Accounting and ERP Software: Tally/ERP Concepts, GST Basics and Business Process Integration Questions

Question 1

Define accounting software.

Accepted Answer

Accounting software is a computerized system used to record, classify and summarize business transactions and to generate accounting reports.

Question 2

Write the full form of ERP.

Accepted Answer

ERP stands for Enterprise Resource Planning.

Question 3

What is GST?

Accepted Answer

GST (Goods and Services Tax) is an indirect tax levied on the supply of goods and services in India.

Question 4

Name any one voucher used in Tally.

Accepted Answer

Sales voucher (any one: Sales, Purchase, Receipt, Payment, Contra, Journal).

Question 5

State any one benefit of computerized accounting.

Accepted Answer

It provides faster and more accurate accounting with instant reports (any one benefit).

Question 6

Write any three advantages of accounting software in business.

Accepted Answer

1) Accounting software saves time because calculations and posting are automatic.
2) It reduces errors and improves accuracy through validation and automatic totals.
3) It generates reports instantly such as ledger, trial balance, profit & loss and balance sheet for better decision-making.
(Any three points can be written.)

Question 7

Differentiate between manual accounting and computerized accounting (any three points).

Accepted Answer

Manual accounting is recorded in books and calculations are done by hand, whereas computerized accounting is entered in software and calculations are automatic.
Manual accounting is slow and report preparation takes time, whereas computerized accounting is fast and reports are generated instantly.
Manual accounting has higher chance of arithmetic/posting errors, whereas computerized accounting reduces errors due to validation and automatic totals.
(Any three differences can be written.)

Question 8

Explain any three vouchers in Tally with their use.

Accepted Answer

1) Receipt voucher: used to record money received in cash or bank from customers.
2) Payment voucher: used to record payments made in cash or bank such as rent, salary, electricity, supplier payment.
3) Contra voucher: used to record cash-to-bank, bank-to-cash or bank-to-bank transfers, like depositing cash in bank.
(Any three vouchers with use can be written.)

Question 9

Write a short note on Input Tax Credit (ITC).

Accepted Answer

Input Tax Credit (ITC) is the credit of GST paid on purchases/inputs which a registered business can use to reduce the GST payable on sales.
For example, if GST paid on purchases is ₹5,000 and GST collected on sales is ₹8,000, then the net tax payable is ₹8,000 − ₹5,000 = ₹3,000 (subject to GST rules).
ITC avoids double taxation and reduces overall tax burden on business.

Question 10

Explain the need and importance of accounting software in business.

Accepted Answer

Accounting software is needed in business because the number of transactions is large and they must be recorded correctly and quickly. Manual accounting becomes slow and error-prone, and preparing reports takes a lot of time.

Firstly, accounting software saves time because posting, totals and calculations are automatic. Once entries are made, the software prepares ledger accounts, trial balance, profit and loss account and balance sheet without repeating work.

Secondly, it improves accuracy and reduces errors. Validation rules, automatic calculations and proper voucher entry reduce arithmetic mistakes and wrong totals.

Thirdly, it provides updated information at any time. The owner can immediately know cash balance, bank balance, customer outstanding, supplier payable and stock value, which helps in day-to-day decisions.

Fourthly, it supports proper control and record keeping. Data can be secured with user rights and audit features in many systems, and regular backups protect data from loss.

Lastly, it helps statutory compliance like GST. The software generates GST invoices with correct tax breakup and provides reports required for filing returns.

Therefore, accounting software makes business accounting faster, more accurate, and more useful for reporting and decision making.

Question 11

Explain important vouchers in Tally and their purpose (any five).

Accepted Answer

In Tally, vouchers are used to record different types of business transactions. Important vouchers and their purpose are as follows:

1) Sales voucher: Used to record sales invoice to customers. It records sales amount, GST (if applicable) and updates customer (debtor) balance.

2) Purchase voucher: Used to record purchase invoice from suppliers. It records purchase amount, input GST and updates supplier (creditor) balance.

3) Receipt voucher: Used to record money received in cash or bank, such as cash received from customer or payment received by bank.

4) Payment voucher: Used to record payments made in cash or bank, such as rent payment, salary payment, electricity bill payment or supplier payment.

5) Contra voucher: Used to record transfer between cash and bank or bank to bank, such as cash deposited in bank or cash withdrawn from bank.

6) Journal voucher: Used to pass adjustment entries which do not involve cash/bank, such as depreciation, provisions, outstanding expenses, or transfer entries.

7) Credit note and Debit note: Credit note is used for sales return/discount to customer, and debit note is used for purchase return/claim to supplier.

Thus, vouchers provide a proper and systematic method to record transactions and help in generating correct accounting reports.

Question 12

Explain GST types (CGST, SGST, IGST) with suitable example.

Accepted Answer

GST is an indirect tax on supply of goods and services. Under GST, tax is classified as CGST, SGST and IGST depending on whether the supply is within the same state or between states.

CGST (Central GST) is collected by the Central Government on intra-state supply.
SGST (State GST) is collected by the State Government on intra-state supply.
So, when a seller and buyer are in the same state, GST is divided into CGST and SGST.

IGST (Integrated GST) is collected by the Central Government on inter-state supply. When seller and buyer are in different states, IGST is charged instead of CGST and SGST.

Example (intra-state): If taxable value is ₹10,000 and GST rate is 18% within the same state, then CGST @9% = ₹900 and SGST @9% = ₹900. Total GST = ₹1,800 and invoice total = ₹11,800.

Example (inter-state): If the same goods are sold to another state at 18% GST, then IGST @18% = ₹1,800 and invoice total = ₹11,800.

Therefore, CGST+SGST apply for intra-state transactions and IGST applies for inter-state transactions.

Question 13

Write the full form of GSTIN.

Accepted Answer

GSTIN stands for Goods and Services Tax Identification Number.

Question 14

Differentiate between Debit Note and Credit Note (any three points).

Accepted Answer

Debit Note and Credit Note are used to record returns/adjustments in business transactions.

1) Debit Note is issued by the buyer to the seller (supplier), whereas Credit Note is issued by the seller to the buyer (customer).
2) Debit Note is generally used for purchase return/claim/short supply, whereas Credit Note is generally used for sales return/discount/allowance.
3) Debit Note increases the amount receivable by the buyer from the seller (or reduces payable), whereas Credit Note reduces the amount receivable from the customer (or reduces sales).

(Any three differences can be written.)

Question 15

Explain any three benefits of ERP for business.

Accepted Answer

ERP provides an integrated system for different departments.

1) Better coordination: Sales, purchase, inventory and accounts share the same data, so duplication and delays reduce.
2) Real-time information: Managers get updated reports on stock, sales, production and finance for quick decisions.
3) Improved control: Standardized processes, permissions and audit trails improve monitoring and reduce errors.

(Any three benefits can be written with brief explanation.)

Accounting and ERP Software: Tally/ERP Concepts, GST Basics and Business Process Integration

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