CAS

1. Explain the process of creating a 'Company' in a widely used popular accounting

software. (6) (2h+2p)
Ans: Steps for creating a company in a widely used popular accounting software like tally is as

follows-

1. Go to gateway of tally and then press "Alt+F3"

2. From the menu click on "Create Company"

3. Specify the Tally Data path in the Directory field.

4. Type the name of the Company.

5. Type the Company address details in the Mailing Name & Address fields.

6. Select India in the "Statutory Compliance for" field from the List of Countries.

7. Select the State.

8. Type the PIN Code, E-mail and Telephone No. Details.

9. The Currency Symbol is by default set as Rs.

10. Select Accounts with Inventory in the Maintain field.

11. Specify the "Financial Year from", then the "Books beginning from" date is defaulted

automatically.

12. Set Disallow opening in Education Mode? to Yes/ No, to restrict/ allow opening of
company

in Education Mode.

13. Specify the Tally Vault Password (if any) and Use Security Control fields, as required.

14. Press "Yes" to accept the screen and for successful company creation.

2. What do you understand by e-filing of Income Tax Return? Discuss the various steps
involved while filing ITR online for a salaried person. (3+9) (2h+2p)

Ans:- E-filing of Income Tax Return (ITR) refers to the process of electronically submitting an
individual's or an entity's tax return through the official website of the Income Tax
Department using the internet.

The various steps involved in e-filing ITR for a salaried person assuming such individual
having income if any from one house property & other sources are as follows -

1
1. Go to the official website of the income tax department of India 'www.incometax.gov.in'

2. Login to e-filling portal by entering -

• PAN

• Password

• Captcha Code

and then click 'Login'.

3. Click on the 'e-file' menu and click 'Income Tax Return' link.

4. On ITR page the PAN will be pre filled and then -

• Select Assessment Year

• Select ITR FORM Number (ITR 1)

• Select 'Filing Type' as 'Original/Revised Return'.

• Select 'Submission Mode' as 'Prepare and Submit Online'.

Then click on 'Continue'.

5. After that the ITR 1 FORM will be generated. Then carefully fill all the applicable and
mandatory fields like -

• Personal information

• Salary details as per FORM 16

• House property details

• Income from other sources details

• Deductions claimed u/s 80C to 80U or chapter VI-A.

• Tax payment details such as TDS form FORM 16 & FORM 26AS.

6. After filling the above applicable and mandatory fields, the system will automatically
compute the tax liability. If the computed value is within the taxable slab, then pay the tax
amount using online tax payment system (Challan 280).

2
7. After that, review all the details entered in the ITR 1 FORM and submit it once verified.

8. After submission, we can verify our ITR using -

• Aadhaar OTP

• Bank account

• Demat account

• Electronic Verification Code (EVC).

9. After successful verification we will receive an acknowledgement receipt via the provided
email.

3. What are the various “Accounting Reports” that can be generated in a widely used
popular accounting software? Explain each one of these briefly. (4+8) (2h+p)

Ans: In a widely used popular accounting software like tally, there are several accounting
reports that can be generated to provide insights into the financial performance and
position of a business. Here are the major 8 key accounting reports in tally:

1. Balance Sheet: The Balance Sheet provides a snapshot of the company's financial position
at a specific point in time. It lists assets, liabilities, and equity, showing the financial health
and net worth of the business.

2. Profit and Loss Account (Income Statement): This report summarizes the revenue and
expenses of a company over a specific period of time. It shows the net profit or loss
generated by the business during that period.

3. Cash Flow Statement: The Cash Flow Statement tracks the inflows and outflows of cash
within the business over a period. It helps in understanding the liquidity position and cash
management.

4. Trial Balance: The Trial Balance is a summary of all ledger accounts, displaying the debit
and credit balances. It helps in verifying the accuracy of the ledger entries and ensuring that
debits equal credits.
5. Day Book: The Day Book is a chronological record of all transactions for a specific day or
range of days. It provides a comprehensive view of daily financial activities.

6. Ratio Analysis: The Ratio Analysis report provides various financial ratios that help in
analyzing the finances of business. It aids in decision-making and financial planning.

4. Define TDS. When it is applicable?(1+2) (2h+p)

3
Ans: TDS is a method of collecting income tax whereby a certain percentage of a payment is
deducted by the payer at the time of making specified payments such as salary, rent,
interest, commission, etc.

