficult to remember all the business transactions that
take place. Accounting serves this purpose of record keeping by promptly recording all the
business transactions in the books of account.

ii)To ascertain the results of the operation: Accounting helps in ascertaining result i.e., profit
earned or loss suffered in business during a particular period. For this purpose, a business entity
prepares either a Trading and Profit and Loss account or an Income and Expenditure account
which shows the profit or loss of the business by matching the items of revenue and expenditure
of the some period.

iii)To ascertain the financial position of the business: In addition to profit, a businessman must
know his financial position i.e., availability of cash, position of assets and liabilities etc. This
helps the businessman to know his financial strength. Financial statements are barometers of
health of a business entity.

iv)To portray the liquidity position: Financial reporting should provide information about how
an enterprise obtains and spends cash, about its borrowing and repayment of borrowing, about its
capital transactions, cash dividends and other distributions of resources by the enterprise to
owners and about other factors that may affect an enterprise’s liquidity and solvency.

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v) To protect business properties: Accounting provides upto date information about the various
assets that the firm possesses and the liabilities the firm owes, so that nobody can claim a
payment which is not due to him.

vi) To facilitate rational decision making: Accounting records and financial statements provide
financial information which help the business in making rational decisions about the steps to be
taken in respect of various aspects of business.

vii) To satisfy the requirements of law: Entities such as companies, societies, public trusts are
compulsorily required to maintain accounts as per the law

Importance of Accounting

i) Owners: The owners provide funds or capital for the organization. They possess curiosity in
knowing whether the business is being conducted on sound lines or not and whether the capital is
being employed properly or not. Owners, being businessmen, always keep an eye on the returns
from the investment. Comparing the accounts of various years helps in getting good pieces of
information.

ii) Management: The management of the business is greatly interested in knowing the position of
the firm. The accounts are the basis, the management can study the merits and demerits of the
business activity. Thus, the management is interested in financial accounting to find whether the
business carried on is profitable or not. The financial accounting is the “eyes and ears of
management and facilitates in drawing future course of action, further expansion etc.”

iii) Creditors: Creditors are the persons who supply goods on credit, or bankers or lenders of
money. It is usual that these groups are interested to know the financial soundness before granting
credit. The progress and prosperity of the firm, two which credits are extended, are largely
watched by creditors from the point of view of security and further credit. Profit and Loss
Account and Balance Sheet are nerve center’s to know the soundness of the firm.

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iv) Employees: Payment of bonus depends upon the size of profit earned by the firm. The more
important point is that the workers expect regular income for the bread. The demand for wage
rise, bonus, better working conditions etc. depend upon the profitability of the firm and in turn
depends upon financial position. For these reasons, this group is interested in accounting.

v) Investors: The prospective investors, who want to invest their money in a firm, of course wish
to see the progress and prosperity of the firm, before investing their amount, by going through the
financial statements of the firm. This is to safeguard the investment. For this, this group is eager
to go through the accounting which enables them to know the safety of investment.

vi) Government:Government keeps a close watch on the firms which yield good amount of
profits. The state and central Governments are interested in the financial statements to know the
earnings for the purpose of taxation. To compile national accounting is essential.

vii) Consumers:These groups are interested in getting the goods at reduced price. Therefore, they
wish to know the establishment of a proper accounting control, which in turn will reduce to cost
of production, in turn less price to be paid by the consumers. Researchers are also interested in
accounting for interpretation.

Basic Principles of Accounting

Guidelines on Basic Accounting Principles and Concepts

GAAP (Generally Accepted Accounting Principles) is the frame
Work Rulesand guidelines of the financial accounting profession with a Purpose of standardizing
the accounting concepts, principles and procedure. Here are the basic accounting principles and
concepts under this Framework.

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1. Business Entity
A business is considered a separate entity from the owner(s) and should be treated separately.
Any personal transactions of its owner should not be recorded in the business accounting book,
vice versa .Unless the owner’s personal transaction involves adding and/orwithdrawing resources
from the business.

2. Going Concern
It assumes that an entity will continue to operate indefinitely. In thisbasis, assets are recorded
based on their original cost and not onmarket value. Assets are assumed to be used for an
indefinite period oftime and not intended to be sold immediately.

