Top 48+ Tally Questions and Answers to Excel in Your 2025 Interview

Tally is one of the most widely adopted accounting software solutions, used by more than 2 million businesses globally. 

Tally simplifies accounting, automates tasks, ensures GST compliance, scales with your business, and is cost-effective. It manages ledgers, vouchers, groups, and inventory and generates key financial reports like balance sheets and P&L statements.

Preparing for Tally interview questions and answers can significantly increase your chances of securing a career in accounting or finance. 

Let’s explore how you can sharpen your skills and excel in Tally interviews.

Essential Tally Questions and Answers for Beginner-Level Interviews

This section covers essential Tally concepts, preparing you for interviews by exploring key features, real-world applications, and emerging trends in accounting software. Let’s begin with the first question:

1. What Is Tally, And How Is It Used In Accounting?

Tally accounting software helps businesses manage financial transactions, maintain ledgers, track financial statements, and ensure tax compliance, such as with GST. It streamlines daily accounting tasks like invoicing, payroll management, and inventory tracking, providing accurate and organized financial data.

As technology advances, Tally continues to evolve, integrating features like cloud-based access, AI-driven insights, and automation to improve accuracy and efficiency. Tally is essential for adapting to contemporary trends like data management and seamless tax management. 

In the future, its role in automating financial analysis and enhancing decision-making will become even more critical. Tally's adaptability and scalability make it indispensable for businesses, offering a comprehensive solution to managing complex financial data and reporting.

Now that you understand what Tally is, let's explore the key accounting features it offers in Tally ERP 9.

2. What Are The Key Accounting Features Of Tally Erp 9?

Tally ERP 9, the predecessor of Tally Prime, simplifies accounting with several essential features:

• Accounts Management: Efficiently manages ledgers, groups, and vouchers to track financial transactions.
• GST Compliance: Handles GST functionalities, including return filing and tax calculations, ensuring businesses stay compliant.
• Inventory Management: Monitors stock, manages bills of materials, and generates stock-related reports to optimize inventory levels.
• Multi-Currency Support: Enables transactions in multiple currencies, crucial for businesses with international dealings.
• Reports Generation: Generates comprehensive reports like balance sheets, trial balances, and profit & loss statements for easy financial analysis.

Understanding the key features of Tally ERP 9 sets the stage for exploring the advanced capabilities of Tally prime.

3. What Are The Main Features Of Tally Prime?

Tally Prime, the latest version of Tally ERP 9, introduces several new features to enhance business management:

• Web Integration: Allows access from anywhere with internet connectivity, supporting remote work and global operations.
• Advanced GST Features: Simplifies compliance with the latest GST rules and return filing.
• Data Synchronization: Tally allows synchronization of data across multiple branches, ensuring updates are reflected across the organization. While it supports data syncing, real-time simultaneous multi-user editing is not its primary feature.
• Business Intelligence: Provides advanced reporting and analytics, helping businesses make informed decisions based on data.
• User-Friendly Interface: The redesigned interface improves usability, streamlining tasks and enhancing efficiency.

Also Read: Top 15 Decision Making Tools & Techniques To Succeed in 2025

Understanding Tally prime's features demonstrates its importance in streamlining accounting and financial processes for businesses.

4. What Makes Tally Software Essential For Businesses?

Tally software is essential for businesses because it offers:

• Time-saving Automation: Automates repetitive accounting tasks, reducing human error.
• Scalability: Supports small to large businesses with different accounting needs.
• Comprehensive Reports: Generates accurate financial statements and reports for business insights.
• Cost Efficiency: Helps reduce costs associated with manual accounting processes.
• Tax Compliance: Keeps businesses compliant with the latest tax laws like GST.

Understanding Tally's role in managing financial records helps recognize how it handles both tangible and intangible assets.

5. What Are Intangible Assets? Provide Examples.

Intangible assets are non-physical assets that provide value to a business. Examples include:

• Goodwill: The reputation of a business acquired over time.
• Intellectual Property: Patents, trademarks, and copyrights.
• Software: Purchased software licenses or proprietary software developed by a company.
• Brand Recognition: The market value derived from a well-known brand.

Also Read: What is Intellectual Property Law?

Now that we have a clear understanding of intangible assets, let's look at how Tally ERP 9 utilizes vouchers to manage financial transactions.