TDS aims to collect tax at the source of income and is used as a means to prevent tax
evasion by ensuring that tax is deducted at the point of income generation itself.

TDS is applicable in the following situations as specified under the Income Tax Act, 1961 -

1. Salary payments by employer to employees if the salary exceeds the basis exemption
limit.

2. Interest payments made by banks on fixed deposits if the interest exceeds a specified
limit.

3. Payments made to professionals for services rendered or brokerage if the amount

exceeds a specified limit.

4. Dividend paid by the company to shareholders if the dividend amount exceeds the
specified threshold.

5. Rent payments made to the owner for immovable properties if the rent amount exceeds a
specified limit.

5. Discuss the factors that you will consider to choose the appropriate accounting software
for your firm from among the various others available in the market.(2h+p)

Ans:

1. Scalability: Scalability refers to the software's ability meet the growing needs of the
business as it expands. The accounting software should efficiently handle increasing
transaction volumes and user numbers without compromising performance. It should
support new and advanced features to meet the growing needs of the business.

2. Security: The software must have robust security features, such as data encryption, access
controls, and regular security updates, to protect the financial data from unauthorized
access and cyber threats.

3. Compatibility: The software should be compatible with the organizations existing systems,
operating systems, and other applications like banking application, enabling seamless
integration and data sharing.

4. Usability: Usability refers to how easy to use the software is. It should have a user-friendly
interface that is to navigate for efficient adoption and minimizing the learning curve.

5. Customization: The software should have decent customization options to adapt to

unique workflows, processes, and reporting requirements, providing a better alignment with
business operations.

6. Compliance: The software should also adhere to relevant accounting standards, tax
regulations, and industry-specific compliance requirements of the country or region.

4
7. Cost: Cost includes both the initial cost and ongoing expenses for maintenance and
updates. The cost should be within the budget of the company and the benefits of the
software should also justify the cost.

8. Customer support: Customer support is vital for resolving issues and obtaining assistance
when needed. The software should offer various support options such as training resources,
assistance via phone, email, chat and physical visits.

6. What is ‘Reversing Journal’ in a widely used popular accounting software?(2h)

Ans: A Reversing Journal in Tally is a special type of journal that is automatically reversed on
a specified date. This feature is used for temporary adjustments, provisional entries, or any
transactions that need to be negated in the future to maintain accurate financial records.

Example:

Let's say at the end of December of the financial ending December, we were to pay rent but
we missed it and now we'll pay it on January of the next year.

We want to record this expense in December's accounts but ensure it doesn't affect
January's financials.

On December 31st, we create a Reversing Journal entry in Tally to record the accrued rent
expense for January as -

Rent Expense a/c dr.

To Accrued Rent Payable a/c

Tally automatically reverses the above entry on January 1st as -

Accrued Rent Payable a/c dr.

To Rent Expense a/c

This reversal journal that ensures January's financial statements only reflect actual
payments made, not the accrual.

7. What do you understand by Backup and Restoring data in an accounting software? In

this context, mention and explain the method of restoring data in a widely used popular
accounting software?(3+9) (2h)
Ans: Backup refers to making a copy of the data files to prevent data loss due to unexpected
events like hardware failure, system crashes, accidental deletion or cyber-attacks.

Restoring data refers to recovering and importing previously backed-up data files into the
software, typically following data loss or to revert to an earlier state.

The method of restoring data in a widely used popular accounting software like tally is as
follows-

5
1. Launch Tally Prime software on the computer.

2. Go to Gateway of Tally then select Press "Alt+F3" then "Company Info." and then
"Restore"

3. Select Destination (specify path). This is where the restored data will be saved.

4. Select Source (specify path). This is where the backup data files are currently stored.

5. Select the company/ companies for data restore from the List of Companies.

6. Save the screen by pressing "Yes".

8. Distinguish between ‘Ready-to-use’ and ‘Tailor-made’ accounting software. (3-6) (2h)

Ans:-

9. Write a short note on VAT (3) (2h)

Ans: VAT was a type of indirect tax levied on the sale of goods at each stage of the
production and distribution chain, where value was added.
Currently VAT has been subsumed into GST and so it's replaced too in the newer version of
accounting software like tally.

However, for items where GST is not applicable, VAT is available on tailored accounting
systems.

6
10. Define a Computerized Accounting System. Describe the advantages and limitations of
Computerized Accounting System (2+8) (2h)

Ans: A computerized accounting system is a software based method for tracking financial
transactions and managing accounting data.

