Tally (TallyPrime, formerly Tally ERP 9) is the most widely used accounting software in India, so Tally questions come up in almost every accountant interview. These Tally interview questions cover company creation, ledgers, groups and vouchers for freshers, then GST, inventory, TDS, payroll, reports and troubleshooting for experienced accountants.
30 questions · Updated
Fundamentals, definitions and simple scenarios. Good for freshers and warm-ups.
Tally is accounting and business management software widely used by small and medium businesses in India for accounts, inventory, GST, TDS and payroll.
TallyPrime is the current version, which replaced Tally ERP 9 with a simpler interface, Go To and Switch To navigation, multi-tasking, and easier GST and e-invoicing features.
The accounting concepts are the same.
A ledger is an account where transactions are recorded, such as Cash, HDFC Bank, Sales or a customer's name.
Groups classify ledgers, for example Sundry Debtors, Sundry Creditors, Bank Accounts, Duties & Taxes, Direct Expenses and Indirect Incomes.
Tally has 28 predefined groups (15 primary), and the group decides where the ledger appears in the balance sheet or profit and loss.
Contra (F4) for cash and bank transfers, Payment (F5), Receipt (F6), Journal (F7) for adjustments, Sales (F8), Purchase (F9), plus Credit Note (Alt+F6 in TallyPrime) for sales returns and Debit Note (Alt+F5) for purchase returns. Inventory vouchers include stock journal and physical stock, and memorandum vouchers do not affect accounts.
In TallyPrime, press Alt+K (Company) and choose Create, or select Create Company from the start screen; in Tally ERP 9 it was under Alt+F3. Enter the company name, address, state, financial year start date and books beginning date, set a TallyVault password if needed, and then enable features such as GST, TDS and inventory.
F11 (Company Features) turns on capabilities for the company, such as maintaining inventory, cost centres, bill-wise details, multiple godowns, batches, GST, TDS, payroll and multi-currency. F12 (Configure) changes how screens and reports behave, such as which fields appear during voucher entry and report display options.
Accounting vouchers record financial transactions that affect ledgers: payment, receipt, contra, journal, sales, purchase, credit note and debit note.
Inventory vouchers record stock movements without directly affecting accounts: stock journal, physical stock, delivery note, receipt note, rejections in and out, and material in and out.
Order vouchers record sales and purchase orders.
Cost centres track income and expenses by department, project, branch or employee, such as sales, marketing or Mumbai branch, so you can see costs by area.
Cost categories group cost centres into parallel classifications, for example projects and departments, so one expense can be allocated to both.
They are enabled in F11 and allocated during voucher entry.
With bill-wise details enabled, each sales or purchase invoice is tracked as a separate bill for a party.
When recording payments or receipts, you choose New Ref (a new bill), Agst Ref (against an existing bill), Advance (an advance payment) or On Account (not linked to a bill).
This makes outstanding and ageing reports accurate.
The Day Book (in Display More Reports, or from the Gateway) lists all vouchers entered for a date or period, which is useful for checking daily entries. The Trial Balance (Display More Reports > Trial Balance) shows the closing balances of all ledgers grouped under their groups, and is checked before preparing the balance sheet and profit and loss account.
An optional voucher (Ctrl+L) is recorded but does not affect ledgers or reports until it is converted to a regular voucher, which is useful for proforma invoices or entries awaiting approval. A post-dated voucher (Ctrl+T) is entered now with a future date, such as a post-dated cheque, and affects the books only when that date arrives.
Yes.
If a ledger or stock item does not exist while entering a voucher, you can create it on the fly with Alt+C (or the Create option in TallyPrime) without leaving the voucher screen, choosing the correct group and settings such as GST details.
Creating masters carefully, with the right group and tax details, prevents errors in reports.
Applied problems, trade-offs and questions about your own projects.
I enable GST in the company features (F11), enter the GSTIN, state and registration type, and set GST details such as HSN or SAC and rate on stock items or ledgers.
I create tax ledgers for CGST, SGST and IGST under Duties & Taxes.
When I record sales and purchase vouchers, Tally calculates the tax based on the party's state, and I generate GSTR-1 and GSTR-3B reports and reconcile with GSTR-2B.
I create stock groups, stock categories, units of measure and stock items with opening balances, and godowns if stock is kept at multiple locations.
Purchase and sales vouchers in item invoice mode update stock automatically.
Batches and expiry dates, price lists and reorder levels can be enabled.
Reports such as Stock Summary, Movement Analysis and Ageing show inventory status.
I open the bank ledger, choose Reconcile, and enter the bank date for each transaction that appears in the bank statement.
Tally then shows the balance as per the company books, the amounts not reflected in the bank, and the balance as per bank.
TallyPrime can also import bank statements to auto-match entries.
Differences are usually uncleared cheques, bank charges or interest not yet recorded.
