Tally Interview Questions & Answers (2024)

Job interviews can be tough. You worry about what questions the interviewer will ask and how to answer them well. This is especially true for accounting software like Tally, where the questions can be very specific. We understand your concerns and want to help you succeed. 

This article provides common Tally interview questions and answers. It covers basic and advanced topics to prepare you for any interview. With this resource, you will feel more confident and ready to land your dream job.

Why Tally Skills are in Demand

Companies want to hire people who know Tally. Tally is important in accounting and finance roles. It helps professionals do their jobs faster and more accurately. Read on to learn how your skills can help you get a job:

• Accounting: Tally helps accountants record financial transactions. It helps them prepare financial statements. It also helps them manage accounts payable and receivable.
• Finance: Tally helps finance professionals track budgets and expenses. It helps them analyse financial data. It also helps them make financial forecasts.
• Taxation: Tally helps tax professionals calculate taxes. It helps them prepare tax returns. It also helps them comply with tax regulations.
• Inventory Management: Tally helps businesses track their inventory levels. It helps them manage their stock. It also helps them prevent stockouts.
• Payroll Management: Tally helps businesses manage their payroll. It helps them calculate salaries and wages. It also helps them deduct taxes.

Tally skills are in demand because it is a versatile software. It can be used in many different industries. 

Some of the industries that use Tally include:

• Manufacturing: Manufacturing companies use Tally to track their production costs. They use it to manage their inventory. They also use it to track their sales.
• Retail: Retail businesses use Tally to track their sales. They use it to manage their inventory. They also use it to track their customer data.
• Healthcare: Healthcare organisations use Tally to manage their finances. They use it to track their patient data. They also use it to track their expenses.
• Education: Educational institutions use Tally to manage their finances. They use it to track their student data. They also use it to track their expenses.
• Government: Government agencies use Tally to manage their finances. They use it to track their expenses. They also use it to track their assets.

Tally skills are in demand because it is a popular software. Many businesses use it. This means that there is a high demand for professionals who know how to use Tally. If you are a job seeker, learning Tally can help you get a job. It can also help you advance your career.

Other reasons why Tally skills are in demand include:

• Cost-effective: Tally is a cost-effective solution for businesses. It is affordable to purchase and maintain. This makes it a popular choice for small and medium-sized businesses.
• User-friendly: Tally is easy to use. Even people with no accounting experience can learn how to use it. This makes it a popular choice for businesses that do not have a dedicated accounting department.
• Comprehensive: Tally is a comprehensive accounting software. It can be used for a variety of tasks, such as recording financial transactions, preparing financial statements, managing accounts payable and receivable, tracking budgets and expenses, analysing financial data, making financial forecasts, calculating taxes, preparing tax returns, complying with tax regulations, tracking inventory levels, managing stock, preventing stockouts, managing payroll, calculating salaries and wages, and deducting taxes.
• Customizable: Tally can be customised to meet the specific needs of a business. This makes it a popular choice for businesses that have unique accounting requirements.
• Scalable: Tally can be scaled to meet the needs of a growing business. This makes it a popular choice for businesses that are expanding.
• Supported: Tally is supported by a large community of users and developers. This means that there is a wealth of resources available to help businesses get the most out of the software.

If you are looking for a job in accounting or finance, learning Tally is a good investment. It is a skill that is in high demand. It can help you get a job and advance your career.

Now that you understand why these skills are important, keep reading to learn about basic interview questions.

Basic Tally Interview Questions and Answers

It’s time to start getting ready for your interview. This section has questions that are often asked at the start of Tally job interviews.

1) Explain the different versions of Tally. (Differences between Tally.ERP 9 and TallyPrime)

Tally has two main versions: Tally.ERP 9 and TallyPrime.

• Tally.ERP 9 is the older version. It’s a reliable and widely used accounting software. It has all the basic features that businesses need to manage their finances.
• TallyPrime is the newer version. It’s a more modern and user-friendly version of Tally.ERP 9. It has a new interface, improved features, and better performance.

Some of the key differences between Tally.ERP 9 and TallyPrime are:

• Interface: TallyPrime has a more modern and intuitive interface than Tally.ERP 9.
• Features: TallyPrime has some new features, such as e-invoicing and GST compliance, that are not available in Tally.ERP 9.
• Performance: TallyPrime is faster and more efficient than Tally.ERP 9.

2) Describe the basic accounting principles used in Tally. (Double-entry system, ledgers, journals)

Tally uses the double-entry system of accounting. This means that every transaction has two entries: a debit and a credit. The total debits must always equal the total credits.

Tally uses ledgers and journals to record transactions.