It automates the accounting process by using computers and software applications,

replacing traditional manual accounting system to ensure accuracy, speed and efficiency in
handling financial records.

ADVANTAGES:

1. Accurate: once data is entered into the CAS, all the processes and calculations are done
automatically by the software making the CAS highly accurate.

2. Reliable: Since the scope of errors in CAS is minimized, the financial accounts and financial
statements are highly reliable.

3. Cost effective: Compared to traditional paper based accounting, CAS is faster and safe a
lot of time and can also manage large volume of transaction. Therefore, it's more
economical.

4. Quick report generation: in CAS various statements and reports can be generated
instantly at the click of a button. Managers do not have to wait for hours, even days to get
important reports.

5. Secure: The data can be saved and backed-up, making it secure from any natural or
manmade disaster. Also, confidential data can be preserved to in a highly secured manner.

DISADVANTAGES:

1. High initial cost: Implementing CAS can be expensive due to the cost associated with
purchasing software, hardware and setting up the system. Small businesses may find the
difficult to cover these initial expenses.

2. Complexity: CAS software can be complex to set up & operate which may require trained
individuals. This can be time consuming and costly.

3. Security risk: Storing financial data electronically exposes it to several cyber risks which
can lead to loss of data and heavy loss. Ensuring robust security can be expensive.

4. Dependence on technology: A CAS relies heavily on technology making in vulnerable to

technical issues like system crashes, software bugs & hardware failures. This can disrupt the
accounting processes.

5. Customization limitations: While CAS software packages offer many customization

options, they may not fully meet the unique needs of every business.

11. Explain the need of computerized accounting system in an organization.(6) (2h)

7
Ans:

1. Efficiency & speed: CAS automates many accounting task, significantly speeding up the
calculations and report generation. This efficiency allows for quick decision making &
reduces the time spent on routine tasks.

2. Accuracy: Automation in CAS minimizes error ensuring greater accuracy in financial

records. This accuracy is crucial for reliable financial reporting & compliance.

3. Real time financial information: A CAS provides real time access to financial data enabling
organization to monitor their financial health continuously. Real time information is
important for timely decision making & effective financial management.

4. Security: CAS are secured by encryption, regular backups and access controls which
protect sensitive financial data from unauthorized access.

5. Scalability: As an organization grows the volume of financial transaction increases. CAS

can easily scale to meet the growing needs of an organization.

6. Regulatory compliance: CAS ensures adherence to accounting standards and regulations

by automating compliance task. This helps organization avoid legal issues ensuring transfer
& accurate financial reporting.

12. What is Gateway of a widely used popular accounting software? Discuss the various
items on Gateway of a widely used popular accounting software.(6) (h+p)

Ans: The Gateway of Tally is the primary screen interface through which users can navigate
to various functions and features within Tally such as manage company data, and perform
various accounting, inventory, and financial tasks.

The Various Items on Gateway of Tally are -

1. Company Info: This section displays basic information about the company, such as the
company name, address, and other details.

2. Masters: Masters are used to create and manage the primary data structures in Tally,
such as ledgers, groups, stock items, and units of measure.

3. Transactions: This section is used for recording all financial transactions

4. Utilities: Utilities provide additional tools and features to enhance the functionality of
Tally. This includes import/export options, data synchronization, and audit features

5. Reports: It allows the users to generate and view a wide range of reports such as balance
sheet, profit & loss, cash flow etc.

6. Accounting Vouchers: This section is dedicated to entering and managing accounting

vouchers. Users can create, alter, and delete vouchers as per their needs.

8
13. What is memorandum voucher in a widely used popular accounting software? State its
application with an example.(3+6) (h+p)

Ans: A Memorandum Voucher in Tally is a non-accounting voucher used for making

provisional entries that do not affect the accounts immediately. These entries are recorded
for informational purposes or future reference and can be converted into actual vouchers if
required. Tally doesn't post these entries to ledgers but stores them in separate
memorandum register. Later we can modify and convert a memo voucher into a regular
voucher reflecting the transaction in the accounts.

Some of the major applications of memorandum vouchers are as follows -

1. Estimations and Provisions: Memorandum vouchers are useful for recording estimated
expenses or provisions that will be adjusted later. This helps in planning and budgeting by
keeping track of expected costs or revenues.