6. What Is The Role Of Vouchers In Tally Erp 9?

Vouchers in Tally ERP 9 record and store accounting transactions. They serve as a primary document for all entries made in the software. There are various types of vouchers, such as:

• Payment Vouchers: Record payments made by the business.
• Receipt Vouchers: Track incoming payments.
• Sales Vouchers: Document sales transactions.
• Purchase Vouchers: Record purchases made by the business.

Understanding the role of vouchers in Tally helps clarify how accounting and inventory vouchers function differently.

7. How Do Accounting Vouchers Differ From Inventory Vouchers In Tally?

Accounting vouchers focus on financial transactions, while inventory vouchers track stock-related transactions. The key differences include:

• Accounting Vouchers: Deal with monetary transactions like purchases, sales, payments, and receipts.
  • Example: A payment voucher records cash payment to a supplier.
• Inventory Vouchers: Handle the movement of goods or stock.
  • Example: A purchase order voucher tracks goods purchased, including quantities and cost.

Understanding voucher types is essential before moving on to more advanced tasks, such as creating a new company in Tally.

8. What Are The Steps To Create A New Company In Tally Erp 9?

Creating a new company in Tally involves these steps:

1. Open Tally: Launch the software.
2. Select 'Create Company': From the gateway, choose to create a new company.
3. Enter Company Details: Provide details such as the company name, address, financial year, and currency.
4. Set Up Preferences: Customize taxation, currency, and other accounting preferences settings.
5. Save the Company: Save the company details once the information is entered.

Once you've created a company, the next important question is setting up individual ledgers to manage transactions efficiently.

9. How Can You Create A Single Ledger In Tally?

To create a single ledger in Tally:

1. Go to 'Accounts Info': From the main menu, select 'Accounts Info.'
2. Choose 'Ledger': Next, select 'Create' under the ledger option.
3. Enter Ledger Details: Provide the ledger name, group, and other relevant details.
4. Save: After entering the details, save the ledger.

The ledger will now be available for recording transactions in your Tally system.

Also Read: Job Oriented Courses After Graduation

Once you understand how to create a single ledger, let's explore how to create multiple ledgers efficiently in Tally.

10. How Can You Create Multiple Ledgers At Once In Tally?

To create multiple ledgers in Tally:

1. Go to 'Accounts Info': Choose 'Accounts Info' from the main menu.
2. Select 'Multiple Ledgers': Opt for 'Create' and then select 'Multiple Ledgers.'
3. Enter Ledger Details: Input all the ledger names and respective groups in bulk.
4. Save: After entering all the details, save the ledgers.

This method is efficient when you need to create a large number of ledgers simultaneously.

Once you've learned how to create multiple ledgers, it's important to understand the most commonly used ledger types in Tally.

11. What Are The Most Commonly Used Ledger Types In Tally Erp 9?

The most commonly used ledger types in Tally ERP 9 include:

• Cash: For recording cash-related transactions.
• Bank: For transactions involving bank accounts.
• Sales and Purchase: Used for recording sales and purchase transactions.
• Expenses: For tracking operational costs.
• Income: To record income from various sources.

Each ledger serves a specific purpose, helping organize financial data in a clear and concise manner.

Understanding common ledger types in Tally sets the foundation for using the trial balance to verify accounting accuracy.

12. How Does The Trial Balance Help In Tally?

The trial balance in Tally helps ensure the accuracy of accounting records by confirming that debits equal credits. It lists all ledger balances, making it easier to identify discrepancies between the two sides. 

If the trial balance does not match, it indicates errors such as incorrect journal entries, unrecorded transactions, or data entry mistakes. By reviewing the trial balance, you can trace and adjust journal entries, ensuring the books are balanced and the financial data is accurate.

Once the trial balance is verified, you can easily generate financial reports like the profit and loss statement in Tally.

13. How Do You Generate A Profit And Loss Statement In Tally?

To generate a profit and loss statement in Tally:

1. Go to Reports: From the main menu, select the 'Profit & Loss A/c' option under 'Accounts Books.'
2. Select the Period: Choose the financial year or period you want the statement for.
3. View the Report: The profit and loss statement will display, showing revenue, expenses, and net profit or loss.

This report helps analyze the financial performance of the business.

Once you understand generating key financial reports, knowing shortcut keys in Tally can improve your workflow efficiency.

