SSCASC, TUMKUR

Introduction to MIS
Definition of MIS:
A Management Information System is an information system that evaluates, analyzes, and processes an
organization's data to produce meaningful and useful information based on which the management can
take right decisions to ensure future growth of the organization.
Managers are the key people in an organization who ultimately determine the destiny of the organization.
They set the agenda and goals of the organization, plan for achieving the goals, implement those plans
and monitor the situation regularly to ensure that deviations from the plan is controlled. This set of
activity ensures the smooth functioning of the organization and helps it attain its objectives. Hence, these
managers are vital for a successful organization. The managers in turn conduct these activities
collectively management functions. They decide on all such issues that have relevance to the goals and
objectives of the organization. The decisions range from routine decisions taken regularly to strategic
decisions, which are sometimes taken once in the lifetime of an organization. The decisions differ in the
following degrees,
1. Complexity of the decision.
2. Information requirement for taking the decision (What information needed to execute the
decision)
3. Relevance (How the decision is related to organization)
4. Effect on the organization (How the decision will improve the organization)
5. Degree of structured behavior of the decision-making process.

Characteristics of MIS:-
Management information being a specialized information system conforms to certain
characteristics. These characteristics are generic in nature. These characteristics remain more or
less the same even when the technology around such management information system changes:
1. Management oriented
This means that the system is designed around the need felt by the management at different levels
for information. The focus of the system is to satisfy the information needs of management and
hence it is top-down (Management to employee’s flow).
2. Management directed
*Management is involved in the designing process of MIS and also in its continuous review and
up gradation to develop a good qualitative system.
*The system is structured as per directions factored by management. This helps in minimizing the
gap between expectations of management form the system and the actual system.
3. Integrated
*MIS is integrated with all operational and functional activities of management.
*In order to provide a complete picture of the scenario, complete information is needed which
only an integrated system can provide.
4. Common data flows
*Through MIS the data being stored into the system, retrieved from the system and processed by
the system can be handled in an integrated manner.
*The integrated approach towards data management will result in avoiding duplication of data,
data redundancy and will help to simplify operations.
5. Strategic planning
MIS cannot be designed overnight. It requires very high degree of planning which goes into
creating an effective organization. The reason for this kind of planning is to ensure that the MIS

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being built not only satisfies the information need of the managers today but can also serve the
organization for the next five to ten years with modifications. Sometimes when the planning part
is done away with, systems tend to perform well in the present, but they tend to become obsolete
with time. Planning helps to avoid this problem.
6. Bias towards centralization
*Centralized data management helps MIS to do version control as well as to provide integrated
common view of the data to the managers.
*In a non-centralized system, data will get entered, updated and deleted from the system from
different locations. In such a case it becomes difficult to provide correct information to managers.
*A centralized system where data in entered, updated and deleted from only one location will be
updated in all the locations (common database)

Componenets of Management Information System:

Managing with information involve gathering the necessary data (crude input or raw material) and
processing these data into meaningful information. To understand MIS clearly, it is very much required to
define these three words management, information, and system. It can be described with the help of above
figure.

MIS Functions
The broad functions of MIS are as given below:
1. To improve decision-making: MIS helps management by providing background information on
a variety of issues and helps to improve the decision-making quality of management. The fast and
accurate information supplied by MIS is leveraged by the managers to take quicker and better decisions
thereby improving the decision-making quality and adding to the bottom line of the company.
2. To improve efficiency: MIS helps managers to conduct their tasks with greater ease and with
better efficiency. This reflects in better productivity for the company.
3. To provide connectivity: MIS provides managers with better connectivity with the rest of the
organization.

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The MIS has various components, which are as follows:

Thus, the following points can summarize the importance of MIS:

1. It helps in minimizing risk in decision making.

2. It processes the data and derives information out of them.

3. It provides information about the various aspects of business.

4. It helps the executives to avail the information regarding the functional areas quickly.

5. The database helps in inducting research. The data stored are used as secondary data.

6. It provides sound information regarding the financial health of business organization.

7. It helps in preparing corporate report.

Limitations and drawbacks of MIS are as follows:

The quality of the outputs of MIS is basically governed by the quality of inputs and processes.

MIS may not have requisite flexibility to quickly update itself with the changing needs of time, especially

in a fast changing and complex environment.

The effectiveness of MIS is reduced in organisation, where the culture of hoarding information and not

sharing with others hold.

MIS cannot provide tailor made information packages suitable for the purpose of every type of decision

made by executives.