I enable TDS in the company features with the TAN and deductor details, create nature of payment (for example 194C for contractors or 194J for professional fees) with rates and thresholds, and mark expense and party ledgers as TDS applicable.
When I book an expense, Tally calculates TDS and credits the TDS payable ledger.
I record the challan payment and generate reports for Form 26Q and certificates.
Enable payroll in F11, create employee groups and employees with joining date, bank details, PAN, UAN and ESI numbers, create pay heads for earnings (basic, HRA, allowances) and deductions (PF, ESI, professional tax, TDS), define attendance and production types and salary structures, record attendance, then generate payroll vouchers, payslips and statutory reports for PF and ESI.
Budgets set expected amounts for groups, ledgers or cost centres for a period, and variance reports compare budget with actual figures. Scenarios combine actual vouchers with optional, memorandum or reversing journal entries to create provisional reports, such as projected profit including expected adjustments, without affecting the actual books.
Enable interest calculation in F11, then set interest parameters on party or loan ledgers, such as rate, period and whether interest is calculated on balances or on each transaction (bill-wise). Interest reports show interest receivable or payable, and debit or credit notes can be raised to book the interest for overdue customer bills or loans.
Outstanding reports show bills receivable and payable, party-wise and group-wise, with due dates based on credit periods.
Ageing analysis groups outstanding amounts by how long they are overdue, such as 0 to 30, 31 to 60 and over 90 days.
These reports help follow up on collections and plan payments, and reminder letters can be printed.
Enable multiple currencies in F11, create currencies with symbols and formats, and set standard, selling and buying exchange rates.
Foreign currency transactions, such as export sales or import purchases, are recorded in the foreign currency and converted to the base currency.
Forex gain or loss is calculated when payments are received or made at a different rate.
TallyPrime connects to the government portals after you configure e-invoicing and e-way bill details for the company and log in with API credentials.
When a sales invoice is saved, you can generate the IRN and QR code (e-invoice) and the e-way bill directly, individually or in bulk, and they are printed on the invoice.
Reports show the status and allow cancellation within allowed time limits.
Enable order processing in F11.
Record sales orders and purchase orders, then delivery notes and receipt notes when goods move, and finally sales and purchase invoices linked to the orders.
Order outstanding reports show pending orders and quantities, which helps track what has been ordered, delivered and billed.
System design, deep internals, leadership and tough follow-ups.
The trial balance to check that it tallies and accounts are classified correctly, the profit and loss account and balance sheet, day book for unusual entries, outstanding receivables and payables with ageing, bank reconciliation, stock summary and its valuation method, GST returns versus books, TDS outstanding, and the exception reports for negative stock, negative ledger balances and unbalanced or optional vouchers.
After finalising entries, adjustments, depreciation and closing stock, I take a full backup.
In TallyPrime I continue in the same company by changing the period, since balances carry forward automatically, or split the company data by financial year to keep files small.
I lock past periods with security controls to prevent changes, and verify opening balances in the new year.
I enable security control with user roles so staff only access what they need, use TallyVault password encryption for sensitive data, turn on the edit log for an audit trail (required by the Companies Act from April 2023), and take regular backups to a separate location. If data is corrupted, I use the Repair option, and if that fails I restore the latest backup and re-enter missing entries.
TallyPrime supports multiple users on a network with a multi-user licence, and Tally can be hosted on a cloud server or accessed through remote desktop for remote access. Data synchronisation can exchange vouchers between branches and head office, and browser access lets users view reports online with the right licence and connected services.
Tally Definition Language is Tally's own language for customising and extending it.
With TDL, developers add custom fields to vouchers and masters, create new reports and invoice formats, add validations and integrate with other systems.
TDL files are loaded into Tally, and many businesses use TDLs from Tally partners for industry-specific needs.
The edit log records every creation, change and deletion of vouchers and masters with user and time, which supports the Companies Act requirement for an audit trail from April 2023. Security control sets user roles and restricts actions, the Tally audit feature lets auditors verify and mark vouchers, and exception reports highlight negative balances, unbalanced entries and data mismatches.
TallyPrime can import masters and vouchers from Excel using mapping templates, which is useful for migrating opening balances or bulk entries, as well as from XML and JSON.
Reports can be exported to Excel, PDF, CSV and other formats, and emailed directly.
Integrations with other software usually use XML over Tally's ODBC or HTTP interfaces.
Compare the GSTR-1 and GSTR-3B reports in Tally with the books and the returns filed on the portal.
Check for vouchers marked as uncertain or with incomplete GST details, wrong tax classification or party GSTIN, entries dated in the wrong period, amendments and cancelled invoices, and differences in rounding.
Reconcile purchase entries with GSTR-2A and 2B, correct the vouchers, and amend returns where allowed.
See all Accountant interview questions, covering Financial Accounting, Journal Entries & Ledgers, Balance Sheet, Profit & Loss, Cash Flow and more.