14. What Shortcut Key Retrieves The Last Deleted Line In Tally Erp 9?

The shortcut key to retrieve the last deleted line in Tally ERP 9 is Ctrl + D. This allows you to quickly undo accidental deletions and recover lost data.

Also Read: Top Tools for Financial Statement Analysis [2025 Guide]

Next, explore additional useful shortcut keys that enhance efficiency in Tally ERP 9.

15. What Shortcut Key Is Used To Recall The Last Saved Narration For A Ledger?

The shortcut key to recall the last saved narration for a ledger in Tally is Ctrl + Alt + N. This saves time by allowing you to reuse previously entered narrations.

Once you've mastered shortcut keys, it's also crucial to understand how to access key statutory details in Tally.

16. How Can You Check A Company’s Statutory Details In Tally?

To check statutory details in Tally:

1. Go to 'Company Info': From the main menu, choose 'Company Info.'
2. Select 'Statutory Info': Then, select 'GST Details' or other applicable statutory details.
3. View Details: The system will display the company's tax-related information like GSTIN, tax rates, and filing status.

This feature ensures that your business complies with applicable tax laws.

Once you’ve checked statutory details, understanding how to set up budgets in Tally helps in effective financial planning.

17. What Is The Purpose Of Budgets In Tally, And How Do You Set Them Up?

Budgets in Tally help plan and control finances by setting targets for various categories like income and expenses. To set them up:

1. Go to 'Accounts Info': Choose 'Budgets' under the 'Accounts Info' menu.
2. Select 'Create' or 'Alter': Enter the details of the budget period and amount.
3. Save: Save the details once you set the budget for different categories.

Budgets help track financial performance against planned targets, allowing businesses to make informed decisions.

Also Read: Finance Free Online Course with Certification

Once you've set up budgets, mastering Tally’s shortcut keys, like opening the Day Book, enhances workflow efficiency.

18. Which Shortcut Key Opens The Day Book In Tally?

To open the Day Book in Tally, use the shortcut key Alt + F3. The Day Book provides a chronological view of all transactions entered.

Now that you know how to access key reports, let’s explore how to manage and delete voucher entries in Tally.

19. How Can You Delete A Voucher Entry In Tally Erp 9?

To delete a voucher entry:

1. Go to the Voucher: Open the voucher entry you want to delete.
2. Press 'Alt + D': This will delete the voucher.
3. Confirm Deletion: Tally will prompt you for confirmation before deleting the entry.

This is useful if you need to correct or remove an incorrect entry.

Also Read: Top 20+ Skills Required for Accounting and Finance in 2025

Once you've managed voucher entries, the next crucial step is configuring GST for accurate tax compliance in Tally.

20. What Are The Steps To Enable GST In Tally?

To enable GST in Tally:

1. Go to 'F11': Press F11 to open the configuration menu.
2. Select 'Taxation': Choose the 'GST' option from the list.
3. Enable GST: Set 'Yes' for enabling GST.
4. Configure GST Details: Enter your GSTIN (GST Identification Number) and other necessary details such as the GST state, GST registration type (regular, composition, etc.), and taxable nature.
5. Set up Tax Ledgers: Create ledgers for different GST taxes (CGST, SGST, IGST) under the appropriate group for proper tax calculations.
6. Configure GST Rates: Set the applicable GST rates for products or services by specifying tax categories in the product or purchase ledger.
7. Save: After entering all details, save the settings.

Enabling GST ensures that your business remains compliant with tax regulations, while configuring tax ledgers and GST returns allows accurate tax reporting and seamless filing.

Now that you understand GST in Tally, let’s move on to more advanced concepts for mid-level professionals.

Tally Interview Questions And Answers For Mid-Level Professionals

This section delves into intermediate-level Tally functionalities, such as inventory management, taxation, and reporting. These questions and answers are designed for professionals with a solid understanding of Tally and its more advanced features.

21. Which Shortcut Key Filters Reports Based On Monetary Values In Tally Erp 9?

To filter reports based on monetary values in Tally ERP 9, use the Alt + F12 shortcut key. This allows you to apply filters to your reports, making it easier to analyze financial data by narrowing it down to specific monetary values.

Filtering ensures you can focus on the data that matters most, such as identifying high-value transactions or outstanding amounts, helping better financial management.

