Lesson 9 of 20

Journal voucher (F7)

The Journal is for everything that has no cash and no bank in it: adjustments, transfers between ledgers and corrections.

When to use it

• Year-end adjustments: depreciation, outstanding expenses, prepaid expenses, accrued income.
• Discount allowed or received on settlement.
• Bad debts written off.
• Goods taken by the owner, given as samples or lost.
• Transfer from one ledger to another: correcting an entry made under the wrong ledger.
• Purchase or sale of a fixed asset on credit, in offices that record these by journal.
• Tax adjustments and set-offs.

By default Tally does not let you use Cash or Bank ledgers in a Journal, which protects you from using it where a Payment, Receipt or Contra belongs.

Steps

1. Gateway of Tally > Vouchers, press F7.
2. F2 for the date. Adjustments are usually dated the last day of the month or year.
3. Enter the debit line: "Dr" (shown as By in some layouts), the ledger and the amount.
4. Enter the credit line: "Cr" (To), the ledger and the amount.
5. Add more lines if needed. Tally shows the totals; debit and credit must be equal before it will save.
6. Narration, then Ctrl+A.

Examples

1. Depreciation of ₹6,000 on furniture for the year.

Depreciation is a ledger under Indirect Expenses.

2. Salaries of ₹30,000 for March are due but will be paid in April.

Salaries Payable is under Current Liabilities. When the salaries are paid in April, the Payment voucher debits Salaries Payable, not Salaries.

3. Insurance of ₹12,000 was paid in January for a year; ₹9,000 relates to next year.

Prepaid Insurance is under Current Assets (Loans & Advances).

4. A customer's balance of ₹3,500 is irrecoverable.

5. Discount of ₹1,000 received from a supplier on settlement.

6. The owner took goods costing ₹2,000 for personal use.

Where stock items and GST are maintained, such a withdrawal also needs the stock to be reduced and the input tax on those goods to be reversed. Ask your accountant for the office's method.

7. Electricity of ₹2,400 was wrongly debited to Shop Rent.

For a simple mistake like this you could instead open the original voucher from the Day Book and change the ledger. A correcting journal is used when the period is closed or the office wants corrections to be visible.

8. A compound entry: furniture bought on credit for ₹40,000 plus a ₹1,500 delivery charge, from Modern Furnishers.

Delivery and installation are part of the cost of the asset.

Thinking through a journal

1. Name the two ledgers affected.
2. Say what kind each is: asset, liability, income or expense.
3. Say whether each has gone up or down.
4. Apply the rule: assets and expenses increase by debit; liabilities, capital and income increase by credit.

If this is slow, practise on our neighbour site's debit and credit quiz.

Common mistakes

• Using a Journal for a transaction that involved cash or bank.
• Passing an adjustment and forgetting its reversal or settlement in the next period, as with outstanding salaries.
• Unequal totals from a typing slip; Tally will not save until they agree, so look for the wrong figure, do not force a balancing line.
• Vague narrations. For adjustments, the narration is the only explanation an auditor will have.

Next: Purchase voucher.

Questions learners ask

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An independent learning site. Tally and TallyPrime are trademarks of Tally Solutions Private Limited. This site is not connected with, approved by or paid by Tally Solutions, and uses none of its logos, screens or course material. Keys and menu paths were checked against Tally's own help site on 12 November 2026; the software changes with each release, so if your screen differs, follow Tally's help (press Ctrl+F1). Tax treatment in the examples is for learning only: ask your accountant.