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Framework for Understanding MIS

Management Levels in Organizations

Management Strategic Planning Management Operational Control

Function Control

Planning Long-range, high Medium range, Short range, low

impact medium impact
Impact

Organizing General framework Departmental level Small unit level

Staffing Key senior people Medium level, tactical Operational level

level

Directing General and long Tactics Routine activities

range
directives

Controlling Aggregate level Periodic control and Regular and

continuous
controlling exceptions
supervision

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The idea of an organization's hierarchy from the perspective of managerial activities. As is clear, it is a
three-level pyramid with very distinct levels. Each level has its own set of tasks and decisions to take
which have a varying impact on the organization as a whole.

Strategic Planning
This requires focusing on the objectives and goals of the organization, on changes in the objectives, on
the resource requirements to fulfill the objectives and on the guiding principles and policies that will
govern the acquisition, use and disposal of resources to attain the objectives. In short, this role is the most
important role in the management hierarchy and the decisions taken by managers in this role have a far-
reaching impact on the organization. Managers in this role set the direction in which the organization will
travel. In terms of hierarchy, this lies at the top.

Managerial Control
This requires that resources are acquired and used effectively and efficiently to attain the objectives of the
organization. This is a middle management role. Managers in this role take guidance from the strategic
planning hierarchy and control the activities of the organization such that the goals set by the higher level
are attained in an efficient and effective manner. The impact of the decisions of the managers in this role
is medium term and degree.

Operational Control
This requires that directives as set by the immediate higher hierarchy is followed and that specific task/s
are carried out effectively and efficiently. The decisions at this level have very little impact on the
organization. The organization behaves in a routine nature where the parameters of the decision-making
process are well laid and certain.

Levels of Management and Their Information Requirements

The common thread of activity in all the management functions is information management. Every
manager today has to manage loads of information some for the purpose of reporting and some for taking
actionable decisions. A marketing manager trying to fine-tune a sales strategy would be doing it only after
analyzing a lot of relevant information about the market, the customer profile, the product profile and
competitor's pricing strategy.
More and more corporations are investing in acquiring the latest management information system tools
like enterprise (wide) resource planning (ERP), customer relationship management (CRM), knowledge
management (KM), decision support system (DSS), business intelligence (BI) suites data warehouse
(OW) facility as they are convinced of the benefits of such huge investments.

Information Needs for the Different Levels of Management

The top level deals with strategy, the middle level with tactical issues and the bottom level with
operational issues.
The top level that deals with strategy will be taking strategic decisions, middle level will take tactical
decisions and entry level will take operational decisions. Now in order to take such decisions, contextual
information will need to be provided.

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Simon’s Model of Decision-Making

Herbert Simon made key contributions to enhance our understanding of the decision-making process. In
fact, he pioneered the field of decision support systems. According to (Simon 1960) and his later work
with (Newell 1972), decision-making is a process with distinct stages. He suggested for the first time the
decision-making model of human beings. His model of decision-making has three stages:
• Intelligence which deals with the problem identification and the data collection on the problem.
• Design which deals with the generation of alternative solutions to the problem at hand.
• Choice which is selecting the 'best' solution from amongst the alternative solutions using some
criterion.
The figure given below depicts Simon's decision-making model clearly.

Intelligence Phase
This is the first step towards the decision-making process. In this step the decision-maker
identifies/detects the problem or opportunity. A problem in the managerial context is detecting anything
that is not according to the plan, rule or standard.
An example of problem is the detection of sudden very high attrition for the present month by a HR
manager among workers. Opportunity seeking on the other hand is the identification of a promising
circumstance that might lead to better results. An example of identification of opportunity is-a marketing
manager gets to know that two of his competitors will shut down operations (demand being constant) for
some reason in the next three months, this means that he will be able to sell more in the market.
Intelligence phase of decision-making process involves:
Problem Searching: For searching the problem, the reality or actual is compared to some standards.
Differences are measured & the differences are evaluated to determine whether there is any problem or
not.
Problem Formulation: When the problem is identified, there is always a risk of solving the wrong
problem. In problem formulation, establishing relations with some problem solved earlier or an analogy
proves quite useful.

Design Phase
Design is the process of designing solution outlines for the problem. Alternative solutions are designed to
solve the same problem. Each alternative solution is evaluated after gathering data about the solution. The
evaluation is done on the basic of criteria to identify the positive and negative aspects of each solution.
Quantitative tools and models are used to arrive at these solutions. At this stage the solutions are only
outlines of actual solutions and are meant for analysis of their suitability alone. A lot of creativity and
innovation is required to design solutions.

