Difference in Opening Balances in Tally - Easily Remove with Simple Steps

Summary

The video script discusses the common issue of discrepancies in the opening balance of a balance sheet. The researcher explains that these differences arise from an imbalance in the sheet, often due to incorrect entries in the opening balance sheet. The video provides a step-by-step guide on how to identify and correct these errors, emphasizing the importance of accurate accounting practices. It also touches on the basics of accounting, such as ensuring that the asset and liability sides of the balance sheet always match, and offers advice on handling opening stock in tallying systems.

Takeaways

• 📜 The video discusses the concept of opening balance and differences that may arise in the balance sheet, which can be confusing for those not familiar with accounting.
• 🔍 To understand the differences in the balance sheet, one must examine the opening balance and the entries made therein, as discrepancies often stem from incorrect entries.
• 🧐 The difference in the balance sheet usually indicates an imbalance, either on the liability side or the asset side, suggesting that not all balances were entered correctly.
• 📊 The opening balance sheet can be viewed in accounting software like Tally by selecting the period at the start of the financial year, which shows the balance for just that day.
• 🤔 A common mistake is entering incorrect opening balances for accounts, which leads to differences in the balance sheet. It's important to verify each ledger account to ensure accuracy.
• 💻 The video provides an example of altering the opening balance of a capital account and how it affects the overall balance, illustrating how changes in ledgers can create differences.
• 📝 It is emphasized that the balance sheet must always balance, with the total of the debit (asset) side matching the credit (liability) side for the financial records to be considered accurate.
• 🛠️ To resolve differences in the balance sheet, one should review and correct the entries in each account, ensuring that they reflect the true financial position.
• 📈 The video also addresses the common error of entering closing stock in Tally when only opening stock should be entered for the balance sheet to be correctly calculated.
• 🎓 Understanding basic accounting principles is fundamental to using accounting software effectively, as the software is merely a digital format for accounting practices.
• 👍 The video encourages viewers to subscribe to the Tally School channel for more educational content and offers to answer any questions or suggestions posted in the comments section.

Q & A

What is the main topic discussed in the video?

The main topic discussed in the video is the opening balance and the differences that may arise in the balance sheet, and how to address these differences.

Why do people often have differences in their balance sheets?

People often have differences in their balance sheets because there may be an imbalance, or the balance sheet has not been entered correctly, leading to discrepancies on either the liability or asset side.

How can one view the opening balance sheet in Tally?

To view the opening balance sheet in Tally, you need to go to 'Period' and select the first day of the financial year, which will show the balance sheet for that exact day, representing the opening balances.

What is a common mistake people make while entering the opening balance in Tally?

A common mistake people make is entering the closing stock instead of the opening stock. In Tally, only the opening stock needs to be entered, as the software automatically calculates the closing stock from the remaining unsold items.

What should the balance sheet always reflect?

The balance sheet should always reflect a balance, with the total of the liability side (credit) matching the total of the asset side (debit). If there is a difference, it indicates an error in the entries.

How can one correct the differences in the opening balances?

To correct differences in the opening balances, one should go through each ledger account, check the amounts, and alter them if necessary to match the intended values. This involves identifying any incorrectly entered amounts and making the appropriate corrections.

What is the importance of understanding basic accounting concepts when using Tally?

Understanding basic accounting concepts is crucial when using Tally because it is essentially accounting in a digital format. Knowing these concepts helps in correctly entering data and avoiding discrepancies in the balance sheet.

How does the speaker demonstrate the creation of a balanced sheet?

The speaker demonstrates the creation of a balanced sheet by explaining that for every investment made (e.g., cash or fixed assets like computers), the capital account (liability side) should be increased accordingly, and the asset side should reflect the corresponding assets.

What should one do if they still encounter differences in the balance sheet after correcting the ledgers?

If differences still persist after correcting the ledgers, one should thoroughly check if all capital accounts have been entered correctly, as遗漏资本账户 is a common cause of such discrepancies.

What is the speaker's advice for viewers who want to learn Tally effectively?

The speaker advises viewers to have a good understanding of basic accounting principles, as this knowledge will greatly facilitate the learning process of Tally, which is essentially a digital format of accounting.

How does the speaker engage with the audience for feedback and suggestions?

The speaker encourages the audience to subscribe to the Tally School channel, ask questions, make suggestions, and even express gratitude in the comments section, promising to respond to each and every one of them.