Don't just answer Tally's questions; understand the 'why' behind them. Sign up for upGrad's Accounting Fundamentals course. Get Started for Free!

Now that you know how to filter reports, let's explore how to access and manage the Books of Accounts in Tally.

22. How Do You Access The Books Of Accounts In Tally Erp 9?

To access the Books of Accounts in Tally ERP 9:

1. Go to the Gateway of Tally: From the main screen, choose "Display."
2. Select 'Accounts Books': Under this, you can access various accounting reports like Day Book, Ledger, Trial Balance, etc.

The Books of Accounts provide detailed records of all financial transactions, crucial for auditing and reporting.

Once you've accessed the Books of Accounts, you can easily generate financial statements like the profit and loss report.

23. How Can You View The Profit And Loss Statement In Tally Erp 9?

To view the profit and loss statement in Tally ERP 9:

1. Go to 'Display': From the Gateway of Tally, choose 'Display.'
2. Select 'Profit & Loss A/c': You can view the detailed report for the selected period.
3. Adjust Period or Filters: Customize the period or any other parameters to suit your needs.

This report overviews the business’s financial performance, showing the difference between revenue and expenses.

After you understand the profit and loss statement, it’s important to categorize transactions using groups in Tally.

24. What Is A Group In Tally Erp 9, And Why Is It Important?

A group in Tally ERP 9 is a collection of similar accounts which helps organize transactions. Common groups include:

• Assets
• Liabilities
• Income
• Expenses

Groups ensure that accounts are categorized correctly for reporting purposes. They simplify generating accurate financial reports, such as the Balance Sheet.

Understanding groups in Tally is essential before exploring how inventory reports further streamline business management and decision-making.

25. What Are Inventory Reports In Tally, And How Do They Help In Business Management?

Inventory reports in Tally provide detailed insights into stock levels, stock movements, and valuations. Examples include:

• Stock Summary Report: Shows the current stock level, valuation, and movements.
• Movement Analysis Report: Provides information on stock movement over time.

These reports help in managing inventory efficiently, preventing overstocking or stockouts, and optimizing business operations.

Also Read: Demand Of Supply Chain Management In India

Understanding inventory reports is key to managing stock, while knowing where Tally stores company data ensures seamless access and security.

26. Where Does Tally Erp 9 Store Company Data After Creation?

Tally ERP 9 stores company data in a specific location on the computer’s hard drive. Typically, data is saved in the Tally folder within the Data directory, with the file extension .TSF (Tally Data File). Users can also define custom locations for data storage during the initial setup. Knowing where the data is stored is crucial for backup, recovery, and data migration purposes.

Also Read: Data Analytics Life Cycle Explained

Once you understand where Tally stores company data, managing financial aspects like cost centers is the next step.

27. What Are The Steps To Create A Cost Center In Tally?

To create a cost center in Tally:

1. Go to 'Accounts Info': Choose 'Cost Centres' under 'Create' or 'Alter.'
2. Enter Details: Provide the name of the cost center, the associated group, and other relevant information.
3. Save: Once the cost center details are entered, save them.

Cost centers allow you to track expenses and income related to specific departments or functions within a business.

After you’ve set up cost centers, the next step is understanding how Tally’s Voucher Class feature enhances efficiency.

28. How Does The Voucher Class Feature Help In Tally?

The voucher Class in Tally helps streamline entering recurring or similar transactions. You can set predefined templates for different vouchers. For example:

• Sales Voucher Class: This can include predefined GST rates, discount structures, etc.
• Payment Voucher Class: Pre-fill details for regular payments, such as supplier payments.

Voucher Classes save time and reduce manual errors by automating common transactions.

After understanding the Voucher Class feature, let’s see how Tally automates processes like bank reconciliation for enhanced efficiency.

29. What Is The Process For Setting Up Automatic Bank Reconciliation In Tally?

To set up Automatic Bank Reconciliation in Tally:

1. Go to 'Banking': Choose the 'Reconciliation' option.
2. Select 'Bank Account': Choose the account you want to reconcile.
3. Enable 'Auto Reconciliation': Turn on the automatic reconciliation option.
4. Provide Bank Details: Enter the bank statement details.

This process helps businesses quickly reconcile bank statements and update the financial records in Tally, ensuring accuracy.