2. Pending Approvals: When a transaction requires approval from higher management

before being finalized, a memorandum voucher can be used to note it down. This ensures
that the transaction is recorded and can be reviewed before final approval.

3. Incomplete voucher: If we don't have any details of a voucher then we can record it in the
memo voucher and modify it later when the details are available.

4. Internal Notes: Memorandum vouchers can be used as internal notes or reminders for
potential transactions. This helps in keeping track of possible financial activities that might
occur in the future.
Example:

Let's say we have a small business and we need repairs in our office space. The repairs
company gave us an estimate that the repairs might cost around Rs. 10,000 but the final
quotation will be given after completing of repairs.

In this scenario, we can use create a memorandum voucher in Tally and enter the estimated
amount of ₹10,000 under the repair repairs and maintenance account.

This memorandum voucher serves as a temporary record of the anticipated expense until
we receive the final quotation from the repair service.

Once we receive the final quotation, we convert the memorandum voucher into a payment
voucher to officially record the expense in our books of accounts.

14. Explain Accounting Vouchers in widely used popular accounting software. Explain how
a new voucher type in that software is created and write its use.(6+3) (2p)

9
Ans: A Voucher is any documentary evidence which is used to support the entries made in
the books of accounts of an enterprise.

In computerized accounting systems like tally, vouchers facilitate the systematic recording,
categorization, and analysis of financial transactions.

Some of the different types of vouchers that can be created in tally are as follows -

1. Contra voucher: A contra voucher is used to record transactions that involve the transfer
of funds between two cash or bank accounts within the same company. For example: Cash
deposit into back, Cash withdraw from bank etc.

2. Payment voucher: A payment voucher is used to record transactions where a payment is

made to a party, such as a vendor, creditor, or supplier.

3. Receipt voucher: A receipt voucher is used to record transactions where a payment is

received from a party, such as a customer or debtor

4. Journal voucher: This voucher is used for non-cash, sales and purchases transactions.
Basically, this voucher is used for accounting adjustments.

5. Sales voucher: A sales voucher is used to record transactions related to the sale of goods
or services

6. Purchase voucher: A purchase voucher is used to record transactions related to the

purchase of goods or services from a vendor or supplier.

7. Debit note voucher: A debit note voucher is used to record purchase returns or revision in
the amount payable to the supplier.

8. Credit note voucher: It is issued to record a sales return transaction or reduction in

amount receivable from a customer.

CREATION OF CONTRA VOUCHER:

1. Go to Gateway of Tally > Accounting Vouchers.

2. Select Contra (F4).

3. Enter the details like date, account names, and amounts.

4. Save the voucher by pressing Ctrl + A.

10
15. Distinguish between the Traditional and Computerized Accounting Systems.(5) (2p)

Ans:

16. What is the purpose of password in vault in a widely used popular accounting
software? (3) (h)

Ans: In widely used popular accounting software like Tally the purpose of a password in a
vault is to ensure secure access and protection of sensitive financial data.

The password acts as a barrier to prevent unauthorized users from accessing confidential
financial information stored in the vault. Only authorized personnel, such as accountants or
administrators, can view, modify, or manage sensitive data like bank account details, payroll
information, or tax records. The Password protection also helps businesses comply with data
protection regulations and standards.

11
17. What is the difference between single user and multi user widely used popular
accounting software? (h)

Ans:

18. What is the difference between debit note and credit note in a widely used popular
accounting software? (6) (h)

12
Ans:

19. What is Budget? How will you create, alter and delete budget in a widely used popular
accounting software? (2+4) (h)

Ans: A budget is a financial plan that estimates revenue and expenses over a specified
period. In a computerized accounting system like Tally, a budget helps in planning and
controlling financial resources, ensuring that the business operates within its means and
meets its financial goals.

A) TO CREATE BUDGET:

1. Go to Gateway of Tally

2. Then select Chart of accounts

3. Select budget under accounting master heading

4. Select create master’s option

5. Specify Name for the Budget.

6. Specify Date range for the budget

7. Set Yes to Groups/Ledgers & assign budget to selected groups/ledger

B) TO ALTER BUDGET:

1. Go to Gateway of Tally

2. Then select Chart of accounts

13
3. Select budget under accounting master heading

4. select alter budget option

5. modify the field as required (period, group, ledger, cost centers)

6. Press enter to confirm and then press yes to save.

C) TO DELETE BUDGET:

1. Go to Gateway of Tally

2. Then select Chart of accounts

3. Select budget under accounting master heading

4. Then from the list of budgets section delete manually or Press "Alt+D"

20. Write short notes on Cost center in a widely used popular accounting software (3) (h)

Ans: A Cost Center in Tally is a feature that allows businesses to track and analyze costs
associated with different divisions, departments and projects within the organization.