Outlines

00:00

📋 Understanding Opening Balance Differences in Balance Sheets

This paragraph discusses the common issue of differences in opening balances on balance sheets. The speaker, a researcher from Terry School, explains that these differences arise due to imbalances or incorrect entries in the balance sheet. They clarify that while those familiar with accounting might understand the concept, newcomers may find it challenging. The speaker uses their own balance sheet as an example, showing how it is correctly entered and balanced, and then demonstrates how altering the opening balance of a capital account can create a difference. They emphasize the importance of correctly entering each ledger to ensure the balance sheet remains balanced, with the liability and asset sides matching.

05:01

📊 Balancing Act: Ensuring Accurate Ledger Entries

In this paragraph, the speaker delves deeper into the mechanics of balancing a balance sheet. They explain that the debit (asset side) and credit (liability side) must always match for the balance sheet to be accurate. The speaker provides a simple scenario where the capital account and a fixed asset, like a computer, must have the same balances to achieve balance. They also discuss common mistakes, such as incorrectly entering closing stock in tally, and advise on the correct procedures for handling stock and capital accounts. The speaker suggests that differences in balance sheets often stem from oversights in entering capital accounts or other ledgers. They encourage viewers to check each account thoroughly to identify and correct any discrepancies.

10:02

🎓 Learning Tally and Basic Accounting Principles

The speaker concludes the video by emphasizing the importance of understanding basic accounting principles to effectively learn and use Tally. They suggest that a strong foundation in accounting makes learning Tally much easier, as Tally is essentially accounting in a digital format. The speaker invites viewers to subscribe to the Terry School channel for more content and encourages them to ask questions or provide feedback in the comments section. They express gratitude for the viewers' engagement and promise to respond to all comments, whether they are suggestions, questions, or expressions of thanks.

Keywords

💡Opening Balance

The opening balance refers to the initial amount or value of an account at the start of a financial period. It serves as a benchmark for the financial transactions that follow. In the video, the importance of correctly entering the opening balance is emphasized to avoid discrepancies in the balance sheet. An incorrect opening balance can lead to differences that need to be reconciled.

💡Balance Sheet

A balance sheet is a financial statement that presents a snapshot of a company's financial situation at a specific point in time. It lists the company's assets, liabilities, and equity, with the fundamental accounting principle that the total value of assets must equal the combined value of liabilities and equity. The video focuses on the importance of balancing the two sides of the balance sheet to avoid any differences that might indicate errors in accounting entries.

💡Differences in Balance Sheet

Differences in the balance sheet refer to the discrepancies that occur when the total values of the asset side and the liability side do not match. These differences indicate that there may have been errors in the entry of opening balances or other accounting transactions. The video provides guidance on how to identify and correct these differences to ensure the accuracy of financial records.

💡Accounting

Accounting is the process of recording, summarizing, and analyzing financial transactions. It provides the necessary information for stakeholders to make informed decisions. The video emphasizes the importance of understanding basic accounting concepts to effectively use accounting software like Tally and to accurately manage and interpret financial data.

💡Ledger

A ledger in accounting is a book or file that records all financial transactions. Each account, such as assets, liabilities, income, and expenses, has its own ledger. The video highlights the need to check each ledger account to ensure that the balances are correctly entered and that they match the intended values to maintain an accurate balance sheet.

💡Stock Items

Stock items refer to the goods or products that a business holds for sale or for use in the production of goods for sale. In the context of accounting software like Tally, creating stock items allows for the tracking and management of inventory. The video provides advice on how to handle stock items in Tally, emphasizing that only opening stock should be entered for the balance sheet to function correctly.

💡Tally

Tally is accounting software that helps businesses manage their financial records, including the creation of balance sheets, income statements, and other financial reports. The video uses Tally as an example to demonstrate how to correctly enter opening balances and how to identify and correct differences in the balance sheet.

💡Capital Account

The capital account in accounting represents the owner's equity in a business. It reflects the initial investment made by the owner and any additional funds contributed. The video emphasizes the importance of correctly entering the capital account's opening balance to avoid differences in the balance sheet.

💡Correcting Entries

Correcting entries in accounting involve making changes to previously recorded transactions to rectify errors and ensure the accuracy of financial records. The video provides a step-by-step guide on how to correct ledger entries in Tally to eliminate differences in the balance sheet.

💡Financial Year

A financial year, also known as a fiscal year, is the period used by businesses for accounting purposes. It is typically a 12-month period, and the video refers to the opening balance sheet for a new financial year. The correct opening balance is crucial for the financial year's accurate financial reporting.

