Tally Interview Question and Answer

1. What is Tally?

Answer: Tally is a comprehensive accounting software used for financial management, inventory management, taxation and payroll billing. It is designed to help businesses  manage their accounting data in a simple and efficient way.

2. What are the main features of Tally?

Answer: Tally offers features like:

• Accounting
• Inventory management
• Taxation (GST, VAT, TDS)
• Payroll management
• Financial reporting
• Multi-currency support
• Data security and backup

3. What is the difference between Tally ERP 9 and Tally Prime?

Answer: Tally ERP 9 is an older version, and Tally Prime is the latest update with  improved user interface, improved navigation and improved performance. Tally Prime is designed to be more intuitive and include features such as advanced reporting and business insights.

4. What is a voucher in Tally?

Answer: Tally`s voucher  is a recording of a transaction. It includes details such as date, account, amount and other necessary information. Vouchers can be in a variety of  types, including payment, receipts, sales, purchases, and more.

5. How do you create a ledger in Tally Prime?

Answer: To create a ledger in Tally Prime:

• Go to Gateway of Tally > Create > Ledger
• Enter the ledger name, under which group it falls, and other necessary details like opening balance, etc.
• Save the ledger.

6. What is GST in Tally?

Answer: GST (Product and Services Tax) is a single tax system in India. Tally supports GST, allowing businesses to manage tax calculations, GST reports and GST submissions.

7. What are the different types of vouchers available in Tally?

Answer: The different types of vouchers in Tally include:

• Contra Voucher
• Payment Voucher
• Receipt Voucher
• Journal Voucher
• Sales Voucher
• Purchase Voucher

8. What is inventory management in Tally?

Answer: Tally`s inventory management includes tracking inventory movements, including purchases, sales, stock adjustments, and valuations. Tally allows businesses to effectively manage elements, batches and units of measurement.

9. What is a stock item in Tally?

Answer: Tally`s inventory items represent products or products purchased or sold by the company. It is used to pursue inventory and manage inventory levels.

10. How do you reconcile bank statements in Tally?

Answer: To reconcile bank statements in Tally:

• Go to Banking > Reconcile Bank
• Select the bank ledger and the bank statement date.
• Match the entries in Tally with the bank statement.
• Make adjustments if needed, and save the reconciliation.

11. What is Tally`s multi-currency feature?

Answer: Tally allows businesses to manage their transactions in several currencies. You can maintain your account in a variety of currencies, and Tally can automatically calculate exchange courses and conversions.

12. Explain the concept of `Cost Centers` in Tally.

Answer: The cost of tally is used to persecute and manage costs according to the department, project, or other organizational department. For more accurate financial reporting, companies can allocate costs to specific areas.

13. How do you generate a financial report in Tally?

Answer: To generate a financial report in Tally:

• Go to Gateway of Tally > Display > 
• You can generate reports like the Balance Sheet, Profit & Loss Account, and Trial Balance.

14. What is a trial balance?

Answer: A trial balance is a report that lists the balances of all ledgers to ensure that the books are balanced. It helps in detecting errors in accounting entries.

15. Explain how to create an inventory item in Tally.

Answer: To create an inventory item:

• Go to Gateway of Tally > Inventory Info > Stock Items > Create
• Enter the item name, select the group, define units of measurement, and set the rate/quantity details.

16. How do you manage payroll in Tally?

Answer: Tally offers payroll account features that allow users to manage their salaries, wages, bonuses and deductions. You can also generate wage and pay claim reports such as pay slides, presence records, EPFs and ESIC contributions.

17. What are the different accounting groups in Tally?

Answer: Tally has various accounting groups like:

• Assets
• Liabilities
• Income
• Expenses
• Capital

18. What is the difference between a debit note and a credit note in Tally?

Answer:

• A debit note is issued by the buyer to inform the seller of the increase in amount owed due to returns or adjustments.
• A credit note is issued by the seller to inform the buyer of a reduction in the amount due to returns or discounts.

19. What is a Bank Reconciliation Statement (BRS)?

Answer: A Bank Reconciliation Statement (BRS) is a report that compares  the cash balances displayed in a company`s book with the balances in a bank`s statement.

20. How do you handle GST in Tally?

Answer: Tally allows businesses to configure GST details including GSTIN, tax rates and registration requirements. You can generate GST reports such as GSTR-1, GSTR-2A, GSTR2B, and GSTR-3B.

21. What is the use of the `Alter` option in Tally?

Answer: The `Alter` option in Tally allows you to change or update  details for existing ledgers, vouchers, and other data entry.