After bank reconciliation is automated, managing multiple currencies in Tally becomes essential for global financial tracking.

30. How Do You Track Multiple Currencies In Tally?

Tally allows you to manage multiple currencies by enabling the Multi-Currency feature. To track multiple currencies:

1. Go to 'F11: Features': Choose 'Multi-Currency.'
2. Enable Multi-Currency: Select 'Yes' to enable the feature.
3. Create Currency: Under 'Currency Info,' create different currencies with the applicable rates.

This feature is useful for businesses dealing with international clients and suppliers, helping to manage currency fluctuations efficiently.

Also Read: Top Finance Interview Questions & Answers for 2025

Once you’ve mastered currency tracking, managing complex inventories like Bills of Materials (BOM) becomes equally essential in Tally.

31. How Do You Create Multiple Bills Of Materials (Bom) In Tally?

To create multiple Bills of Materials (BOM) in Tally:

1. Go to 'Inventory Info': Choose 'Bills of Materials.'
2. Create New BOM: Define the materials and quantities for producing a finished product.
3. Save: Once the BOM details are entered, save them.

BOM helps manufacturing businesses to manage raw materials and finished products efficiently, ensuring accurate cost tracking.

Once you’ve created multiple BOMs, the next step is to record the manufacturing process using a Manufacturing Journal.

32. What Is A Manufacturing Journal In Tally, And How Is It Used?

A Manufacturing Journal in Tally records transactions related to the manufacturing process, specifically tracking the movement of raw materials into finished goods. It helps businesses manage their production flow by updating inventory and calculating the cost of production.

For example:

• Journal Entry: When raw materials are used for manufacturing, the raw materials ledger is debited, and the finished goods ledger is credited.
• Stock Updates: The stock of raw materials decreases, and the stock of finished goods increases accordingly. This ensures that the inventory is accurately reflected.
• Cost Adjustments: The cost of manufacturing, including raw material costs, labor, and overheads, is automatically calculated, which helps in determining the cost of production for finished goods.
• Stock Impact: Raw material stock decreases, and finished goods stock increases.
• Cost Impact: The cost of manufacturing (raw material, labor, overhead) is automatically calculated, helping to determine the total cost of production for finished goods.

After understanding the Manufacturing Journal, exploring how to secure and control access to sensitive financial data in Tally is important.

33. How Can You Configure Security Controls In Tally Erp 9?

To configure security controls in Tally:

1. Go to 'Gateway of Tally': Select 'Security Control.'
2. Create User and Password: Assign user roles and permissions for accessing various features.
3. Set Restrictions: Define which actions can be performed by each user.

Security controls ensure that only authorized personnel can access sensitive financial data and prevent unauthorized modifications.

After securing your Tally system, managing inventory efficiently, including godowns, is equally crucial for streamlined operations.

34. How Do You Create And Manage Godowns In Tally?

To create and manage godowns in Tally:

1. Go to 'Inventory Info': Choose 'Godowns' under 'Create' or 'Alter.'
2. Create Godown: Enter the name of the godown and its location.
3. Assign Godowns to Items: While entering inventory transactions, assign specific items to Godowns.

Managing godowns helps businesses track stock across different locations and streamline inventory management.

Once you’ve set up godowns, managing TDS becomes important for tax compliance. Here's how you can enable and manage TDS in Tally.

35. How Can You Enable And Manage Tds (Tax Deducted At Source) In Tally?

To enable and manage TDS in Tally:

1. Go to 'F11: Features': Choose 'Taxation' and enable TDS.
2. Create TDS Ledger: Set up TDS ledgers for different categories of payments (e.g., contractor, professional fees).
3. Track TDS: Select the appropriate TDS ledger and deduct tax during voucher entry.

TDS management in Tally ensures businesses comply with tax laws and efficiently track tax deductions at source.

Also Read: Top 15+ Best Career Options in Future [In-demand highest paying jobs]

Now that we've covered TDS management let’s explore the different types of vouchers and their shortcuts in Tally.

36. What Are The Different Types Of Vouchers In Tally Erp 9? Explain Them With Shortcuts.

Tally ERP 9 provides various vouchers, each used for specific transactions. Common types include:

• Payment Voucher (F5): Used for recording payments.
• Receipt Voucher (F6): Used for recording receipts.
• Sales Voucher (F8): Used for recording sales transactions.
• Purchase Voucher (F9): Used for recording purchases.