💡Asset Side

The asset side of a balance sheet lists all the resources a company owns or controls, which can be used to generate income or meet financial obligations. The video emphasizes the need for the asset side to balance with the liability side, ensuring that the total value of assets equals the combined value of liabilities and equity.

Highlights

The video discusses the concept of opening balance and differences that may arise in the balance sheet.

Many people face issues with differences in their balance sheets and seek advice on how to resolve them.

The difference in the balance sheet usually indicates an imbalance, either on the liability side or the asset side.

The presenter shares their own experience of confusion when they began learning accounting and using tally.

The video provides a practical demonstration of how to check and correct the opening balance sheet in tally.

Altering the opening balance of an account, such as the capital account, can create a difference in the balance sheet.

The presenter illustrates how changing the opening balance of a ledger account affects the overall balance sheet.

It is important to ensure that the balances entered in tally are correct to avoid discrepancies in the balance sheet.

The video emphasizes the importance of the balance sheet always balancing, with the liability and asset sides matching.

Common mistakes include entering the wrong amount in a ledger or not entering the capital account correctly.

The presenter explains that closing stock does not need to be entered in tally when creating a balance sheet; only opening stock is required.

The video provides advice on how to correct the accounts and remove differences from the balance sheet.

The presenter shares a basic accounting scenario where the capital account and a fixed asset must balance each other out.

The video concludes by emphasizing that understanding basic accounting concepts is crucial for using tally effectively.

The presenter invites viewers to subscribe to their channel and engage with the content through comments and suggestions.

Transcripts

[Music]