3. Monetary Unit
The business financial transactions recorded and reported should being monetary unit, such as
INR,US Dollar, Canadian Dollar, Euro, etc.Thus, any non-financial or non-monetary information
that cannot be measured in a monetary unit are not recorded in the accountingbooks, but instead, a
memorandum will be used.

4. Historical Cost
All business resources acquired should be valued and recorded basedon the actual cash equivalent
or original cost of acquisition, not theprevailing market value or future value. Exception to the
rule is whenthe business is in the process of closure and liquidation.

5. Matching Concept
This principle requires that revenue recorded, in a given accountingperiod, should have an
equivalent expense recorded, in order to showthe true profit of the business.

6. Accounting Period
This principle entails a business to complete the whole accounting process of a business over a
specific operating timeperiod. It may be monthly, quarterly or annually. For annualaccounting
period, it may follow a Calendar or Fiscal Year.

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7. Conservatism
This principle states that given two options in the valuationof business transactions, the amount
recorded should be the lowerrather than the higher value.

8. Consistency
This principle ensures consistency in the accounting procedures usedby the business entity from
one accounting period to the next. Itallows fair comparison of financial information between
twoaccounting periods.

9. Materiality
Ideally, business transactions that may affect the decision of a user offinancial information are
considered important or material, thus, mustbe reported properly. This principle allows errors or
violations ofaccounting valuation involving immaterial and small amount ofrecorded business
transaction.

10. Objectivity
This principle requires recorded business transactions should havesome form of impartial
supporting evidence or documentation. Also, itentails that bookkeeping and financial recording
should be performedwith independence, that’s free of bias and prejudge.

.AUDITING

Introduction

The word audit is derived from Latin word ‘audire’ which means ‘to hear’. Auditing is a critical
examination of the records and books of account of a business by an independent qualified person
for ascertaining the authenticity and the accuracy of entries appearing in the books of account and
financial statement. Auditing is defined as a systematic and independent examination of data,
statements, records, operations and performances (financial or otherwise) of an enterprise for a
stated purpose.

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Definition

A common way to obtain such reliable information is to have some type of verification (audit)
performed by independent persons. The audited information is then used in the decision making
process on the assumption that it is reasonably complete, accurate and unbiased.

2. Prof. L.R ..Dicksee" auditing is an examination of accounting records undertaken with a view
to establish whether they correctly and completely reflect the transactions to which they relate”.

Objectives of Auditing

There are two main objectives of auditing, the primary objective and the secondary or incidental
objective.

a. Primary objective –as per Section 227 of the Companies Act 1956, the primary duty (objective)
of the auditor is to report to the owners whether the balance sheet gives a true and fair view gives
a correct figure of profit of loss for the financial year.

b. Secondary objective –it is also called the incidental objective as it is incidental to the
satisfaction of the main objective. The incidental objective of auditing are:

i. Detection and prevention of Frauds, and

ii. Detection and prevention of Errors.

Features of Audit

a. Audit is a systematic and scientific examination of the books of accounts of a business;

b. Audit is undertaken by an independent person or body of persons who are duly qualified for the
job.

c. Audit is a verification of the results shown by the profit and loss account and the state of affairs
as shown by the balance sheet.

d. Audit is a critical review of the system of accounting and internal control.

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e. Audit is done with the help of vouchers, documents, information and explanations received
from the authorities.

f. The auditor has to satisfy himself with the authenticity of the financial statements and report
that they exhibit a true and fair view of the state of affairs of the concern.

Advantages of Audit

The fact that audit is compulsory by law, in certain cases by itself should show that there must be
some positive utility in it. The chief utility of audit lies in reliable financial statement on the basis
of which the state of affairs may be easy to understand. Apart from this obvious utility, there are
other advantage of audit. Some or all of these are of considerable value even to those enterprises
and organization where audit is not compulsory, these advantages are given below:

(a) It safeguards the financial interest of persons who are not associated with the management of
the entity, whether they are partners or shareholders.

(b) It acts as a moral check on the employees from committing defalcations or embezzlement.

(c) Audited statements of account are helpful in setting liability for taxes, negotiating loans and
for determining the purchase consideration for a business.