These vouchers allow businesses to manage their accounting transactions efficiently.

Understanding voucher types in Tally ERP 9 sets the stage for exploring how Tally ERP 9 compares with Tally Prime.

37. How Does Tally Erp 9 Differ From Tally Prime?

Tally Prime, an upgraded version of Tally ERP 9, offers enhanced features like:

• Simplified Interface: The user interface is more intuitive and modern in Tally Prime.
• Improved Navigation: Easier access to reports and features.
• Remote Access: Tally Prime offers better cloud integration for remote access to data.

Tally Prime is designed for the modern business environment, offering more flexibility and ease of use.

Understanding the differences between Tally ERP 9 and Tally Prime sets the stage for exploring Tally's balance sheet configuration.

38. What Is The Default Configuration For The Balance Sheet In Tally? How Can It Be Modified?

The default configuration for the Balance Sheet in Tally displays assets, liabilities, and equity. It is based on the double-entry accounting system. To modify it:

1. Go to 'Display': Choose 'Balance Sheet.'
2. Modify Configuration: Use the configuration options to adjust the report according to the period, classification, and filters.
3. Save Customization: Save the customized report layout for future use.

Modifying the Balance Sheet configuration ensures the report aligns with the company’s specific reporting needs.

Understanding the balance sheet configuration in Tally sets the stage for exploring advanced features and expert-level functionalities.

Advanced Tally Interview Questions and Answers for Experts

These advanced-level Tally questions focus on automation, integrations, and advanced reporting. Designed for professionals with extensive Tally experience, these questions help you demonstrate your deep understanding of Tally's capabilities.

39. How Do You Enable And Use Multi-Currency Features In Tally?

To enable and use Multi-Currency features in Tally:

1. Enable Multi-Currency: Go to 'F11: Features' and enable the multi-currency option.
2. Create Currencies: Under 'Currency Info,' create the required currencies by entering their details and exchange rates.
3. Apply to Transactions: While entering transactions, you can specify the currency for each transaction, and Tally will automatically handle conversions.

This feature is imperative for businesses dealing with international clients or suppliers, helping to manage exchange rate fluctuations effectively.

Let’s explore Tally’s encryption features next.

40. What Encryption Features Does Tally Provide For Securing Financial Data?

Tally uses TallyVault encryption and user-level access control to secure financial data, but does not provide full-scale encryption. It secures data through:

• TallyVault: A feature that encrypts company data, making it accessible only with a valid password.
• Password Protection: Allows setting up different levels of user access, ensuring that sensitive data is only accessible by authorized personnel.
• Data Backup Encryption: Ensures backup data is encrypted and protected from unauthorized access.

These features ensure your business’s financial information is secure from breaches and unauthorized changes.

Also Read: Top 37 Finance Project Ideas & Topics [For Freshers & Experienced]

After securing financial data, understanding Tally’s interest calculation features is essential for managing group-related financial transactions.

41. How Is Interest Calculated On A Group In Tally? Explain The Interest Calculator Feature.

Tally’s Interest Calculator feature automates the interest calculation for outstanding balances, making it easier to manage overdue payments or receivables. Here’s how to set it up:

1. Enable Interest Calculation: Go to 'F11: Features' and enable the interest calculation option.
2. Define Interest Rates: Set the interest rate for specific groups or ledgers, such as creditors or debtors. For example, you might set a 12% annual interest rate for overdue payments.
3. Configure Calculation Period: Define the frequency for interest calculation, such as daily, monthly, or yearly, depending on your needs.
4. Review Calculations: Tally automatically calculates interest on overdue amounts using the following formula:
   Interest = Outstanding Amount × Interest Rate × Time Period

For example, if an outstanding balance of ₹10,000 has a 12% annual interest rate and is overdue for 3 months, the interest would be:
Interest = ₹10,000 × (12% / 12) × 3 = ₹300

After understanding interest calculation, let’s explore how Tally manages inventory through Stock Categories for better organization.

42. What Are Stock Categories In Tally, And How Do You Create Them?

Stock Categories in Tally are used to classify items for easier tracking and reporting. To create them:

1. Go to 'Inventory Info': Choose 'Stock Categories' under 'Create.'
2. Enter Category Details: Provide a name and description for the category (e.g., Raw Materials, Finished Goods).
3. Assign to Items: Assign stock items to relevant categories when creating or altering them.

