Tally PRIME

Profit & Loss Account – Frequently Asked Questions- Tally Prime

Posted by Asok K Nadhani on

FAQ: Frequently Asked Questions

FAQ-1  : In a Proprietorship firm,  how to transfer the entire amount of Current Year loss to Capital Account

Ans : You have to transfer the net current year loss from Profit & Loss Account to Proprietor’s Capital Account, through Journal Voucher as follows :

  • Proprietor’s Capital Account Dr (Net Loss of current year)
    • Profit & Loss Account Cr (Net Loss of current year)

In case of Profit,  the above Journal Entry would be changed as follows:

  • Dr   Profit & Loss Account                           (Net Profit of current year)
  • Cr   Proprietor’s Capital Account                                          (Net Profit of current year)

This Journal Entry should be made only after finalization of Accounts. If there is any subsequent modification in accounts which affect the net Profit, the Journal Voucher has to be edited suitably changing the amount of voucher accordingly.

In the Balance Sheet, the amount transferred from Profit & Loss Account would be shown as a separate Item as Transferred.

FAQ-2 In a Partnership firm, how to transfer the entire amount of Profit  for the current year to respective Partner’s Capital Account in the agreed Profit Sharing Ratio

Ans.  You have to transfer the net current year Profit from Profit & Loss Account to Proprietor’s Capital Account, through Journal Voucher as follows

  • Profit & Loss Account  Dr (Amount of Net Profit)
    • Partner 1  Capital Account Cr ( Share of Partner 1  of the Net Profit of current year)
    • Partner 2  Capital Account Cr ( Share of Partner 2 of Net Profit of current year)

(……. Like this for each Partner)

FAQ-3 :  In a Company, the Directors decided to transfer Rs 50000 from Profit  for the current year to General Reserve Account. How transfer the Amount to General Reserve.  

Ans. You have to transfer  Rs 50000 from current Profit & Loss A/c to  General Reserves (create  General Reserve Account under the Group Reserves & Surplus), through Journal Voucher as follows :

  • Profit & Loss Account Dr 50000
    • General Reserve Account Cr  50000

FAQ- 4 In a Company, the Directors decided to show the current year loss to Misc Expenses in Balance Sheet, instead of showing the loss amount under Profit & Loss Account

Ans :You have to transfer the current year loss to Misc Expenses  (create an Account Misc Expenses  under the Group Misc Expenses (Asset)), through Journal Voucher as follows :

  • Misc Expenses Dr  (Amount of current year loss)
  • Profit & Loss Account Cr  (Amount of current year loss)

FAQ-5 What you get when you drill down through a Group in P L Statement Display

Ans : You get Group Summary showing the Balances of next Level Groups / Ledger Accounts of the selected Group

FAQ-6  What you get when you drill down through a Ledger in P L Statement  Display

Ans : You get Ledger Monthly Summary showing the monthly summary figures for each month of the selected Ledger Account