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Choice Phase
It is the stage in which the possible solutions are compared against one another to find out the most
suitable solution. The 'best' solution may be identified using quantitative tools like decision tree analysis
or qualitative tools like the six thinking hats technique, force field analysis, etc.
Differentiate between structured and unstructured decisions

structured unstructured
1. Structured decisions are the decisions 1. unstructured decisions are made under the
which are made under the established emergent situation, for example fire
situations for example hiring a new breakout.
employee 2. unstructured decisions are creative and
2. Structured decisions are the they are not preplanned for example if fire
programmable decisions and they are break there and then manager can make
preplanned for example the payroll for decision unplanned.
employees. 3. unstructured decisions the situations are
3. Structured decisions are made in the uncertain and unclear.
situations which are fully understood 4. unstructured decisions are made for a
4. Structured decisions are generally made sudden one-shot kind of situations, for
for routine tasks, for instance the hiring of instance, dealing with a labor strike in a
new IT specialists in a firm factory.
5. Structured decisions are made for 5. unstructured decisions are made for
specified processes like specialized general processes.
manufacturing processes
6. Structured decisions have a well-defined 6. Unstructured decision rely on knowledge
methodology for finding a solution and and/or expertise and often require data
have the data to reach a decisions. They and models to solve, an example of an
are usually straight forward and made on unstructured decision in my company is
a regular basis, an example of a structured what types of new content should be
decision in my company is whether or not created and what market should be
to withdraw funds from an international targeted.
account depending on the current
exchange rate
7. structured decisions have a well defined
methodology for finding a solution and 7. Unstructured decision rely on knowledge
have the data to reach a decisions. They and/or expertise and often require data
are usually straight forward and made on and models to solve.
a regular basis.
An example of an unstructured decision in
An example of a structured decision in my company is what types of new content
my company is whether or not to should be created and what market should
withdraw funds from an international be targeted.
account depending on the current
exchange rate.

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How do formal and informal information systems differ?

Formal information system is composed of:

 information resources (archives, databases),

 information users (internal or external to the organization),
 information needs of users (employees or managers),
 communication subsystem (technology).
It is characterized by the following features:

 performs the functions of identification, diagnostics, and problem solving,

 resources and information needs of users are thematically related to various fields of
management (for example: finance, human resources, production),
 it is located in the organizational structure of the company as a IT division or IT department,
but it can also function in a distributed system.
Formal information system is used primarily for analysis, preparation and transfer of information. One
of many tasks of managers is development of

various types of presentation of the facts of any field of activity, reports, analyses, draft decisions. More
on this topic: Management information systemor Structure of strategic information system.

Informal information system covers all areas of the organization that is not described by the formal
organizational structure (organizational chart, procedures, work descriptions, organizational
documentation). Any contact between employees, customers or suppliers which are not described in
operational procedures enforced in the organization is a manifestation of the informal information system.

Examples of such informal communication may be:

 casual conversation,
 rumours about employees, customers, competitors,
 exchange of news on topics unrelated to work,
 messages in social media and blogs,
 conversation over coffee or lunch, etc.
Both formal and informal information system coexist in the organization and are essential to its smooth
functioning.

Developing Information systems:-

What Is Information Systems Analysis and Design?

Information systems analysis and design is a method used by companies ranging from IBM to PepsiCo
to Sony to create and maintain information systems that perform basic business functions such as
keeping track of customer names and addresses, processing orders, and paying employees. The main
goal of systems analysis and design is to improve organizational systems, typically through applying
software that can help employees accomplish key business tasks more easily and efficiently. As a
systems analyst, you will be at the center of developing this software.

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The analysis and design of information systems are based on: Your understanding of the organization’s
objectives, structure, and processes Your knowledge of how to exploit information technology for
advantage To be successful in this endeavor, you should follow a structured approach. The SDLC, is a
four-phased approach to identifying, analyzing, designing, and implementing an information system.
Throughout this book, we use the SDLC to organize our discussion of the systems development process.
Before we talk about the SDLC, we first describe what is meant by systems analysis and design.

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Introduction to E-commerce:-

What is Ecommerce?

Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling
of goods or services using the internet, and the transfer of money and data to execute these
transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also
describe any kind of commercial transaction that is facilitated through the internet.

OR

Electronic Commerce is more than just buying and selling products online. It also includes the entire
online process of developing, marketing, selling, delivering, servicing and paying for products and
services.

Examples of Ecommerce
Ecommerce can take on a variety of forms involving different transactional relationships between
businesses and consumers, as well as different objects being exchanged as part of these transactions.

