Entry in tally - Owners Capital & Profit

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This discussion addresses how to record payments of owner's capital and company profit in Tally Prime. A key question is how to handle the Profit & Loss account ledger, which is a balance sheet item, when distributing profits. The recommended journal entry for paying profit to the owner is to debit the Profit and Loss account and credit the Bank account.

Clement Fernandes

Clement Fernandes (Querist)
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18 July 2022 Dear Respected members,

At the moment we paid the owner his portion of the capital amount through cheque and also paid a portion of the company profit through cheque.

Could you please tell us the entry in the tally prime as I am not able to find the ledger of the P& L account?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 July 2022 The ledger is of balance sheet.
See capital account and accumulated profit.

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Clement Fernandes

Clement Fernandes (Querist)
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04 September 2022 Our company just started in the financial year 2021, and this year we paid a portion of the profit to the owner.
could you please tell me the journal entry in the tally? which ledger is to be credited?
weather I need to transfer all profit to retained earnings first?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 September 2022 No, only transfer retained earnings after payment of profit to the owner.

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Clement Fernandes

Clement Fernandes (Querist)
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05 September 2022 Dear Sir,

Could you please tell me the tally entry for payment of profit to the owner

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 September 2022 Profit and loss account Dr
To bank account Cr.

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