Accounting Basics for Students: Company, Ledgers, and Vouchers
A clean, visual LMS-style guide built with Bootstrap. Learn installation, create your company, set up ledgers & groups, and master payment/receipt/contra/journal vouchers with crisp examples.
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What you'll learn
This micro-course covers the practical steps to start accounting in any small/medium business accounting tool (e.g., Tally, Busy, Zoho Books). The workflow is identical across tools:
- Installation Install and set prerequisites.
- Company Create a company with fiscal year & base currency.
- Ledgers & Groups Create chart of accounts (COA).
- Vouchers Record Payment, Receipt, Contra & Journal entries.
Installation & Environment
5–10 minutes • Windows/MacGet the latest installer from the vendor. Choose 64‑bit. Follow default prompts (path, desktop shortcut, allow firewall if asked).
Ensure you have admin rights, stable internet (for activation), and system date set correctly. Keep your organization’s GSTIN/PAN handy (if applicable).
Make a dedicated
D:\AccountingData\YourCompany
folder. Enable automatic backups in the software to a
cloud drive.
Set base currency (INR), locale (India), and financial year start (commonly April 1 in India).
Creating a Company
Company master for books of accounts- Name & Legal Details: Company Name, Address, Country, State, GSTIN, PAN.
- Financial Year: Start date (e.g., 01-Apr-2025) and books beginning date (same unless migrating).
- Currency & Symbols: INR ₹, number formats (1,23,456.78).
- Security: Set an Admin password. Optionally enable user roles (Data Entry, Auditor view).
- Backups: Turn on auto-backup. Keep a weekly offsite backup.
Ledgers & Groups (Chart of Accounts)
Foundation of transactionsGroups organize ledgers into major heads. Typical top-level groups:
Assets
Cash, Bank, Debtors, Inventory, Fixed AssetsLiabilities
Creditors, Loans, Duties & TaxesIncome
Sales, Interest IncomeExpenses
Purchases, Rent, Salaries, UtilitiesCreating Ledgers
- Cash → Group: Cash-in-Hand
- HDFC Bank → Group: Banks (set account number & branch)
- Sales → Group: Sales Accounts (set GST rate if applicable)
- Purchases → Group: Purchase Accounts
- Rent Expense → Group: Indirect Expenses
- ABC Traders (Customer) → Group: Sundry Debtors
- XYZ Supplies (Vendor) → Group: Sundry Creditors
| Ledger | Group | Type | Examples/Notes |
|---|---|---|---|
| Cash | Cash-in-Hand | Asset | Petty cash & hand cash balances |
| Bank A/C (HDFC) | Banks | Asset | Enable bank reconciliation |
| Sales | Sales Accounts | Income | Set tax class (GST 18% etc.) |
| Purchases | Purchase Accounts | Expense | Link to inventory if using stock |
| Rent Expense | Indirect Expenses | Expense | Attach landlord details for TDS if applicable |
| ABC Traders | Sundry Debtors | Asset | Customer credit limit & terms |
| XYZ Supplies | Sundry Creditors | Liability | Vendor GSTIN and payment terms |
Basic Voucher Entries
Payment • Receipt • Contra • Journal- Assets/Expenses ↑ → Debit; ↓ → Credit
- Liabilities/Income/Capital ↑ → Credit; ↓ → Debit
Use when: Paying expenses, suppliers, purchases, withdrawals.
| Date | Particulars | Dr | Cr |
|---|---|---|---|
| 05-Apr-2025 | Rent Expense A/c Dr | ₹25,000 | |
| To HDFC Bank A/c | ₹25,000 |
Narration: "Being office rent for April paid by NEFT." Attach bill/receipt.
Use when: Receiving from customers, interest, capital introduced.
| Date | Particulars | Dr | Cr |
|---|---|---|---|
| 06-Apr-2025 | HDFC Bank A/c Dr | ₹40,000 | |
| To ABC Traders | ₹40,000 |
Narration: "Being part payment received against Inv# 112." Add receipt number/UTR.
Use when: Cash deposit to bank, cash withdrawal from bank, transfer between own bank accounts.
| Date | Particulars | Dr | Cr |
|---|---|---|---|
| 07-Apr-2025 | HDFC Bank A/c Dr | ₹15,000 | |
| To Cash A/c | ₹15,000 |
Narration: "Cash deposited into HDFC Bank." No income/expense ledgers involved.
Use when: Accruals, provisions, depreciation, error corrections.
| Date | Particulars | Dr | Cr |
|---|---|---|---|
| 30-Apr-2025 | Depreciation Expense A/c Dr | ₹5,000 | |
| To Furniture & Fixtures A/c | ₹5,000 |
Narration: "Monthly depreciation provided @ 10% p.a." Attach working papers.
Common mistakes to avoid
- Using Payment/Receipt instead of Journal for non-cash adjustments.
- Posting sales/purchase without proper tax ledgers configured.
- Creating customer/vendor as Income/Expense ledgers (they should be Debtors/Creditors).
Roadmap: From Zero to Confident Beginner
Follow this path
1) Install & Configure
Install software, set financial year, base currency, users, and backups.
2) Create Company & Masters
Set up company, then groups and ledgers (COA). Add customers & vendors.
3) Record Basic Vouchers
Practice Payment, Receipt, Contra, Journal with narrations & docs.
4) Reconcile & Review
Bank reconciliation, trial balance, P&L and Balance Sheet checks.
Practice Labs & Quick Quiz
Try these scenarios in your demo companyLab 1: Opening Balances
- Create ledgers: Cash (₹8,000), HDFC Bank (₹22,000), Capital (₹30,000).
- Use Journal to post opening balances so that Assets = Liabilities + Capital.
Lab 2: Day-to-day
- Pay office rent ₹20,000 by bank (Payment).
- Receive ₹35,000 from ABC Traders (Receipt).
- Deposit ₹10,000 cash to bank (Contra).
Lab 3: Adjustments
- Provide depreciation ₹3,000 on Furniture (Journal).
- Create provision for expenses ₹5,000 (Journal).
Self-check Quiz
You're ready for the next step
Proceed to Sales/Purchase vouchers, tax ledgers, and bank reconciliation in the next module.