hi guys i am researcher from terry

school and in this video we are going to

talk about the opening balance

difference that you get in the balance

sheet so many of the people get

differences in their balance sheet and

many of the people have asked me that

how to remove that large amount of

difference I have told them that that is

the difference in the balance sheet so

check your balance sheet the opening

balance sheet and you will find the

difference but this statement is a

little bit advanced this statement can

be understood by the people who know

accounting or who are into accounting

field but for the people who are new to

accounting or who have not enough

experience of accounting they cannot

understand so that's why I have created

this video nothing wrong in that

I was also in confusion at the beginning

when I started learning tally 5 years

ago

so why the balance remains or why there

is a difference in the opening balance

in balance sheet so let me show you my

balance sheet right now I am locked into

my company tally school and I'm going to

I'm going into the balance sheet you can

see there is no difference that's

because I have entered the balance sheet

in a correct way and then I am using the

balance in the correct way so why there

is no difference and why the difference

arises the difference basically arises

when there it is imbalance in the

balance sheet or we can call that you

have not entered the balance sheet

correctly so let me just open the

opening balance sheet this is actually

the opening balance sheet you can see as

at first April two thousand ninety if

you want to see the opening balance

sheet in your tally then you have to go

to period and then select one for 2019

and again select one for 2019 so what

tally will do is show you the balance

sheet for the period from 1 4 9

- 1 419 that exactly one day and that's

the opening day of the new financial

year so that is the opening balance

sheet when I enter that I will see the

opening balance sheet it is exactly the

same as we saw before because it was

already the opening balance sheet and

now the difference comes because there

is an imbalance in the balance sheet

either on the liability side or on the

asset side so either on this side or on

this side you have not entered a correct

balance while entering the opening

balance sheet so let me just show you

how the difference arises what I will do

is I will change the opening balance of

my capital account so if I go into

capital account I have tally school

capital account created and the capital

account by the name of my company which

is exactly the tally school.com name

also

so tally school if I go in there you can

see opening balances 5 lakh credit what

I will do is I will change the opening

balance to 2 lakh and then there will be

the difference so let me go back and if

I press ctrl the center from here I will

go into ledger alteration in Delhi for

Perry school ledger alteration if I come

here okay if I come here I will see

filer opening balance I will do it two

lakhs and they will see the difference

so now I have changed the opening

balance of capital to two lakh rupees

and you can see the difference in

opening balances 3 lakhs so that is how

the difference comes this is just one

example if you change opening balance of

any of the Ledger's that you get that

you see here or that you see in your

tally in the balance sheet

say for example computer if I go in

there opening balance is eight thousand

so let me go in there and change the

opening balance of computer

okay let me put in here 10,000 extra in

opening balance and then change now you

can see 10,000 extra difference is

coming up in the opening balances so

what happens is when there is a

difference in the opening balance when

you see something like this you have not

entered the entire balance sheet

correctly in tally what I will recommend

is you check each and every ledger or

you check each and every account here

and see the balance is exactly what you

want the final thing in accounting is

that the balance sheet always balances

that is this balance sheet the liability

side and the asset side both should be

same otherwise there will be a

difference as we saw so for example if

you just have a capital account and you

just have a fixed asset on this side

let's say we have capital account on the

left hand side just a little and right

hand side we just have computer so both

the capital account of tally school and

computer should have same balances so if

I bought a computer of twenty thousand

the capital accounts should be twenty

thousand also that's when the balance

sheet balances we cannot see that here

because there are so many accounts here

but that is the basic sin scenario or

that is a basic knowledge while creating

a balance sheet the debit that is the

asset side and the liability side that

is the credit should always match and

should always balance equally that is

why the name is also called the balance

sheet so how to remove that differences

it's very easy check each and every

account that is reflected here and check

the amount and you will find that you

have by mistake entered some other

amount in some other account or entered

wrong amount in any of the ledger the

most common mistake people do is enter

closing stock you do not have to enter

closing stock in tally while creating

balance sheet in tally you just have to

enter the opening stock and that will be

counted as losing stock because whatever

you are not whatever you have not sold

till the date is automatically becomes

the closing stock so while you enter the

closing stock in tally for the first

time you do not have to enter the

closing stock actually if you want to

maintain the stock create stock items

and then add opening balances in them I

will link down in the description the

process of creating stock items in tally

with GST and if you just want to enter

the stock without maintaining

maintaining it then create a ledger for

opening stock and then enter it in tally

it will be under current assets so

that's where the difference arises for

most of the people but if still there is

a difference then chances are you may

not have entered a capital account

because what we do is we enter the cash

that is the amount that we introduce in

a business or bank account but we forgot

or we forget to enter the capital

account and that's where the difference

arises so these can be the reasons the

difference in your balance sheets

opening balance arises there can be

other reasons as well and we have to

check each and every individual balance

sheet to know where the differences I

have explained the reasons where

generally most of the people would do

the mistake because I have gone through

them so I know so how it works so what

you have to do to remove the balances

you have to just correct the accounts by

altering them so what I will do is I

will alter this ledger and this ledger

that we have changed so I will go into

tally school ctrl + Enter

I will come to opening balance and

identify lakhs

we have changed it now the opening

balance difference is only ten thousand

so we have covered the difference of

three lakhs and now we will change the

ledger of computer control plus enter

and if I come here I will just delete it

because there was nothing here so I will

keep it zero and press ENTER now the

difference is gone so now the balance

sheet is valid now the left hand side

liability side and the right hand side

asset side is valid it doesn't matter

what the total amount is it will tell

you if you have entered all the Ledger's

in a correct way if you want to just

start by balancing the baron see you can

start ledger by ledger so in business or

whatever you do it comes from your

capital so on the left hand side what

you do is get a P paper and a pen or a

notebook and on the left hand side of

the page write capital on the right hand

side write your fixed assets or your

investments or whatever you have

introduced in the business or from that

money so for example if you are starting

a computer business on the left hand

side let's say you invested fifty

thousand so fifty thousand will be in

the capital and the right hand side it

can be computer it can be cash you are

not purchased computer here so on the

right hand side right for example let's

say you have introduced cash you have

just started the business so on the left

hand side it will be capital on the

right hand side it will be cash now you

have bought 20,000 rupees computer from

that cash so cash will get reduced and

computer will get increased so on the

right hand side although you got the

computer but the total fifty thousand

will remain as it is so that's how the

balance sheet actually works and that's

how tele also work with the balance

sheet so we have to know that so this is

just a basic accounting problem that

many of the people have this is not

something related to tally in any way

except that you have entered the ledgers

wrongly otherwise it's just basic

accounting concept that you have to know

if you want to learn an evil I say this

to many people that I meet that to learn

tele well no basic accounting if you

know advanced accounting that's very

good but if you know basic accounting

you can learn value in a much more easy

way because fairly for accounting it is

nothing but accounting in a digital

format so that's for this video if you

like this video subscribe to Kali school

channel we are going we are growing at a

very phenomenal pace we are adding many

many subscribers daily so that's a good

point

and if you have any suggestion any

question comment down below and the I

reply to each and every suggestion or

question if you want to say thanks then

also comment down below I will reply to

that as well by giving a heart so thank

you for watching this video and I will

see you in the next video

[Music]

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