1. Retail:
The sale of a product by a business directly to a customer without any intermediary.

2. Wholesale:
The sale of products in bulk, often to a retailer that then sells them directly to consumers.

3. Dropshipping:
The sale of a product, which is manufactured and shipped to the consumer by a third party.

4. Subscription:
The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses
to cancel.

5. Physical products:
Any tangible good that requires inventory to be replenished and orders to be physically shipped to
customers as sales are made.

6. Digital products:
Downloadable digital goods, templates, and courses, or media that must be purchased for consumption
or licensed for use.

7. Services:
A skill or set of skills provided in exchange for compensation. The service provider’s time can be
purchased for a fee.
Scope of e-commerce:-

E-commerce creates new opportunities for entrepreneurial start-ups. Ease of Internet access, Safe and
secure payment modes coupled with aggressive marketing by E-Commerce Giants has revolutionized
this segment. Rapid development in mobile technology has given way to Mobile Commerce with many
E-Commerce companies shifting to App only model.

Few of the basic advantage of E-commerce which is going to lead its success from front are:

 Time saving
 Environment friendly
 Saves space for physical stores and expenses related to it.
 Round the clock availability
 Unlimited business opportunity
 Unlimited options, etc.

The e-Commerce Trade Cycle:

 A trade cycle is the series of exchanges, between a customer and supplier, that take place when
a commercial exchange is executed. A general trade cycle consists of:
Pre-Sales: Finding a supplier and agreeing the terms.
Execution: Selecting goods and taking delivery.
Settlement: Invoice (if any) and payment.
After-Sales: Following up complaints or providing maintenance.
 For business-to-business transactions the trade cycle typically involves the provision of credit
with execution preceding settlement whereas in consumer-to-business these two steps are
typically co-incident. The nature of the trade cycle can indicate the e-Commerce technology
most suited to the exchange.
 Commercial transactions that are repeated on a regular basis, such as supermarkets
replenishing their shelves, is one category of trade cycle. EDI is the e-Commerce technology
appropriate to these exchanges, see Figure 1.
  Consumer transactions tend to be once-off (or at least vary each time) and payment is made at
the time of the order.Internet e-Commerce is the technology for these exchanges, see Figure 2.

 The third generic trade cycle is the non-repeating commercial trade cycle and Internet e-
Commerce or an electronic market is the appropriate e-technology.

Electronic markets

 Electronic markets (or electronic marketplaces) are information systems (IS) which are used by
multiple separate organizational entities within one or among multiple tiers in economic value
chains.
  First, the topology of electronic markets may be centralized or decentralized in nature.
Centralized electronic markets are hubs which often provide services to their participants.
Decentralized settings involve sequential relationships within value chains which often are
found when electronic messages are exchanged directly between businesses (electronic data
interchange, EDI).
 Second, the services provided by electronic markets may serve infrastructural or allocation
purposes. Among the infrastructure services are routing, messaging, identification and partner
directories whereas allocation services enable pricing process like price catalogs, exchanges and
auctions (bidding).

Types of eCommerce Business Models

There are six main types of ecommerce models that can describe almost every transaction that takes
place between consumers and businesses.

1. Business to Consumer (B2C):

When a business sells a good or service to an individual consumer (e.g. You buy a pair of shoes from an
online retailer).

2. Business to Business (B2B):

When a business sells a good or service to another business (e.g. A business sells software-as-a-service
for other businesses to use)

3. Consumer to Consumer (C2C):

When a consumer sells a good or service to another consumer (e.g. You sell your old furniture on eBay
to another consumer).

4. Consumer to Business (C2B):

When a consumer sells their own products or services to a business or organization (e.g. An influencer
offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo
for a business to use).

5. Business-to-Administration (B2A): In this kind of eCommerce transaction, there are dealings between
companies and public administration. It encompasses different services, such as social security, fiscal
measures, legal documents, employment and so on.
6. Consumer-to-Administration (C2A): In this eCommerce model, electronic transactions are carried
between individuals and public administration. Some examples are distance learning, information
sharing, electronic tax filing, and so on.
The main objective of both the B2A and C2A types of eCommerce is to increase flexibility, efficiency, and
transparency in public administration.
Intra business:-

*In an intra-Business transfer, a company transfers an item, or employee, to work temporarily in a

different office, often in another country. If the transfer requires that their employee move to a
different company, a special "intra-company transfer work permit" must be issued.
*There are controls to ensure that the foreign employee continues to be employed at their specified
position throughout their working period - the permit is valid for 2 years in most countries.