It helps in allocating expenses and revenues to specific cost centers, enabling better cost
management and profitability analysis.

21. Briefly discuss the ‘security control’ feature in a widely used popular accounting
software (6) (h)

Ans: Security Control feature is a feature in tally that is designed to ensure data integrity
and restrict unauthorized access to sensitive information by defining user roles, permissions
and access rights.

Its FEATURES are as follows -

1. It allows the admin to create multiple user accounts with specific roles such as data entry
operator, accountant, etc.

2. Each user role can be configured with access permission defining what they can view and
modify.

3. It tracks user activities and changes made to data, maintaining accountability and
transparency

The BENEFITS of this feature are as follows -

1. It ensures that only authorized personnel can access sensitive data.

2. Helps businesses comply with regulatory requirements by restricting access to

confidential information.

14
3. Reduces the risk of data breaches, fraud, and errors by implementing strict access
controls.

4. Improves workflow efficiency by providing appropriate access based on job roles.

22. What is an Unconventional Voucher? What are Post dated vouchers? Explain with an
example.(3+3) (h)

Ans: Unconventional Vouchers are the special vouchers that are used to record provisional
or non-accounting transactions. These vouchers are mainly used to exclude unnecessary
entries or temporary entries from the books of accounts and make them available for what
if reports, future reports, projections, forecasts etc., required at any given time.

Post-dated vouchers in Tally are used to record transactions that are intended to take place
on a future date. These vouchers are marked with a date later than the current date, and
they do not affect the accounts until the specified date arrives.

Post-dated vouchers are typically used for the following scenarios -

1. Advance payment or receipts

2. Recurring transactions (like loan instalments, monthly rent etc.)

3. Back dated transactions (i.e. for transactions that have already occurred but were missed
or forgotten to be entered on the actual transaction date)

In tally there are four main types of post-dated vouchers:

1. Post-Dated Contra Vouchers

2. Post-Dated Payment Vouchers

3. Post-Dated Receipt Vouchers

4. Post-Dated Journal Vouchers

Example:

Suppose we issued a post-dated cheque for a supplier on June 30th but today is June 10th.
In this scenario we can create a post-dated payment voucher in Tally with the date June
30th. This transaction will be recorded but will not affect the books until June 30th.

15
23. What are the advantages of e-filing of Income Tax Return. (6) (h)

Ans: The advantages are as follows –

1. Convenience: Taxpayers can file their ITR from anywhere at any time using the internet,
eliminating the need to visit tax offices or banks.

2. Accuracy: Filing of return involves a lot of computations, and manual filing could lead to
the furnishing of incorrect details due to complex calculations. The e-filing process involves
built-in checks and validations, which help reduce errors.

3. Confidentiality: The online portal through which the ITR is filed uses advanced encryption
technologies and secure login procedures to protect sensitive data from unauthorized
access, ensuring that personal and financial information remains private and secure.

4. Fast processing: E-filed ITRs are processed faster by the Income Tax Department
compared to manually filed returns, reducing the time taken for assessment and refunds.

5. Immediate acknowledgement: Upon successful e-filing of the ITR, taxpayers receive an

instant acknowledgment through the registered e-mail. This serves as proof of filing and can
be used for future reference or communication with the Income Tax Department.

6. E-verification: Taxpayers can verify their returns using various methods such as Aadhaar
OTP, Bank account, demat account or by generating an Electronic Verification Code (EVC). E-
verification eliminates the need to send a physical copy of the ITR-V to CPC Bengaluru.

24. Name three popular accounting software. (3)(h)

Ans:
1. Tally ERP 9: Tally is one of the widely used accounting software in India specially among
small and medium businesses. It offers features like accounting, inventory management,
payroll and GST support.

2. Marg ERP 9: Marg is another prominent accounting software in India favored particularly
in the retail and distribution sector. It offers features like inventory management, purchase
& sales management, financial accounting & GST support. Marg ERP is also known for its
scalability & customization option.

3. QuickBooks: it is a global accounting software widely used in India for it is of use. It caters
primarily to small and medium businesses.

16