22. Explain how Tally handles depreciation.

Answer: Tally can calculate depreciation in a TDL file based on the method you choose (such as straight balance or reduction in balance). Depreciation entries can be automatically generated according to the specified price.

23. What is a `group` in Tally?

Answer:  Tally`s group  is a classification of ledgers. Groups are used to organize similar types of accounts (assets, liabilities, expenses, etc.) to make reporting and accounting more systematic.

24. How do you set up GST rates in Tally?

Answer: To set up GST rates:

• Go to Gateway of Tally > F11: Features > Statutory & Taxation
• Enable GST and configure GST rates for sales and purchases according to your requirements.

25. What is the purpose of `Costing` in Tally?

Answer: Costing in Tally is used to track and manage the cost of production or services. Companies can help allocate costs for specific areas such as projects, departments, and production units.

26. How do you generate a Sales Register in Tally?

Answer: To generate a Sales Register:

• Go to Gateway of Tally > Display > Statutory Reports > GST > Sales Register
• You can customize the report to view details like sales with or without GST.

27. What is the purpose of a `Journal Entry` in Tally?

Answer: Journal entries are used to record cash-free or bank-free financial transactions  such as adjustments, depreciation, and regulations.

28. How do you import/export data in Tally?

Answer: Tally allows for the import/export of data  via XML or Excel formats to transfer ledgers, vouchers and other financial data between different instances or software systems.

29. Explain `Tally Vault` and its use.

Answer: Tally Vault is a function that can be used to protect sensitive data. Ensure the security of your business data by using encryption to restrict unauthorized access.

30. What is the difference between `Cash` and `Bank` accounts in Tally?

Answer:

• A Cash account is used for managing physical cash transactions.
• A Bank account is used for managing transactions related to bank accounts.

31. How do you record a `Contra` entry in Tally?

Answer: Contra entries are used for  cash and bank account transactions. To record a contra entry, select the Contra voucher type and enter the transaction details.

32. What is `Tally.NET`?

Answer: Tally.net is Tally`s service  for remote access, online protection and communication with other users. It also supports features such as updating and connecting to Tally Server.

33. What is a `Ledger` in Tally?

Answer:  Tally ledgers are accounts used to record and classify financial transactions. This is a detailed entry that stores all information about a particular account.

34. How can you manage multiple companies in Tally?

Answer: Tally allows users to create and manage multiple companies. You can simply switch  companies  and maintain individual financial data.

35. How do you track expenses in Tally?

Answer: Expenses in Tally can be tracked by creating expense accounts or ledgers under the "Expenses" group. Entries for each expense are recorded as vouchers.

36. What is the `Day Book` in Tally?

Answer: The Day Book in Tally is a report that lists all the transactions recorded in the system on a particular day. It includes details of vouchers like payments, receipts, sales, and purchases.

37. What is the `Sales Tax` feature in Tally?

Answer: Tally has a built-in feature for managing sales tax, including VAT, CST, and GST. It helps in calculating, collecting, and reporting sales tax.

38. How do you use `Tally` for financial analysis?

Answer: Tally provides financial reports like Profit & Loss statements, Balance Sheets, and Cash Flow statements, which are useful for financial analysis and decision-making.

39. What is `Inventory Valuation` in Tally?

Answer: Inventory valuation in Tally determines the value of stock in hand based on methods like FIFO (First In, First Out), LIFO (Last In, First Out), and others.

40. Explain `Reversal Journal Entries` in Tally.

Answer: A reversal journal entry in Tally is used to reverse or undo previously recorded entries, often used for correcting mistakes or reversing adjustments.

41. How do you handle a `Purchase Return` in Tally?

Answer: A purchase return is recorded as a Purchase Return voucher, where you specify the supplier, items being returned, and the amount to be adjusted.

42. What are `Tally Reports`?

Answer: Tally provides various types of reports, including financial reports, inventory reports, taxation reports, and more. These reports help businesses track and analyze their financial performance.

43. What is `Data Synchronization` in Tally?

Answer: Data synchronization in Tally refers to the process of syncing data between multiple systems, enabling remote access and data consistency across multiple locations.

44. What is `Tally Customization`?

Answer: Tally customization involves modifying the software to fit specific business requirements. This could include creating custom reports, adding new features, or changing how data is displayed.

45. How do you set up a `Fixed Asset` in Tally?

Answer: To set up a fixed asset:

• Create a ledger under the Fixed Assets group.
• Enter details like purchase date, cost, and depreciation method.
• Record transactions related to the asset under the fixed asset ledger.