(d) This are also use for settling trade disputes or higher wages or bonus as well as claims in
respect of damage suffered by property, by fire or some other calamity.

(e) An audit can also help in the detection of wastage and losses to show the different ways by
which these might be checked, especially those that occur due to the absence of inadequacy of
internal checks or internal control measures.

(f) Audit ascertains whether the necessary books of accounts and allied records have been
properly kept and helps the client in making good deficiencies or inadequacies in this respects.

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Qualities of An Auditor

So far we have discussed the question of formal qualifications of an auditor. But it is not enough
to realize what an auditor should be. He is concerned with the reporting on financial matters of
business and other institutions. Financial matters inherently are to be set with the problems of
human fallibility; errors and frauds are frequent. The qualities required, according to Dicker, are
tact, caution, firmness, good temper, integrity, discretion, industry, judgment, patience, clear
headedness and reliability. In short, all those personal qualities that goes to make a good
businessman contribute to the making of a good auditor. In addition, he must have the shine of
culture for attaining a great height. He must have the highest degree of integrity backed by
adequate independence. In fact, AAS-1 mentions integrity, objectivity and independence as one of
the basic principles. He must have a thorough knowledge of the general principles of law which
govern matters with which he is likely to be in intimate contact. The Companies Act, 1956 and
the Partnership Act, 1932 need special mention but mercantile law, specially the law relating to
contracts, is no less important. Needless to say, where undertakings are governed by a special
statute, its knowledge will be imperative; in addition, a sound knowledge of the law and practice
of taxation is unavoidable.

He must pursue an intensive programme of theoretical education in subjects like financial and
management accounting, general management, business and corporate laws, computers and
information systems, taxation, economics, etc. Both practical training and theoretical education
are equally necessary for the development of professional competence of an auditor for
undertaking any kind of audit assignment. The auditor should be equipped not only with a
sufficient knowledge of the way in which business generally is conducted but also with an
understanding of the special features peculiar to a particular business whose accounts are under
audit. AAS-8 on ‘Audit Planning’ emphasizes that an auditor should have adequate knowledge of
the client’s business. The auditor, who holds a position of trust, must have the basic human
qualities apart from the technical requirement of professional training and education.

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Limitations of Auditing

At this stage, it must be clear that the objective of an audit of financial statements is to enable an
auditor to express an opinion on such financial statements. In fact, it is the auditor’s opinion
which helps determination of the true and fair view of the financial position and operating results
of an enterprise. It is very significant to note that the AAS-2 makes it a subtle point that such an
opinion expresses by the auditor is neither an assurance as to the future viability of the enterprise
nor the efficiency or effectiveness with which management has conducted affairs of the
enterprise. Further, the process of auditing is such that it suffers from certain inherent limitations,
i.e., the limitation which cannot be overcome irrespective of the nature and extent of an audit
procedure. It is very important to understand these inherent limitations of an audit since
understanding of the same would only provide clarity as to the overall objectives of an audit.

Conclusion

Accounting and auditing both are specialized fields, but the scope of auditing in wider than
accounting as it needs a through understanding of various acts,tax rules, knowledge of
accounting standards and standards on auditing as well as communication

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 CHAPTER-2
VOUCHING

Introduction
Vouching is a technical term, which refers to the inspection of documentary evidence
supporting and substantiating a transaction, by an auditor. Vouching can be described as the
essence or backbone of auditing. The success of an audit depends on the thoroughness with which
vouching is done. After entering in all vouchers, only then can auditing start. Vouching is defined
as the "verification of entries in the books of account by examination of documentary evidence or
vouchers, such as invoices, debit and credit notes, statements, receipts, etc.

Definition
According to RONALD A. IRISH: “Vouching is a technical term, which refers to the inspection
of documentary evidence supporting and substantiating a transaction”

Points to be Considered in Vouching:

● Serial number: The auditor should see that the vouchers are consecutively numbered
according to date and the order of transactions. If this is not done then the auditor’s time
would be unnecessarily wasted in finding out required vouchers.
● Date: The auditor should carefully check the dates on vouchers. The vouchers should
relate only to the year for which the accounts are audited. Otherwise the vouchers of
earlier year may be produced again and cash or goods might be misappropriated.
● Name: The vouchers should be in the name of client. The transactions recorded in the
books of a client would be correct only if they are supported by bills, documents and other
evidences in the name of that particular client. The name of the party from whom the
voucher is received should be compared with the name of supplier in the books of
accounts.