• Ledgers are used to track the balances of accounts. For example, there would be separate ledgers for cash, accounts receivable, and accounts payable.
• Journals are used to record the details of transactions. For example, a sales journal would record the date, amount, and customer of each sale.

3) What are the different types of vouchers in Tally? (Payment, receipt, contra, etc.)

Tally uses vouchers to record transactions. There are many different types of vouchers, but some of the most common are:

• Payment voucher: This voucher is used to record payments made to suppliers or other parties.
• Receipt voucher: This voucher is used to record payments received from customers or other parties.
• Contra voucher: This voucher is used to record transfers of money between different bank accounts.
• Journal voucher: This voucher is used to record transactions that do not fit into any other voucher type.

4) How do you create a company in Tally? (Step-by-step process)

To create a company in Tally, follow these steps:

• Open Tally and go to the “Gateway of Tally” screen.
• Click on the “Create Company” button.
• Enter the name of the company, the financial year, and the type of company.
• Select the country and the state.
• Click on the “Create” button.
• Once the company is created, you can start entering data and generating reports.

5) What is the difference between a group and a ledger in Tally?

In Tally, a group is a collection of ledgers. For example, there would be a group for all the asset accounts and another group for all the liability accounts.

A ledger is a record of all the transactions that have been made to a particular account. For example, the cash ledger would record all the deposits and withdrawals of cash.

Let’s move on to questions that are a little harder and help you stand out from the crowd.

Intermediate Tally Interview Questions and Answers

If you want to get a job that uses Tally more than just the basics, learn how to answer these questions.

1) Explain the process of creating and maintaining inventory in Tally.

In Tally, you can create and maintain inventory by following these steps:

• Create stock groups: Stock groups help you categorise your inventory items. You can create stock groups based on the type of product, brand, or any other criteria that you choose.
• Create stock items: Stock items are the individual products that you sell. When you create a stock item, you will need to enter information such as the item name, description, unit of measurement, and opening balance.
• Record inventory transactions: Inventory transactions include purchases, sales, and stock adjustments. When you record an inventory transaction, Tally will automatically update your inventory levels.
• Generate inventory reports: Tally can generate a variety of inventory reports, such as stock summaries, stock valuation, and age-wise analysis. These reports can help you track your inventory levels and make informed business decisions.

2) How do you generate financial statements in Tally? (Balance sheet, profit and loss, cash flow)

Tally can generate a variety of financial statements, including the balance sheet, profit and loss statement, and cash flow statement. To generate a financial statement, you will need to:

• Go to the “Gateway of Tally” screen.
• Click on the “Display” menu.
• Select the “Financial Statements” option.
• Choose the financial statement that you want to generate.
• Enter the date range for the financial statement.
• Click on the “Generate” button.

Tally will then generate the financial statement and display it on the screen. You can print the financial statement or save it to a file.

3) What are the different types of taxes that can be configured in Tally? (GST, TDS, TCS)

Tally can be configured to handle a variety of taxes, including GST, TDS, and TCS. To configure taxes in Tally, you will need to:

• Go to the “Gateway of Tally” screen.
• Click on the “F11: Features” button.
• Select the “Statutory & Taxation” option.
• Choose the tax that you want to configure.
• Enter the tax details, such as the tax rate and the tax type.
• Save the tax configuration.

Once you have configured taxes in Tally, you can use them to calculate taxes on your transactions.

4) How do you manage payroll in Tally? (Salary calculation, statutory deductions)

Tally can be used to manage payroll for your employees. To manage payroll in Tally, you will need to:

• Create employee masters: Employee masters contain information about your employees, such as their name, address, and bank account details.
• Define salary structures: Salary structures define the components of your employees’ salaries, such as basic pay, allowances, and deductions.
• Process payroll: When you process payroll, Tally will calculate your employees’ salaries and statutory deductions, such as income tax and provident fund.
• Generate payroll reports: Tally can generate a variety of payroll reports, such as salary slips, payroll summaries, and tax reports.

5) Explain the concept of a budget in Tally and how to create one.

A budget is a financial plan that outlines your expected income and expenses for a period of time. In Tally, you can create a budget to track your actual income and expenses against your budgeted amounts. To create a budget in Tally, you will need to:

• Go to the “Gateway of Tally” screen.
• Click on the “Budgeting” menu.
• Select the “Create Budget” option.
• Enter the budget details, such as the budget name, start date, and end date.
• Enter your budgeted income and expenses.
• Save the budget.

Once you have created a budget, you can use it to track your actual income and expenses. Tally will compare your actual amounts to your budgeted amounts and show you any variances.

