Reading Trial Balance, Profit and Loss and Balance Sheet in Tally Prime

Every entry you pass in Tally Prime ends up in one of three reports. An accounts assistant is expected to open them, explain a figure, and find the voucher behind it within a minute.

How the three reports connect

The Trial Balance lists every ledger with its debit or credit closing balance, and the two sides must total the same. The Profit and Loss account takes the income and expense ledgers from that list and shows the net profit or loss for the period. The Balance Sheet takes the asset and liability ledgers, adds the profit or loss, and must balance.

Ledgers reach the right report through their group. A ledger under Indirect Expenses lands in the Profit and Loss; one under Sundry Debtors lands in the Balance Sheet. If a figure is in the wrong report, the ledger is under the wrong group, not the wrong voucher.

Opening and reading a report

Press Alt+G (Go To), type the report name and press Enter, or go through the Gateway of Tally. Change the period with F2. Example 1: the owner asks for total sales in the last quarter. Open Profit and Loss, set the period, and read Sales Accounts under income. Press Enter on it repeatedly to move from ledgers to months to the vouchers themselves. That drill-down works in every report and is the fastest way to answer "what is in this number".

Example 2: a Trial Balance shows a line called Difference in Opening Balances. Compare each ledger's opening balance against last year's closing Balance Sheet until the line disappears.

Day Book and Stock Summary

The Day Book lists all vouchers for a day or period in order and is the first place to look when a figure seems doubled; a duplicate entry stands out there. Stock Summary shows quantity, rate and value of each item and feeds closing stock to the Balance Sheet when inventory is integrated with accounts.

Example 3: the Balance Sheet shows closing stock lower than the physical count. Open Stock Summary, drill into the item, and look for a sales voucher recorded twice or a purchase that was never entered.

Common mistakes and a practice habit

• Reading a report in the wrong period. Check the date range at the top before quoting a number.
• Treating a Trial Balance that balances as proof that everything is correct. It only proves debits equal credits; a wrong ledger choice still balances.
• Changing a figure by editing the original voucher instead of passing a correcting journal. Edits leave no trail.

In a practice company, pass ten mixed vouchers in one sitting, then predict where each will appear before opening the reports. Check your predictions in Trial Balance, Profit and Loss and Balance Sheet. When one lands somewhere you did not expect, trace the ledger group.