Stock Categories help businesses track inventory more effectively and generate focused reports.

Once you understand stock categories, the next step is managing price levels for better inventory control and pricing strategies.

43. How Do You Set Up And Manage Price Levels In Tally?

To set up and manage Price Levels in Tally:

1. Enable Price Levels: Go to 'F11: Features' and enable price levels for sales.
2. Create Price Levels: Under 'Inventory Info,' create price levels like Wholesale, Retail, etc.
3. Assign Price Levels to Items: Set item-wise prices according to the level during transaction entry.

Price levels help businesses maintain different pricing strategies for customer groups, streamlining the pricing process.

Once you’ve set up price levels, managing to reorder levels ensures inventory stays optimized with accurate stock quantities.

44. What Is A Reorder Level In Tally? How Can You Specify Minimum And Reorder Quantities?

A Reorder Level in Tally is the stock level at which new inventory should be ordered to avoid running out of stock. This feature helps businesses maintain optimal stock levels, ensuring smooth operations.

To set it up:

1. Go to 'Inventory Info': From the Gateway of Tally, select 'Inventory Info.'
2. Create or Alter Stock Item: Choose the item for which you want to set reorder levels or create a new item.
3. Specify Minimum Stock Level: In the item details, enter the minimum stock level. This is the level at which stock should be reordered.
4. Set Reorder Level: Enter the reorder quantity. This is the stock level at which the order should be placed to replenish inventory.
5. Specify Maximum Stock Level (Optional): You can also set a maximum stock level to prevent overstocking. This helps in maintaining a balance between excess and insufficient inventory.

For example, if the minimum stock for an item is set at 10 units and the reorder level is 20 units, Tally will automatically prompt for restocking when the stock reaches 10 units.

After you’ve set reorder levels, Tally also helps manage inventory with features like the Bill of Materials (BOM).

45. What Is The Bill Of Materials (Bom) Feature In Tally? How Is It Useful?

The BOM (Bill of Materials) feature in Tally helps businesses define the raw materials required to produce finished goods. To use it:

1. Create a BOM: Go to 'Inventory Info' and choose 'Bills of Materials.'
2. Add Components: Specify raw materials and quantities needed to produce finished goods.
3. Track Usage: Tally deducts the required raw materials from the inventory while recording production.

BOM is useful for manufacturing businesses to accurately track raw material usage and finished goods production.

Also Read: What is a Software Bill of Materials?

Understanding the Bill of Materials (BOM) helps grasp how Batch-Wise Costing works for better inventory and cost management.

46. How Does Batch-Wise Costing Work In Tally?

Batch-wise costing in Tally allows you to track and manage inventory based on batches. To use it:

1. Enable Batch-Wise Costing: Go to 'F11: Features' and enable batch-wise details for stock items.
2. Create Batches: While creating or altering stock items, assign batches with details such as batch number and expiry date.
3. Track Costs: Tally tracks costs for each batch separately, helping businesses identify the profitability of each batch.

Understanding Batch-Wise Costing lays the foundation for grasping the concept of Job Costing and its business benefits.

47. What Is Job Costing In Tally? How Is It Beneficial For Businesses?

Job Costing in Tally allows businesses to track costs associated with specific jobs, projects, or orders. This helps businesses allocate expenses accurately and monitor profitability for individual projects, making it an essential tool for project-based industries like construction, manufacturing, or consulting.

To set it up:

1. Create a Job Costing Ledger: Under 'Accounts Info,' create job-related cost centers for each job or project (e.g., 'Project A', 'Consulting Job').
2. Assign Jobs to Transactions: While entering transactions, assign them to the appropriate job cost center to track expenses such as labor, raw materials, or overhead costs.
3. Generate Reports: Use the 'Job Costing' report to view income and expenses for each specific job, allowing you to calculate job profitability and compare costs against projected budgets.
4. Real World Application: In a construction company, Job Costing in Tally helps track costs for individual projects like building houses. By assigning expenses to specific job centers, businesses can monitor profitability and compare actual costs with projected budgets.

Understanding job costing in Tally helps manage project expenses, which is crucial when handling partial payments for multiple invoices.