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 ● Address: The voucher should be addressed to the client in whose books the transaction is
recorded. If the voucher is in the personal name of director, partner, or manager, the same
may not be relating to business itself.
● Amount: The amount shown in the voucher should tally with the amount recorded in the
books of accounts. The amount in voucher should be indicated both in figures and in
words, so that the alterations in figures can be avoided.
● Particulars: The auditor should carefully examine the particulars mentioned in the
voucher. From the particulars given in the vouchers, auditor is able to ascertain whether
the item is of a revenue or capital nature. This distinction is of great importance, since the
capital income and expenditure are shown in the Balance Sheet whereas revenue income
and expenditure are shown in Profit and Loss Account.
● Approval and Signature: Each voucher should be properly approved and authenticated.
The person who authorizes payment or other transaction should put his signature in
support of having approved the voucher. The auditor should have with him specimen
signature of various officers, with schedule of their powers.
● Revenue stamp: For payments exceeding RS . 5000/- the relative receipts should bear
revenue stamp of Re. 1.00. However, where the items are purchased for cash and a cash-
memo is obtained, there is no need to obtain stamped receipt.
● Continuous vouching: As far as possible the auditor should complete the vouching of a
particular period of a book in single sitting. If the vouching is kept pending or incomplete,
then there are chances of figures being altered and a fraud being committed after the
vouching is over.
● Cancelling the voucher: Once the voucher is audited, the same should be cancelled so
that it may not be produced again. Rubber stamp, Seal or Ticks of particular color is used
to cancel the voucher.
● Period: The auditor should pay particular attention to the period to which the voucher
relates. If the expenditure is for the period beyond the accounting year of client, the
proportionate amount of expenditure should be debited to prepaid expense accounts.
Similarly, from verification of period, the auditor gets an idea about income received in
advance, income due but not received for which correct adjusting entries should have been
passed.

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 ● Entry in the books of accounts: While examining vouchers, the auditor should see that
correct entry is passed in the books of accounts and he should see that there is no voucher
which is left to be recorded in the books of accounts. Moreover, as per details of voucher,
correct classification of revenue and capital is done.
● List of Missing Vouchers: After vouching is over, the auditor should go through the
relevant books or register and find out the un-ticked items. The items may not be ticked
for want of vouchers. The auditor should prepare a list of missing vouchers and ask the
person concerned to obtain the same. If he does not get the vouchers within reasonable
time or if he has not offered satisfactory explanation about missing vouchers, he should
mention the facts in his report. In several types of expenses vouchers are not received e.g.
Tea and breakfast, cartage.
The types of documentation include:
Requirements: Statements that identify attributes, capabilities, characteristics, or qualities of
a system. This is the foundation for what will be or has been implemented

Voucher Types
There are 18 vouchers already created in Tally software, which is divided into two parts:
1AccountingVouchers
2. Inventory Vouchers

Accounting vouchers
Accounting vouchers in tally are used to record the financial transactions. Examples of these
vouchers include contra, payment, receipt, journal, sales, purchase etc. While inventory
vouchers in tally used to maintain the record related to inventory. Examples of such vouchers
are purchase order, sale order, rejection in, rejection out, dely note, receipt note, physical
stock etc.

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 Inventory Voucher
Inventory Vouchers perform the function in the inventory system that accounting vouchers do
in the accounting system. Inventory Vouchers are also means of entering transactions.
Accounting vouchers will update only Accounts, but Inventory vouchers will update both
Accounts and Inventory. Inventory vouchers record the receipt and issue of goods/stock
(Movement of goods), the transfer of stock between locations and physical stock adjustments

Accounting Vouchers
Payment voucher
● Receipt voucher
● Sales voucher
● Purchase voucher

Payment Voucher
Gate way of tally. ERP> Accounting vouchers > f5: payment display the payment voucher

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Receipt Voucher
Gate way of tally. ERP> accounting vouchers>f6 : receipt display the receipt voucher.

