Let’s Start from the begining,iam not going to teach you the entire accounting (i wish if icould !!)just basic that is required to learn Tally

Definition of Accounting

“Accounting is the art of recording ,classifying and summarising in a significant manner and in terms of money,transactions and event accounting termwhich are, in part at least ,of a financial charecter and interpreting the result thereof “.

The purpose of accounting is to provide financial information about any economic entity,a business enterprise. the management required this information to plan and control the business activities.

What is Business Transaction

Simply Transaction is the buying and selling of goods and services.I think no need of much explanation.

Asset

Assets are econmic resourses which are owned by a business.or in other words Assets are things of value owned by a business.Asset may have definite physical charector for example, building machinery etc or may not have physical charector for example, amount due from creditors, patent right etc The first one is called tangible asset and the latter is intangible asset. Asset can be classified in to two
  • Fixed Asset :- These type asset are purchased for longer run of business for example : land an buildng, machineries, these assets are not for reselling but for the purpose of smooth running of the business.
  • Current Asset :-Assets That are held for a short period and are meant for converting in to cash. for exaple cash, stock, debtors etc.

Liabilities

Liabilities are debts.It is the amount which a business owes and has to be repaid.The liabilities are arising from purchase of goods or services on credit basis is called an account payable, and the person to whome it is to be payable is called creditor

Capital

Capital refers to the amount invested by the owner of the business. it is also called Owner’s equity Capital= Total Asset – Total Liabilities. Capital is Liability to the business.Business owes money to the owner .Business has a seperate entity apart from its owner.As per accounting concept business and its ownership is distinct.

Debtors

Debtor is a person who owes money to the business. Debtor is the customer to whome the goods/services are sold on credit. A group of debtors is called Sundry Debtors

Creditors

Creditor is a person to whome business owes money or creditor is any person who gives credit to the business.a group of creditors is called
Sundry Creditors

Expense

Expenses are cost incurred for generating revenue. examples of expenses are transportation,salary to employee,

Revenue

It refers income of recurring nature from any source related to business.

Entry

Recording of Transaction in a books of accounts is called entry.That is all about some important Terms to understand if you feel some other terms are important for beginers please let me know. Let’s move on to the next lesson

Purchase

Purchase is considered as the main expenses of a business. Purchase of goods for selling purposes to generate income is called Purchase.Purchase of stationery, assets will not comes under the term “purchase”. Purchases may be cash purchase or credit purchases.

Purchase Return

Goods once purchased , returned to supplier due to damage, inferior quality. etc. This is just opposite of Purchase ( for easy understanding purposes.you can think it as sales.remember it is not sales I said only for understanding purpose )

Sales

Sales is the main income source of the business,a business generates income through sales. Goods sold for the purpose of making profit is called sales.

Sales Return

Goods once sold returned by custumer due to damage, inferior quality etc. Sales return is just opposite of sales. (for easy understandng you can treat it as purchase. remember it is not purchase this is for easy understanding purpose only)