Tally ERP 9 Entries for Cash Credit

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Lucifer Rodriguez (Querist)
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26 May 2024 1) Cash Credit Account renewal charges comes under which head ?
2) Bank Stock Audit Charges comes under which head ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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11 July 2024 In accounting, the classification of expenses typically depends on the nature of the expense and how it impacts the financial statements. Here’s how you can classify the expenses mentioned:

### 1. Cash Credit Account Renewal Charges

Cash Credit Account renewal charges generally relate to the ongoing maintenance or renewal of a credit facility provided by a bank. These charges are typically considered as follows:

- **For the Company (Borrower):**
- **Operating Expenses or Bank Charges**: These charges are usually treated as operating expenses since they are directly related to maintaining the credit facility necessary for the company’s operations.
- In Tally ERP 9, you can classify these charges under the "Bank Charges" ledger, which is usually categorized under "Indirect Expenses" or "Bank Charges".

### 2. Bank Stock Audit Charges

Bank stock audit charges refer to the fees paid to auditors appointed by banks to conduct physical verification and audit of the stocks or inventory financed by the bank. This expense can be categorized as follows:

- **For the Company (Borrower):**
- **Audit Fees**: These charges are classified under audit fees, which are part of professional fees or audit expenses.
- In Tally ERP 9, you can create a ledger specifically for "Audit Fees" or "Professional Fees" and categorize it under "Indirect Expenses".

### Steps to Record in Tally ERP 9

#### Creating Ledgers:
- **Bank Charges Ledger:**
1. Go to **Gateway of Tally > Accounts Info > Ledgers > Create**.
2. Enter the name as "Bank Charges" under "Name of Ledger".
3. Select "Indirect Expenses" as the group under "Under".
4. Save the ledger.

- **Audit Fees Ledger:**
1. Go to **Gateway of Tally > Accounts Info > Ledgers > Create**.
2. Enter the name as "Audit Fees" under "Name of Ledger".
3. Select "Indirect Expenses" as the group under "Under".
4. Save the ledger.

#### Recording Transactions:
- **Cash Credit Account Renewal Charges:**
1. Go to **Gateway of Tally > Accounting Vouchers > F7: Journal**.
2. Debit the relevant expenses ledger (e.g., Bank Charges) and credit the bank account or cash account accordingly.

- **Bank Stock Audit Charges:**
1. Go to **Gateway of Tally > Accounting Vouchers > F7: Journal**.
2. Debit the relevant expenses ledger (e.g., Audit Fees) and credit the bank account or cash account accordingly.

### Conclusion

By categorizing these expenses correctly in Tally ERP 9, you ensure accurate financial reporting and compliance with accounting standards. Always consult with your accountant or tax advisor to ensure proper classification and treatment of expenses based on specific circumstances and regulations applicable to your business.

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