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Sales Voucher
Gate way of tally . E

RP> accounting voucher > F8:sales display the sales voucher.

Conclusion

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 CAPTER-3
TALLY

Introduction
Tally is popularly known as accounting software for small and medium businesses. It does
all the functions of accounting that a particularly mid-sized business has. This is the view of most
of the persons who know about Tally. But Tally does much more than that. Tally is not just
accounting software. After the release of ERP version of Tally, the capability and functioning of
Tally is much more widened and extended to a great extent.

Tally is a complete Enterprise Resource Planning system with a excellent grip in accounting
features. Although it has many more core features that a business requires but its hold in
accounting is truly commendable. Therefore it is known more for accounting rather than any other
of its features. If I have to mention a single software for a business need even if the business is
just starting out, Tally is the one which I would recommend. The reason for this recommendation
is because Tally does all the things that a business at a time of starting up requires.

For example, if you are starting out a general store, what would you require?

1. Accounting
2. Billing
3. Sales and profit analysis
4. Banking
5. Inventory
6. Taxation (VAT, TDS, TCS)

I have brainstormed the needs of a newly opened general store which are all covered by Tally.
There are more functions than this like Audit, Payroll, Manufacturing and so on which if needed
can be used.

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This was just an example of a general store and almost any business which requires software for
its functioning; Tally can be a best fitthis was Tally and it can do much more. I will take you to
explain some of the core features of Tally.

Core Features of Tally

I’ve discussed some of the very core features or you can say some of the important functionality
of Tally. The features are listed without giving any specific rank to them. I am sure you will like
the detailed listing of some of the amazing features of Tally. This is like an introductory guide for
a first time reader if he or she has not heard of Tally before.

Accounting

Accounting is the main function of Tally and that is what it is known for. The first word that
comes in the mind of a person when hearing about Tally is accounting. Accounting is a basic
function of Tally and most people do not ever use any other functions other than accounting in
Tally. At the most they will use Inventory management and some of the Taxation features.
Because many people do not exactly know how to use those features. If we particularly talk about
accounting, Tally has segmented it in 6 different functions. They are:

1. Contra (Only for cash and bank related entries)

2. Payment (For payment entries)
3. Receipt (For receipt entries)
4. Journal (For entries which doesn’t include cash or bank and for closing entries)
5. Sales (For sales billing)
6. Purchases (For purchase billing)

Debit Note

Debit note is a document issued by the purchaser of goods to the seller. Usually it takes place in
returning the goods that are purchased on credit basis.

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Debit note consists of many details about the Goods returned. Like total number of quantity and
price, any trade discounts, special discounts allowed at the time of purchase.

Credit Note

Credit note is a note sent by the seller / Supplier acknowledging that he has received the goods
returned by the customer.
Credit note indicates that the account of the party to whom it is issued, is credited in the books of
accounts of the party by whom it is issued. (Supplier)

Advantages of Tally

1. Enables effortlessness data Movements.

2. Less expenses on data collection and data transfer of files:

3. Fast data files transaction:

4. Human errors is eliminated on the data:

5. To get easy and fast documents accesses:

6. Promotes business development activities:

7. For better sales promotion’s:

8. Industry specific software sides:

9. Web enabled services:

10. Easy to use and handle:

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Benefits of Tally
● Tally has saved all paper works, it means the cost of all paper works = zero=it means
before tally, we had to all work on papers and sometime paper work cost was more than
the benefit of information in small business type organization. But after tally using, most
benefits is gotten by small scale business organization.

● In one tally software, you can keep records of unlimited companies, in manual accounting
it is not possible that a single accountant can keep the record of 20 companies.

● After coming tally 9, it has made simple system of recording and calculation of all tax
responsibility. Different tax responsibilities lit VAT ,service tax, excise modVAT , custom
duty, TDS, advance tax, etc. can easily calculate and record in tally 9.

● Tally provide some exceptional report which are not possible to make in manual
accounting. In these exceptional reports, you can find negative stock, negative ledger,
overdue receivables, overdue payables, memorandum vouchers.

● One of the best advantage of tally that in tally we can see any report by filtering rang
option.