48. How Do You Handle A Scenario Where A Customer Has Multiple Outstanding Invoices But Makes A Partial Payment?

In Tally, handling partial payments for multiple outstanding invoices is straightforward. When a customer makes a partial payment, the payment can be allocated across the outstanding invoices, and Tally automatically adjusts the outstanding balances.

To manage partial payments:

1. Go to 'Receipt Voucher': Open the Receipt Voucher under the 'Accounting Vouchers' menu.
2. Enter the Partial Payment: Enter the amount received as part of the payment in the voucher.
3. Apply Payment to Specific Invoices: Click on the 'Allocations' button to specify which invoices the partial payment should be applied to. You can select multiple invoices, and Tally will allow you to allocate the payment proportionally or as per your preference.
4. Adjust Outstanding Balances: Tally will automatically reduce the outstanding amounts for each selected invoice based on the payment allocation.
5. Save the Transaction: Once the payment is allocated, save the transaction. Tally will update the outstanding balances for each invoice, and you will be able to see the adjusted due amounts in the customer's account.

Once you've handled outstanding invoices, the next step is managing sales orders and generating related reports in Tally.

49. What Are The Steps To Generate A Sales Order Report In Tally Erp 9?

Sales Order reports help businesses track the status of pending orders and manage delivery schedules. To generate a Sales Order report in Tally:

1. Go to 'Display': Select 'Day Book' or 'Sales Orders from the Gateway of Tally.'
2. Select 'Outstanding Receipts': Choose the option for sales orders.
3. Generate Report: You can filter by order status (e.g., Pending, Completed) and view the relevant data.

Once you’ve generated a Sales Order report, processing related transactions like credit notes for returns becomes essential.

50. How Do You Process A Credit Note In Tally For Returned Goods?

To process a credit note in Tally for returned goods:

1. Go to 'Sales Voucher': Choose the 'Credit Note' option.
2. Select the Customer: Choose the customer from whom goods were returned.
3. Enter Return Details: Specify the items, quantities, and rates being returned.
4. Save the Voucher: Tally automatically adjusts the customer’s outstanding balance.

This process ensures accurate tracking of goods returned and customer credit adjustments.

Also Read: What is Financial Analytics and Why is it Important?

Understanding practical tasks like credit note processing is crucial to preparing for your Tally interview success.

How Can You Succeed in Your Tally Interview? Key Considerations

A combination of technical expertise, problem-solving abilities, and practical knowledge is essential to succeed in your Tally interview. Interviewers typically look for candidates who can demonstrate a strong understanding of Tally's core features and application in real-world scenarios.

Here are the key considerations to excel:

• Technical Knowledge: Familiarize yourself with the advanced features of Tally, including automation tools, GST compliance, and inventory management.
• Problem-Solving Skills: Show that you can quickly troubleshoot issues in Tally, such as data discrepancies or voucher errors.
• Practical Application: Discuss how you have used Tally in real-world accounting tasks. Provide specific examples from internships or projects.
• Attention to Detail: Emphasize your ability to maintain accurate records and generate precise reports, which is critical in accounting software.
• Adaptability: Stay updated with new Tally versions and functionalities, as businesses seek professionals who can adapt to technological changes.

Also Read: Online Accounting Degree: Benefits, Programs, and Career Opportunities in 2025

To further enhance your preparation, upGrad offers tailored support to help you succeed in your Tally interview.

How Can upGrad Support Your Tally Interview Preparation

upGrad offers specialized programs to help you strengthen your Tally skills and prepare effectively for your interview. With courses designed to enhance your theoretical and practical knowledge of accounting software, you can build a solid foundation and gain confidence.

Here’s how upGrad can assist you in your Tally interview preparation:

• MBA from O.P. Jindal Global University (JGU)
• Master of Business Administration (MBA) from UGNXT
• Introduction to International Business Environment
• Understanding Culture and its Various Components
• Mastering the Art of Effective Communication
• Introduction to Entrepreneurship

Furthermore, contact upGrad’s counselors or visit your nearest career center for personalized guidance. With the right resources and support, you’ll be ready to tackle managerial challenges and build a standout management career. 

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Reference Link:
https://tallysolutions.com/tally/why-businesses-opt-for-tallyprime/?srsltid=AfmBOoqbKR5HjhzLit-8gl4WgfiK-c-EaUrVluwzIYQRMHAdOCO8Uqlh