LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Tally as a fixed asset

Mohammed Shahid Rahman (Partner) (143 Points)

18 April 2016

Last year I purchased Tally Accounting software on 30th March 2015 from eZone. My accountant registered eZOne as Sundry Creditor and and as the payment was outstanding, it was carry forward to 15-16 as outstanding. A cheque was issued against eZone on 1st April 2015.

I would like to know how can I change this entry to Fixed Asset. An example would be very helpful as I accountancy is not my background and I do not have any accountant who can help.

Regards

Reply
Follow
Share

7 Replies

Deepanshu (Accountant) (81 Points)
Replied 18 April 2016

hire a good accountant who has read balance sheet smartly.

1 Like

Ruchi (CA) (1410 Points)
Replied 19 April 2016

What was exactly the entry passed by your then accountant on 30th March 2015? I want to know that when he credited ezone account, which account he credited?

Mohammed Shahid Rahman (Partner) (143 Points)
Replied 20 April 2016

Hi Ruchi,

Thanks for the reply.

On 30th March 15

Dr Computer Maintenance

Cr eZone - bill no. ez/xx/14-15

Please note eZone is under Sundry Creditors Computer Maintenance is under Indirect Expenses

Ruchi (CA) (1410 Points)
Replied 20 April 2016

Your accountant has considered the purchase of tally software as an expense for the year rather than considering it as a fixed asset. If it was considered as fixed asset then you could have claimed proportional depreciation on it. But by treating it as expense the entire amount has been claimed in a single year. Your ezone account would not be showing any balance in the current year after you have made payment to them. And computer maintenance account would also have been automatically transferred to P&L a/c.

Now since a year has passed, previous years' books are closed and your income tax return is also filed considering the same in the nature of an expense, I would rather advice you against changing the nature of transaction from expense to fixed asset as it would mean revising the income tax return already filed and making changes to books of accounts already closed. So let the entry be.

Bhavesh Koladiya (Software Analyst) (2 Points)
Replied 24 October 2016

Many of the Tally users wish to use Fixed Asset and Expense ledgers in Purchase related Vouchers. But the list of Ledgers will show only Purchase ledgers. There is a simple and quick solution.
In Purchase voucher screen, press F12 ->Set Allow Expenses/Fixed Assets for Accounting Allocations option to YES. You will see all the Fixed Assets and Expense Ledgers appear in the list.