● With the help of the tally 9, accountants can generate all type ofVAT through e-return
files.

● Tally can be operated in 13 languages, if you are business man and prefer to use tally in
your local language, tally is providing support to record your transactions in your own
language.

Functions Of Tally Erp 9

Accounting, also known as bookkeeping, is the recording and classifying of financial transactions
into the books of accounts and associated registers.

Let us look at the some of the 'needs' for which businesses maintain books of accounts:

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• To fulfill legal requirements - records as per standards and practices
• To pay taxes to various bodies - statutory needs
• Keep the business running - manage receivables & payables, cash, bank...
• Keep a watch on the pulse of the organization - key performance indicators
• Respond to queries - to locate the right transaction immediately
Tally has been perfecting this 'simple' recording - accounting - for over twenty years. All this to
deliver better, faster and more flexible ways to fulfill your needs, not just maintain books of
accounts. A few examples will illustrate:
• With the entry of a voucher (this is what we call all accounting transactions) all books of
accounts, all reports, all totals & sub-totals are updated instantly. There is nothing more that
needs to be done - whether you are inserting a forgotten entry, or correcting one
• Taxation requirements of all the states of India are available, in the prescribed formats
• Supporting tasks like reminder letters, delayed interest, ageing, bank reconciliation
• One single dashboard to look at all important business ratios
• Drill down from any report, even the Balance Sheet, right to any voucher or filter and search
• Data entry in the language of the users choice - and report in any other language (from the
languages supported)
• Mark vouchers that are draft as 'optional' and convert these to final- with one button click

Conclusion
Reach can be used for preparing Invoices, Auto Calculating the GST Liability, Filing
Returns, Checking Purchases which auto populates in GSTN, Making GST Payments and
Accounting for GST.Free cloud server advantage, All documents in one place, All accounts are
docked in a single account for multiple businesses and securely backs up your data.

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 CHAPTER-4
E FILING

Introduction

The full form of e-filing is “Electronic Filing”. In view of expansion of internet, e-filing has not
only been popular but is also mandatory in large number of cases. You can send data to the
Finnish Tax Administration in different ways, using the alternative channels that are available.
While some of the e-filing services are maintained by the Tax Administration itself, some others
belong to external companies known as Tyvi operators, who offer them to taxpayers as a service.
The Tax Administration's services can always be used free-of-charge

Definition: E-filing is the process of submitting tax returns over the Internet, using tax
preparation software that has been pre-approved by the relevant tax authority.

Who should e-file income tax returns?

● Online filing of tax returns is easy and can be done by most assesses.
● Assesse with a total income of Rs.5Lakhs and above.
● Individual/HUF resident with assets located outside India.
● An Assesse required to furnish a report of audit specified under sections 10(23C) (IV),
10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC,
80ID, 80JJAA, 80LA, 92E or 115JB of the Act.
● Assesse is required to give a notice under Section 11(2) (a) to the assessing officer.
● A firm (which does not come under the provisions of section 44AB), AOP, BOI, Artificial
Juridical Person, Cooperative Society and Local Authority (ITR 5).
● An Assesse required to furnish returns U/S 139 (4B) (ITR 7).
● A resident who has signing authority in any account located outside India.
● A person who claims relief under sections 90 or 90A or deductions under section 91.
● All companies.

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Types of E-Filing

● Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using
Digital Signature Certificate (DSC) by a chartered accountant.
● If you e-file without DSC, ITR V form is generated, which should then be printed, signed
and submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the
date of e-filing.
● You can file e-file IT returns through an E-return Intermediary (ERI) with or without
DSC.
Advantages of E-Filing

There are also advantages to both Revenue and the customer in electronic filing. These include:

1. Improved Customer Service.

2. Faster Turn Around Time
3. Improved Accuracy and Audit trails
4. Reduced Processing Costs other potential savings

Steps To Follow To File Income Tax Returns

● Filing your income tax returns online doesn't have to be a complicated process. Simply
follow the below steps.
● First, log on to IncomeTaxIndiaeFiling.gov.in and register on the website.
● Your Permanent Account Number (PAN) is your user ID.
● View your tax credit statement or Form 26AS. The TDS as per your Form 16 must tally
with the figures in Form 26AS.
● Click on the income tax return forms and choose the financial year.
● Download the ITR form applicable to you. If you're exempt income exceeds Rs.5000, the
appropriate form will be ITR-2 (If the applicable form is ITR-1 or ITR 4S, you can
complete the process on the portal itself, by using the 'Quick e-file ITR' link - this has
been explained below).