6) What is the Tally Audit feature and how is it used?

The Tally Audit feature is a tool that can help you identify and correct errors in your accounting data. The Tally Audit feature can be used to:

• Verify the accuracy of your financial statements.
• Identify any discrepancies in your inventory records.
• Track changes to your accounting data.

To use the Tally Audit feature, you will need to:

• Go to the “Gateway of Tally” screen.
• Click on the “Audit” menu.
• Select the audit type that you want to perform.
• Enter the date range for the audit.
• Click on the “Start Audit” button.

Tally will then perform the audit and display the results on the screen.

Up next are the toughest questions, which are for jobs that need lots of experience with Tally.

Advanced Tally Interview Questions and Answers

These are questions that people with lots of Tally experience should know how to answer.

1) Discuss the security features in Tally. (Data encryption, user permissions)

Tally offers robust security features to protect your financial data.

• Data encryption: Tally encrypts your data to prevent unauthorised access. This means that even if someone gains access to your data files, they won’t be able to read them without the encryption key.
• User permissions: Tally allows you to set up user permissions to control who can access different parts of the software. This helps to prevent unauthorised users from making changes to your data.

2) How do you customise Tally to meet specific business requirements? (Using TDL)

Tally Definition Language (TDL) is a powerful tool that allows you to customise Tally to meet your specific business needs. You can use TDL to create custom reports, invoices, and other documents. You can also use TDL to add new features to Tally or to modify existing ones.

3) Explain the process of data migration in Tally. (Importing/exporting data)

Tally makes it easy to migrate data from other accounting software or from spreadsheets. You can import data into Tally in a variety of formats, including Excel, CSV, and XML. You can also export data from Tally in these formats.

4) How do you troubleshoot common errors in Tally?

Tally is a complex software, and it’s not uncommon to encounter errors from time to time. However, most errors can be easily resolved by following a few simple steps.

• Check the error message: The error message will often give you a clue as to what’s causing the problem.
• Consult the Tally help file: The Tally help file contains a wealth of information on troubleshooting errors.
• Contact Tally support: If you’re unable to resolve the error on your own, you can contact Tally support for assistance.

5) Describe the steps involved in closing a financial year in Tally.

Closing a financial year in Tally is a simple process.

• Go to the “Gateway of Tally” screen.
• Select “F11: Features.”
• Select “F2: Accounting Features.”
• Set “Close a Financial Year” to “Yes.”
• Enter the date of the last day of the financial year.
• Click on “Accept.”

6) What are the best practices for data backup and recovery in Tally?

It’s important to back up your Tally data regularly to prevent data loss. You can back up your data to a variety of locations, including a local drive, an external drive, or a cloud storage service.

If you lose your Tally data, you can restore it from a backup. The process of restoring data is simple and straightforward.

Next are example questions you might get asked about how you would use Tally in different situations.

Scenario-Based Tally Interview Questions (with Sample Answers)

These questions will test how you would use Tally on the job. Get ready to think fast and use what you know.

Scenario 1: A customer returns goods. How would you handle this in Tally?

Answer:

I’d use a “Sales Return” voucher in Tally. Here’s the process:

• Go to Gateway of Tally > Accounting Vouchers > Sales Return (or press Ctrl+F8).
• Enter the return date and select the customer’s name.
• Choose the items returned, the quantity, and the rate. (Tally will automatically calculate the amount.)
• Select the applicable tax rates. (If needed.)
• Save the voucher. This will update the customer’s account and stock levels.

Additional Considerations:

If the customer was given a credit note for the return, this would be recorded in a separate voucher.

Any transportation charges or other fees related to the return would be included as necessary.

Scenario 2: You need to reconcile bank statements with Tally data. Explain the steps.

Answer:

Bank reconciliation ensures that your company’s records match the bank’s records. Here’s the process in Tally:

• Import your bank statement: Tally allows for this, usually in a CSV format.
• Go to Banking > Bank Reconciliation.
• Select the bank account and statement date.
• Match transactions: Tally will try to automatically match entries. Manually match any that it misses.
• Identify discrepancies: Look for unmatched transactions or differences in amounts. These could be due to timing differences, errors, or missing entries.
• Investigate and correct: Determine the cause of each discrepancy and make any necessary adjustments in Tally.
• Complete the reconciliation: Once all items are matched or explained, mark the reconciliation as complete.

Scenario 3: There’s a discrepancy in the trial balance. How would you investigate?

Answer:

A trial balance discrepancy means the total debits don’t equal the total credits. Here’s how to investigate:

Check for simple errors:

Typos: Review all entries for incorrect amounts or accounts.