E-Business and E-Commerce Web Portals

A standard corporate e-business Web portal used for much of a company's online business presence can
encompass internal business systems (CRM, ERP, HR), enterprise communication and collaboration (e-
mail, voice mail, VoIP, content management, business process management), and e-commerce for
transmitting funds, goods, services and/or data between businesses (B2B) or between the business and
its retail/e-tail customers (B2C).

Electronic governance or e-governance is the application of information and communication

technology (ICT) for delivering government services, exchange of information, communication
transactions, integration of various stand-alone systems and services between government-to-citizen
(G2C), government-to-business (G2B), government-to-government (G2G), government-to-employees
(G2E) as well as back-office processes and interactions within the entire government
framework.Through e-governance, government services are made available to citizens in a convenient,
efficient, and transparent manner. The three main target groups that can be distinguished in governance
concepts are government, citizens, and businesses/interest groups. In e-governance, there are no
distinct boundaries.
Benefits of E-governance :

1.Speed – Technology makes communication speedier. Internet, Phones, Cell Phones have reduced the
time taken in normal communication.

2. Cost Reduction – Most of the Government expenditure is appropriated towards the cost of
stationary. Paper-based communication needs lots of stationary, printers, computers, etc. which calls for
continuous heavy expenditure. Internet and Phones makes communication cheaper saving valuable
money for the Government.

3. Transparency – Use of ICT makes governing profess transparent. All the information of the
Government would be made available on the internet. The citizens can see the information whenever
they want to see. But this is only possible when every piece of information of the Government is
uploaded on the internet and is available for the public to peruse. Current governing process leaves
many ways to conceal the information from all the people. ICT helps make the information available
online eliminating all the possibilities of concealing of information.

4. Accountability – Once the governing process is made transparent the Government is automatically
made accountable. Accountability is answerability of the Government to the people. It is the
answerability for the deeds of the Government. An accountable Government is a responsible
Government.
Well , I hope this may help. If you are looking for some E- governance services, then you can go for 3i
Infotech Services , a leading IT Company in this domain.

Definition of 'E-learning'

Definition: A learning system based on formalised teaching but with the help of electronic
resources is known as E-learning. While teaching can be based in or out of the classrooms, the use of
computers and the Internet forms the major component of E-learning. E-learning can also be termed as
a network enabled transfer of skills and knowledge, and the delivery of education is made to a large
number of recipients at the same or different times.

However, with the rapid progress in technology and the advancement in learning systems, it is now
embraced by the masses. The introduction of computers was the basis of this revolution and with the
passage of time, as we get hooked to smartphones, tablets, etc, these devices now have an importance
place in the classrooms for learning. Books are gradually getting replaced by electronic educational
materials like optical discs or pen drives. Knowledge can also be shared via the Internet, which is
accessible 24/7, anywhere, anytime.

The Knowledge Building (KB)

*It is used for describing what a community of learners needs to accomplish in order to
create knowledge. It addresses the need to educate people for the knowledge age society, in which
knowledge and innovation are universal.
*Knowledge building may be defined simply as "the creation, testing, and improvement
of conceptual artifacts. It is not confined to education but applies to creative knowledge work of all
kinds".
 SSCASC, TUMKURBachelor of computer science

INTRODUCTION TO ACCOUNTING IN TALLY ERP.9 GST

Definition: -
Accounting is a bookkeeping process that records transactions, keeps financial
records, performs auditing. It is a platform that helps through many processes, for
example, identifying, recording, measuring and provides other financial information.
The American Institute of Certified Public Accountants (AICPA) has defined
the financial accounting as “the art of recording, classifying and summarizing in a
significant manner in terms of money transactions and events which in part at least
of financial character and interrupting the results thereof.”
American Accounting Association (AAA)defines accounting as “the process of
identifying, measuring, communicating economic information to permit informed
judgements and decisions by users of the information”
The following attributes of accounting emerge
1. The art of recording business transaction
2. The art of classifying business transaction
3. The transactions or events of a business must be recorded in monetary.
4. It is summarizing financial transactions
5. It is an art of analyzing and interpretation these transactions
Functions and Objectives of accounting:-
The objectives and the functions of accounting are related to each other as the
functions lead to fulfilling the objectives. The main objective and function are to
support the decision-making process so that the employees and also the other users
can have many advantages.

Objectives of Accounting

The functions of accounting facilitate the objectives of accounting. there are many
objectives of accounting. For instance,

1. Accounting facilitates the systematic management of the records of the

transaction and other financial data.

