Question

Prepare cash account in Tally from the following transactions: 

Hint:

In Tally, you can easily manage cash transactions and track inflows and outflows through the Cash Account. Make sure to maintain a balance and keep track of every cash transaction accurately.

Answer 1

Step 1: Understand the Cash Account. 
A Cash Account in Tally will track all cash-related transactions, including cash received (inflow) and cash paid (outflow). We will prepare the account with the following entries: 
Step 2: Transactions in the Cash Account. 
1. Nov. 1: When the business started, ₹2,00,000 was brought in as cash. This is an inflow to the cash account: \[ \text{Cash Account} \text{Dr.} 2,00,000 \text{(Credit entry on the right side)} \] 2. Nov. 5: Cash paid for repair of machinery (outflow): \[ \text{Cash Account} \text{Cr.} 20,000 \text{(Debit entry on the left side)} \] 3. Nov. 9: Cash paid for refreshment expenses (outflow): \[ \text{Cash Account} \text{Cr.} 20,000 \text{(Debit entry on the left side)} \] 4. Nov. 12: Cash paid for the purchase of stationery (outflow): \[ \text{Cash Account} \text{Cr.} 2,000 \text{(Debit entry on the left side)} \] 5. Nov. 20: Cash received from the sale of stationery (inflow): \[ \text{Cash Account} \text{Dr.} 3,000 \text{(Credit entry on the right side)} \] Step 3: Closing the Account. 
Finally, the closing balance in the cash account will be calculated by subtracting the total cash paid from the total cash received. This can be done by adding the inflows and subtracting the outflows.