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 ● Open excel utility (the downloaded return preparation software) and fill out the form by
entering all details using your Form 16.
● Check the tax payable amount by clicking the 'calculate tax' tab.
● Pay tax (if applicable) and fill in the challan details.
● Confirm all the data provided in the worksheet by clicking the 'validate' tab.
● Generate an XML file and save it on your desktop.
● Go to 'upload return' on the portal's panel and upload the saved XML file.
● A pop-up will be displayed asking you to digitally sign the file. In case you have obtained
a digital signature, Select 'Yes'. If you have not got digital signature, choose 'No'.
● The acknowledgment form, ITR Verification (ITR-V) will be generated which can be
downloaded by you.
● Take a printout of the form ITR-V and sign it in blue ink
● Send the form by ordinary or speed post to the Income-Tax Department, within 120 days
of filing your returns online.
Documentation
Documentation is a set of documents provided on paper, or online, or a digital or analog media,
such as audio tape or CDs.
Types of documentation
Architecture/Design
Overview of software includes relations to an environment and construction principles to be used
in design of software components.

Technical
Documentation of code,algorithms, interfaces, and APIs.

End user
Manuals for the end-user,system administrators and support staff.

Marketing
How to market the product and analysis of the market demand.

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 Chapter-5

GOODS AND SERVICE TAX

Introduction

The Constitution Amendment Bill for Goods and Services Tax (GST) has been approved by The
President of India post its passage in the Parliament (Rajya Sabha on 3 August 2016 and Lok
Sabha on 8 August 2016) and ratification by more than 50 percent of state legislatures. The
Government of India is committed to replace all the indirect taxes levied on goods and services by
the Centre and States and implement GST by July 2017.

GST will be a game changing reform for the Indian economy by creating a common Indian
market and reducing the cascading effect of tax on the cost of goods and services. It will impact
the tax structure, tax incidence, tax computation, tax payment, compliance, credit utilization and
reporting, leading to a complete overhaul of the current indirect tax system.

Types of Gst

Indian Government is opting for Dual System GST. This system will have two components which
will be known as

● State goods and service tax(SGST)

● Central goods and service tax(CGST)

The current taxes like Excise duties, service tax, custom duty etc. will be merged under CGST.
The taxes like sales tax, entertainment tax, VAT and other state taxes will be included in SGST.

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Gst Levied

GST will be levied on the place of consumption of Goods and services. It can be levied on

● Intra-state supply and consumption of goods & services

● Inter-state movement of goods
● Import of Goods & Services

Benefits of Gst Bill Implementation

● The tax structure will be made lean and simple

● The entire Indian market will be a unified market which may translate into lower business
costs. It can facilitate seamless movement of goods across states and reduce the
transaction costs of businesses.
● It is good for export oriented businesses. Because it is not applied for goods/services
which are exported out of India.
● In the long run, the lower tax burden could translate into lower prices on goods for
consumers.
● The Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred
on input costs as tax credits. This reduces the cost of doing business, thus enabling fairer
prices for consumers.
● It can bring more transparency and better compliance.
● Number of departments will reduce which in turn may lead to less corruption
● More business entities will come under the tax system thus widening the tax base. This
may lead to better and more tax revenue collections.
● Companies which are under unorganized sector will come under tax regime.

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 Challenges For Implementing Goods And Services Tax System
The bill is yet to be tabled and passed in the Parliament

● To implement the bill there has to be lot changes at administration level, Information
Technology integration has to happen, sound IT infrastructure is needed, the state
governments has to be compensated for the loss of revenue and many more..
● GST, being a consumption-based tax, states with higher consumption of goods and
services will have better revenues. So, the co-operation from state governments would be
one of the key factors for the successful implementation of GST

Since GST replaces many cascading taxes, the common man may benefit after implementing it.
But it all depends on ‘what rate the GST is going to be fixed at?’ Also, Small Traders may be
exempted from it.