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 SSCASC, TUMKURBachelor of computer science

2. It gives an idea about the chances of profitability or failure or losses.

3. The process assists the management by helping them to take the best
decisions. besides that, accounting ascertains the financial position of an
organization.
4. It also helps in the evaluation of the employee and their working efficiency,
in addition, communicating and spreading the accounting information to the
user.
5. Accounting contributes the biggest to any organization by preventing the
fraud and prevents the profit risks.

Functions of Accounting :-
1. Systematic record of business transactions
“the first main function of accounting to keep systematic record of business
transactions post them to ledger and ultimately to prepare the financial accounts”
2. Protecting the property of business
For performing this function, the accountant is require to develop such a system of
recording information so that asset of the business or not put to wrong use and a
complete record of the assets of the concern is available without any difficulty.
3. Communicating results to interested parties
This function requires to supply the meaningful information about the financial
activity of the business to the various parties i.e owners, creditors, investors,
employees, government, public, research, scholers and the managers at the right
time.
4. Compliance with legal requirements
The accounting system of any business should comply with the legal requirements.
Under various enactments a business man is required to file various statements.
Ex: Income tax return, Return of sale, tax purposes

Basic Terms of accounting

SOWJANYA.G
 SSCASC, TUMKURBachelor of computer science

Business Transaction

A business transaction is an event involving an interchange of goods, money or

services between two or more parties. The business transacted can be between two
parties engaged in business and conducting the transaction for their mutual
benefits, or between a business entity, like a retail shop, and a customer.

Debtor
Debtor is a person who owns money. The amount due from him is called debt.
Creditor:-
Creditor is a person to whom money is owing or payable is called creditor.
Capital (CAP)

Capital (CAP) definition: This is the owners financial interest or holding in the
business and is represented by the value of net assets.

Goods

This includes all articles, commodities in which the business deals and are for sales
purpose.

Ex: cloths or wood be goods for a dealer in cloth.

Assets:-

In financial accounting, an asset is any resource owned by the business. Anything

tangible or intangible that can be owned or controlled to produce value and that is
held by a company to produce positive economic value is an asset. Simply stated,
assets represent value of ownership that can be converted into cash

Equity

In accounting, equity (or owner's equity) is the difference between the value of the
assets and the value of the liabilities of something owned. It is governed by the
following equation:

Equity = Assets – liabilities

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 SSCASC, TUMKURBachelor of computer science

Income:-

A company's total earnings, also called net profit. Net income is calculated by
subtracting total expenses from total revenues.

Expenditure:

Definition: An expenditure is funds used by a business, organization, or

corporation to attain new assets, improve existing ones, or reduce a liability. In
other words, it’s the use of a resource in the operations of a business.

Expenses (fixed, variable, accrued, operation) (FE, VE, AE, OE)

Expenses (FE, VE, AE, OE) definition: The fixed, variable, accrued or day-to-day
costs that a business may incur through its operations.

 Fixed expenses (FE): payments like rent that will happen in a regularly
scheduled cadence.
 Variable expenses (VE): expenses, like labor costs, that may change in a
given time period.
 Accrued expense (AE): an incurred expense that hasn’t been paid yet.
 Operation expenses (OE): business expenditures not directly associated
with the production of goods or services—for example, advertising costs,
property taxes or insurance expenditures.
Drawings:-

The withdrawal of business cash or other assets by the owner for the personal use
of the owner. Withdrawals of cash by the owner are recorded with a debit to the
owner's drawing account and a credit to the cash account.

Loss

Various businesses experience losses in different forms. They may be the result of
a sale of an asset below its carrying amount, from a lawsuit, or a write-down of an
asset.

Voucher

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 SSCASC, TUMKURBachelor of computer science

Account voucher. A voucher is an accounting document representing an internal

intent to make a payment to an external entity, such as a vendor or service
provider.

Turnover:- It means total trading income from cash sales and credit sales.

Networth:- It means assets minus outside liabilities

Profits of a business increase networthwhere as loss reduce the
networth of a Business
Insolvent :- A person who cannot pay his debts is calle insolvent

Accounting Principles
Accounting principles based on certain concepts, convention, and tradition have
been evolved by accounting authorities and regulators and are followed
internationally.