Reversal of entries: Ensure debits and credits are on the correct sides.

Missing entries: Look for transactions that may not have been recorded.

Check specific areas:

Opening balances: Verify that they were entered correctly at the start of the period.

Suspense account: See if any transactions were incorrectly posted here.

Contra entries: Ensure these have been entered on both sides (e.g., cash/bank transfers).

Check for more complex issues:

Rounding errors: These can occur if amounts are rounded too early in calculations.

Multiple currency transactions: Verify that exchange rates were applied correctly.

System errors: In rare cases, there could be a problem with the Tally software itself.

Important Note: If the discrepancy is significant or difficult to resolve, it may be necessary to seek help from an accountant or Tally expert.

Next, you’ll get some tips to help you do your best during your interview.

Tips for Acing Your Tally Interview

With the right plan, you can make the best possible impression. Read on for some tips to help you succeed.

1) Brush Up on Accounting Basics:

• Go over the basics. Accounting is like the ABCs for Tally. Make sure you know about debits, credits, ledgers, and financial statements.
• Double-check your knowledge. If you need a refresher, look at your old textbooks or find online resources.
• Understand how they connect. See how these basic ideas fit into Tally’s way of doing things.

2) Practise with Tally:

• Get a free trial. Most Tally versions have a demo you can use. This is your playground to learn.
• Play around. Click on everything, make fake transactions, and try out different reports.
• Do it like it’s real. Imagine you’re at work and need to do daily tasks. This will help you get comfortable.

3) Research the Company:

• Learn about their business. What do they sell or do? Are they big or small? Knowing this helps you understand their needs.
• Check their website. Read about their values and goals. This gives you talking points.
• See if they’ve been in the news. This can tell you if they’re doing well or facing challenges.

4) Prepare Questions to Ask:

• Show you’ve done your homework. Ask about specific things related to their business and how Tally helps.
• Think about your role. Ask about the daily tasks and who you’d work with.
• Use iScalePro. This tool can help you practise your questions and how you’ll answer theirs.

5) Be Confident and Enthusiastic:

• Sit up straight, smile, and make eye contact. This shows you’re interested.
• Talk clearly and slowly. Don’t rush. Let them hear how excited you are about Tally.
• Be positive. Even if you don’t know the answer, say you’re eager to learn.

Conclusion

Mastering Tally opens doors to exciting accounting jobs. This guide has provided you with common interview questions and answers. 

Now, it’s time to practise and show employers your skills. Use iScalePro to sharpen your knowledge. With iScalePro, you can get practice with Tally’s questions and build confidence. 

Prepare well, answer questions clearly, and get ready to impress interviewers. Your dream job in accounting awaits!

Tally Interview FAQs

1) How to Explain About Tally in an Interview?

When explaining Tally in an interview, focus on its key features and benefits. Mention that Tally is a comprehensive accounting software used by businesses of all sizes. Highlight its ability to handle various accounting tasks, such as:

• Inventory management: Tracking stock levels, purchase orders, and sales.
• Invoicing and billing: Creating and sending invoices, tracking payments.
• Payroll processing: Calculating salaries, deductions, and statutory payments.
• Financial reporting: Generating financial statements like profit and loss accounts and balance sheets.

Emphasize Tally’s ease of use and its ability to adapt to different business requirements.

2) What are the Questions Asked in Tally?

Here are some common questions you might encounter in a Tally interview:

• Basic operations: How do you create a company in Tally? Explain the process of recording journal entries and creating invoices.
• Inventory management: How do you track stock levels and manage purchase orders in Tally?
• Payroll processing: Explain the steps involved in calculating salaries and generating payslips in Tally.
• Financial reporting: How do you generate financial statements like profit and loss accounts and balance sheets in Tally?
• Tally ERP 9: What are the new features introduced in Tally ERP 9? How does it differ from previous versions?

3) What are the Basics of Tally?

Here are some essential concepts to understand about Tally:

• Company: A Tally company represents a business entity. Each company has its own set of accounts, ledgers, and vouchers.
• Voucher: A voucher is a document used to record financial transactions. Tally offers various voucher types, such as journal vouchers, cash vouchers, and bank vouchers.
• Ledger: A ledger is a collection of accounts related to a specific category, such as sales, purchases, or cash.
• Account: An account is the basic unit of accounting in Tally. It represents a specific financial item, such as cash, bank accounts, or inventory.

4) What is Tally in Short Answer?

Tally is a popular accounting software that helps businesses manage their finances efficiently. It offers features for inventory management, invoicing, payroll processing, and financial reporting.