France was the first country to introduce this system in 1954. Nearly 140 countries are following
this tax system. GST could be the next biggest tax reform in India. This reform could be a
continuing process until it is fully evolved. We need to wait few more months for more details on
Goods & Services Tax system.

Gst Rate Structure

A four-tier GST tax slabs have been decided by the Finance ministry. Below are the details;

● Zero Tax Rate: There won’t be any tax on almost 50 % of items in the Consumer Price
Index basket, including grains used by the common man.
● 5% Tax Slab: This is applicable on items of mass consumption used by common people.
● There would be two standard rates of 12% and 18% under the GST regime.
● All the items (especially luxury items) which are now taxed at around 30% will fall under
28% GST rate slab.
● An additional access would also be levied on luxury cars, tobacco products & aerated
drinks besides the highest tax rate (28%).
● The tax rate proposal will now be placed in Parliament for its approval

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Advantages Of Gst Bill
● This model is a single Tax model and Tax on Tax will be removed. Many Indirect Taxes
will be merged as Single Tax.
● After the implication of Goods and Service Tax act India will be a one market.
● All the products and services will be provided at same price in all the states. As the rate of
tax will be same in all over India.This is the biggest advantage of gst bill in India
● After this the tax is not applicable on manufacturing hand. So for manufacturers it is easy
to grow their business and develop it.
● Now Excise and some other taxes are applicable at the manufacturing Point. After this
these will applicable at consumption point.
● This system will Effect the evasion and theft of Tax will be minimized as it is easy to
track. This may be the demerit of GST for Tax Evaders.
● All the Products where multiple taxes where applicable will be cheaper like excise duty
and vat both will come to about 30% of Tax but in GST it is assumed to be 18-20%.
● Above were the advantages of GST bill and now I will show you some Disadvantages of
GST bill in India. This are the losses which will affect you only in short term and may not
be painful for you in the long run if the system will work properly.

Disadvantage Of Gst Bill

● The Service Tax in India is now 15% but the proposed GST is about 18-20%. All the
services will be Costlier and this one of the Disadvantages of GST Bill on Common
Person.
● There are some retail products where the Tax rate is only 4 percent but with GST it will be
costlier like Garments and cloths.
● The control on business will be of state and central government so it may be some
complex for businessman.
● All credits will be online and some penalties are like criminal activity. So it is threatening
for small businessmen who are now free from Taxes.

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 ● GST is also having three types of taxes and all have to be maintained and this not going
too easy for small Businessman.

How Will Gst Work In India

● In a first of its kind initiative, the GST will be implemented in two components – Central
GST or CGST and State GST or SGST. This dual GST will be levied on all the supply of
goods and services across the country.
● Therefore, if there is a sale within the State, then the both CGST and SGST will be charged.
However, if the sale is outside the State, then only the Intra-State GST will be levied by the
Centre.
● CGST is doing away with indirect taxes such Central Excise Duty, Service Tax, Addl.
Customs Duty, Special Addl. Customs Duty as well as Addl. Excise Duty. These indirect
taxes are those that are collected by the Centre.
● SGST will remove indirect taxes on goods and services which are charged by the State such
as VAT, Entertainment Tax, Purchase Tax, Octopi, Luxury Tax and Entry Tax.
● The credits of Input Tax of CGST will be accessible for settling the output of CGST liability
at every stage. Likewise, in the States, the credits of SGST taken on the inputs will be made
available for clearing the output of SGST’s liability at each stage.

Conclusion
Goods and Service Tax, with end-to-end IT-enabled tax mechanism, is likely to bring
buoyancy to government revenue. It is expected that the malicious activity of tax theft will go
away under Goods and Service Tax regime in order to benefit both governments as well as the
consumer. In reality, that extra revenue that the government is expecting to generate won’t come
from the consumers’ pocket but from the reduction of tax theft..

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Summary

Throughout the report we have seen about various topics like internship, auditing and
documentation types like excel, examination of documentary evidences i.e. vouching, usage of
tally, e-filing methods. It shows us that accounting and information technology needs integration
always so that the work can be performed well. It also shows us that certain necessary upgrades
needed to be adopted.

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