Step-by-Step Guide to Ledger Creation in Tally

Creating a ledger in Tally is a fundamental part of accounting, as all financial transactions are recorded through ledgers. In TallyPrime, ledgers are created under Groups (like Capital Account, Sales, Purchase, Cash-in-Hand, etc.).

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🎯 What is a Ledger in Tally?

A Ledger in Tally is a record of all transactions related to a specific account, such as a bank account, customer, supplier, or expense type.

Every transaction in Tally must be linked to at least two ledgers.

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🛠️ Steps to Create a Ledger in TallyPrime

🔹 Method 1: Single Ledger Creation

1. Gateway of Tally → Create → Accounts Info → Ledgers → Create (Single Ledger)
2. Fill in the following fields:
   • Name: Name of the ledger (e.g., Cash, State Bank of India, Rent A/c).
   • Alias (Optional): Short name for easier reference.
   • Under: Select the appropriate group (e.g., Cash under Cash-in-Hand, SBI under Bank Accounts, Rent under Indirect Expenses).
   • Inventory values are affected?: Choose Yes only if you’re creating stock-related accounts.
   • Opening Balance: If any, enter it with the correct sign (Dr/Cr).
3. Press Ctrl + A to save.

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🔹 Method 2: Multiple Ledgers Creation

1. Gateway of Tally → Create → Accounts Info → Ledgers → Create (Multiple Ledgers)
2. Select group as “All Items” or a specific group (e.g., Sundry Debtors).
3. Enter ledger names, group, and opening balances for each.
4. Press Ctrl + A to save.

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📋 Common Ledger Examples with Groups

Ledger Name	Group	Opening Balance	Nature
Cash	Cash-in-Hand	₹10,000 Dr	Asset
State Bank of India	Bank Accounts	₹25,000 Dr	Asset
Purchase A/c	Purchase Accounts	₹0	Expense
Sales A/c	Sales Accounts	₹0	Income
Rent Paid A/c	Indirect Expenses	₹0	Expense
Electricity Charges	Indirect Expenses	₹0	Expense
Capital A/c	Capital Account	₹1,00,000 Cr	Liability
Raj Traders	Sundry Creditors	₹15,000 Cr	Liability
Om Enterprises	Sundry Debtors	₹8,000 Dr	Asset

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🧾 Explanation of Some Ledgers

1. Cash Ledger

• Group: Cash-in-Hand
• Used to record all cash transactions.
• Only one cash ledger can be created in Tally.

2. Bank Ledger (e.g., State Bank of India)

• Group: Bank Accounts
• Used for bank-related transactions like deposits, withdrawals, cheques, etc.

3. Customer Ledger (e.g., Om Enterprises)

• Group: Sundry Debtors
• Used when you sell goods/services on credit.

4. Supplier Ledger (e.g., Raj Traders)

• Group: Sundry Creditors
• Used for purchases made on credit.

5. Indirect Expenses (e.g., Rent, Electricity)

• Group: Indirect Expenses
• Used to record operational expenses not directly linked to production.

6. Sales & Purchase Ledger

• Group: Sales Accounts / Purchase Accounts
• Required to record daily sales and purchases.

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✅ Important Notes

• Avoid duplicating ledger names.
• Ensure the “Group” selected is correct—Tally uses this for reporting.
• You can alter, display or delete a ledger anytime through:
  • Gateway of Tally → Alter / Display / Delete → Ledgers

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📌 Practical Example Scenario

Let’s say you’re starting a business with ₹1,00,000 capital and opening a bank account with ₹25,000 and keeping ₹10,000 as cash.

You purchase goods worth ₹15,000 on credit from Raj Traders and sell items worth ₹8,000 to Om Enterprises on credit.

You pay ₹2,000 for Rent and ₹1,000 for Electricity.

Here’s how you’d create ledgers:

1. Capital A/c (Under Capital Account, Cr ₹1,00,000)
2. Cash (Under Cash-in-Hand, Dr ₹10,000)
3. State Bank of India (Under Bank Accounts, Dr ₹25,000)
4. Raj Traders (Under Sundry Creditors, Cr ₹15,000)
5. Om Enterprises (Under Sundry Debtors, Dr ₹8,000)
6. Purchase A/c (Under Purchase Accounts)
7. Sales A/c (Under Sales Accounts)
8. Rent Paid (Under Indirect Expenses)
9. Electricity Charges (Under Indirect Expenses)

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🧠 Pro Tips

• Use Alt + G → Chart of Accounts to see all created ledgers.
• Regularly back up your company data after creating or modifying ledgers.
• Use Gateway of Tally → Display → Account Books → Ledger to view ledger reports.

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Here are 10 interview questions on the topic of Ledger Creation in Tally, suitable for beginner to intermediate levels:

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✅ Interview Questionnaire: Ledger Creation in Tally

1. What is a ledger in Tally? Why is it important in accounting?

Expected Answer: A ledger is an account used to record all financial transactions related to a specific item or party. Every transaction in Tally is recorded using ledgers, making them essential for maintaining accurate accounts.

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2. How do you create a single ledger in TallyPrime?

Expected Answer:
Path: Gateway of Tally → Accounts Info → Ledgers → Create (Single Ledger)
Fill in fields like Name, Under Group, Opening Balance, etc., then press Ctrl + A to save.

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3. What is the difference between Single Ledger and Multiple Ledger creation in Tally?

Expected Answer:
Single Ledger allows creation of one ledger at a time with detailed input.
Multiple Ledger allows creation of several ledgers on one screen quickly under the same or different groups.

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4. Which group will you select while creating the following ledgers?

a) Cash
b) State Bank of India
c) Rent Paid
d) Raj Traders
e) Om Enterprises

Expected Answer:
a) Cash-in-Hand
b) Bank Accounts
c) Indirect Expenses
d) Sundry Creditors
e) Sundry Debtors

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5. Can you create more than one cash ledger in Tally? Why or why not?

Expected Answer: No, Tally allows only one cash ledger under the “Cash-in-Hand” group because cash must be tracked centrally for compliance and reporting.

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6. What happens if you select the wrong group while creating a ledger?

Expected Answer: Reports and financial statements will be inaccurate. For example, if Rent Paid is placed under Assets instead of Expenses, it will distort profit & loss calculations.

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7. What is the significance of ‘Opening Balance’ in ledger creation? How do you decide if it’s debit or credit?

Expected Answer: Opening Balance shows the existing amount in the account.
Assets and Expenses usually have Debit (Dr) balances, while Liabilities and Incomes have Credit (Cr) balances.

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8. How do you display or alter an existing ledger in Tally?

Expected Answer:
Path: Gateway of Tally → Accounts Info → Ledgers → Alter / Display
Select the ledger from the list to modify or view.

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9. Name five common groups used while creating ledgers in Tally.

Expected Answer:

1. Capital Account
2. Bank Accounts
3. Cash-in-Hand
4. Sundry Debtors
5. Indirect Expenses

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10. What are the consequences of duplicating ledger names in Tally?

Expected Answer: Tally does not allow exact duplicates, but similar names may cause confusion and errors in data entry, misreporting, and incorrect voucher classification.

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Watch Video on Create Ledger in Tally ERP 9

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