Accounting Principles

Accounting Concepts Accounting Conventions

1. Business entity concept 1. Conservatism

2. Money measurement concept 2. Consistency
3. Dual aspect concept 3. Materiality
4. Going concern concept 4. Full disclosure
5. Cost concept
6. Accounting year concept
7. Matching concept
8. Realisation concept

Accounting Concepts

SOWJANYA.G
 SSCASC, TUMKURBachelor of computer science

1. Business entity concept: A business and its owner should be treated

separately as far as their financial transactions are concerned.
2. Money measurement concept: Only business transactions that can be
expressed in terms of money are recorded in accounting, though records of
other types of transactions may be kept separately.
3. Dual aspect concept: For every credit, a corresponding debit is made. The
recording of a transaction is complete only with this dual aspect.
4. Going concern concept: In accounting, a business is expected to continue
for a fairly long time and carry out its commitments and obligations. This
assumes that the business will not be forced to stop functioning and liquidate
its assets at “fire-sale” prices.
5. Cost concept: The fixed assets of a business are recorded on the basis of
their original cost in the first year of accounting. Subsequently, these assets are
recorded minus depreciation. No rise or fall in market price is taken into
account. The concept applies only to fixed assets.
6. Accounting year concept: Each business chooses a specific time period to
complete a cycle of the accounting process—for example, monthly, quarterly,
or annually or a calendar year.
7. Matching concept: This principle dictates that for every entry of revenue
recorded in a given accounting period, an equal expense entry has to be
recorded for correctly calculating profit or loss in a given period.
8. Realisation concept: According to this concept, profit is recognised only
when it is earned. An advance or fee paid is not considered a profit until the
goods or services have been delivered to the buyer.

Accounting Conventions
There are four main conventions in practice in accounting: conservatism;
consistency; full disclosure; and materiality.
Conservatism is the convention by which, when two values of a transaction are
available, the lower-value transaction is recorded. By this convention, profit should
never be overestimated, and there should always be a provision for losses.
Consistency prescribes the use of the same accounting principles from one period
of an accounting cycle to the next, so that the same standards are applied to
calculate profit and loss.
Materiality means that all material facts should be recorded in accounting.
Accountants should record important data and leave out insignificant information.

SOWJANYA.G
 SSCASC, TUMKURBachelor of computer science

Full disclosure entails the revelation of all information, both favourable and
detrimental to a business enterprise, and which are of material value to creditors
and debtors.

Advantages & Limitations of Accounting

Advantages of Accounting:

 Accounting helps to maintain the business records in a systematic manner.

 It helps in the preparation of financial statements.
 Accounting information is also used to compare the result of current year
with the previous year to analyze the changes.
 It helps the managers in the decision making process.
 It provides information to other interested parties such as shareholders,
creditors, investors, customers, government, employees, regulatory
bodies etc.
 It helps in taxation matter
 Accounting information can be produced as evidence in the legal matter.
 It helps in valuation of business.

Limitations of Accounting

 The items expressed in monetary terms are recorded in the accountings

where as the items which are nonmonetary (Ex: investment, profit making)
nature not recorded.
 Sometimes accounting data are recorded on the basis of estimates and which
could be inaccurate.
 Fixed assets are recorded as the original cost.
 Value of money does not remain stable so accounting value does not show
true financial results.
 Accounting can be manipulated and biased.

SOWJANYA.G
SSCASC, TUMKURBachelor of computer science

SOWJANYA.G
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Purchase quote and sales quote:-
Before placing an order, the buyer needs to find out the price of the goods. This is done by written
PURCHASE QUOTATION provided by the seller. Normally is created in: --> purchases --> purchase -->
quotation.

we also have Sales quote In OpenERP ( Sales tab - sale- quotation --> )

Purchase quotation and sale quotations are same thing with only difference purchase is made
for supplier when you want buy something, sales is made to customer when you are selling
something. Eg: you have a shop that assembles computers people go and ask you quotation in that
case you will give them sale quotation because they are your customer but when you want buy you
will do purchase quotation for your suppliers.

Delivery Note

Delivery note is used for recording goods delivered to the customer.

To configure the delivery note

1. Go to Gateway of Tally > F11: Features > F2: Inventory .

● Set Use tracking numbers (enables delivery and receipt notes) to Yes .

● P ress Ctrl+A to accept.

2. Go to Gateway of Tally > Inventory Vouchers

3. Click F8 : Dely Note . The delivery note appears.

4. Click F12: Configure . The Voucher Configuration screen appears as shown:

5. Set Accept Supplementary Details to Yes .

 6. P ress Ctrl+A to accept and return to the voucher screen.

Note: For more details on Delivery Note printing configurations refer Voucher Entry Configuration
To enter the delivery note
1. Select Party A/c Name from the List of Ledger Accounts .

2. Select Order No(s) from the List of Orders , if a purchase order exists for that supplier. The Party
Details screen appears as shown below:

3. Enter the required information in the Party Details screen.

4. Select the Order No(s) . If the Order No(s) is selected, the item name,quantity, rate and amount are
displayed automatically.

