Manager - Finance and Accounts
58714 Points
Joined June 2010
Step 1: Create Profit & Loss Appropriation Account
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Go to Gateway of Tally > Accounts Info > Ledgers > Create
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Name the ledger as Profit & Loss Appropriation Account
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Under Group, select Reserves and Surplus
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Keep other details default and save
Step 2: Record Transfer of Profit to P&L Appropriation Account
At the end of the year, after you have the Net Profit, you transfer it to the P&L Appropriation Account.
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Go to Gateway of Tally > Accounting Vouchers > Journal Voucher (F7)
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Debit Profit & Loss Account (with net profit amount)
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Credit Profit & Loss Appropriation Account
Step 3: Record Appropriations (like dividends, reserves, etc.)
Now, from the Profit & Loss Appropriation Account, you debit various appropriations such as:
Example entries:
Step 4: View the P&L Appropriation Account report
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Go to Gateway of Tally > Display > Account Books > Ledger
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Select Profit & Loss Appropriation Account
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You will see all the transfers and appropriations
Optional: Automate Transfers Using Tally Features
You can also set up automatic transfer of net profit in Tally Prime through:
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Profit & Loss account settings
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Under Accounting Features, enable Use Profit & Loss Appropriation Account