Note: For more details on F12: Configure refer Invoice/Order Entry Configuration .

5. Press Enter . T he Stock Item Allocations screen appears as shown below:

 6. Select existing Tracking No. or create a new tracking number.

Note: A Delivery Note with Tracking No. marked as Not Applicable will be an inventory document,
affecting only the inventory values. This will not affect the accounts.
The Delivery Note appear as shown below:

7. Enter Narration , if required.

8. Press Enter to save.

Receipt Note

Receipt note is used for recording goods received from the supplier.

To configure the receipt note

1. Go to Gateway of Tally > F11: Features > F2: Inventory .
 o Set Use tracking numbers (enables delivery and receipt notes) to Yes .
o P ress Ctrl+A to accept.

2. Go to Gateway of Tally > Inventory Vouchers

3. Click F9 : Rcpt Note . The De note appears.

4. Click F12: Configure . The Voucher Configuration screen appears as shown:

5. Set Accept Supplementary details to Yes .

6. P ress Ctrl+A to accept and return to the voucher screen.

Note: For more details refer Receipt Note Printing Configuration .

To enter the Receipt Note voucher
1. Select Party A/c Name from the List of Ledger Accounts .

2. Select Order No(s) from the List of Orders , if a purchase order exists for that supplier.

The Party Details screen appears as shown:

GSTR-1 Report

GSTR-1 has to be filed by a taxable person registered under GST. GSTR-1 returns can be generated from
Tally.ERP 9 in the JSON format , and uploaded to the portal for filing returns.

You need to file GSTR-1 returns:

● Every month, for aggregate turnover exceeding Rs. 1.5 crores.

● Every quarter, for aggregate turnover up to Rs. 1.5 crores.

 GSTR-1 includes the details of all outward supplies of B2B invoices, B2C invoices, adjustments to sales
made in debit/credit notes, exports, nil rated invoices, advances received with tax adjustments.

To view the report in the format provided by GST

● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR–1 . The report displays the
data for a month or quarter depending on the Periodicity of GSTR-1 set in the Company GST
Details screen.

GSTR-2 Report in Tally.ERP 9

GSTR-2 report includes the details of all inward supplies made in the given period.
Note: The GST council has deferred filing of GSTR-2 returns until 31st March 2018. Accordingly, the
uploading, saving, and submitting of GSTR-2 are suspended on the GST portal. When GSTR-2 is
reintroduced you can generate the returns from Tally.ERP 9.
The inward supply details include B2B invoices to registered and unregistered dealers, import of goods
and services, adjustments to purchases in debit/credit notes, nil rated invoices, advances paid and
adjusted, and tax credit reversed or re-claimed.

GSTR-3B

Form GSTR-3B is an interim return form the GST dealers with regular registration should use, to file
monthly returns. From Tally.ERP 9, you can generate GSTR-3B, export the data in the JSON format, and
upload it to the portal to file the returns.

In Tally.ERP 9, you can view GSTR-3B in the report format with tax computation details. This report can be
changed to the return format view (specified/prescribed by the department) with the click of a button.

To view the GSTR-3B report

● Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-3B .

Payroll

The payroll feature in Tally.ERP 9 is fully integrated with accounting to streamline payroll processing.

Organizations can set up, implement and process payroll using simple and complex criteria. A collection of
predefined processes in Tally.ERP 9 enables error-free automation of payroll process.
 The payroll feature also provides management related information, statutory forms and reports in the
prescribed formats such as:

● Pay SlipPayroll Statements, Attendance and Overtime Registers.

● Gratuity, Provident Fund (PF), Employee State Insurance (ESI), National Pension Scheme (NPS).

● Professional Tax (PT) and Income Tax (IT).

● Expat Reports.

3. Enter the required information in the Party Details screen.

4. Select the Order No(s) . If the Order No(s) is selected, the item name,quantity, rate and amount will
be displayed automatically.

Note: For more details on F12: Configure refer Invoice/Order Entry Configuration .

5. Press Enter . T he Stock Item Allocations screen appears as shown:

 6. Select existing Tracking No. or create a new tracking number.

Note: A Receipt Note with Tracking No. marked as Not Applicable will be an inventory document, affecting
only the inventory values. This will not affect the accounts.
A purchase voucher with Tracking No. marked as Not Applicable will update the accounts without
increasing the stock. The Purchase Bills Pending list is generated as Bills recd. but Goods not recd.
The Receipt Note appear as shown below:

7. Enter Narration , if required.

8. Press Enter to save.