UNIT - I

INTRODUCTION TO COMPUTERS
Computers are truly amazing machine. Today the computers play a major role in the modern society
and its development, with its inherent qualities. It has also become a vital component of all successful
business.
The origin of the word computer is taken from the Latin meaning ‘to reckon’ or ‘to compute’.
Computer is an electronic device which converts raw data into meaningful information. That is the computer
is a machine that accepts the data as its input, processes it and produces the desired results as output. Thus
computer can be defined as an electronic device with the ability to
 Accept user-supplied data and instructions
 Store data and instructions
 Perform arithmetic and logical operations and
 Output the results according to user specifications.

WHAT IS COMPUTER? OR DEFINE COMPUTER OR WRITE SHORT NOTES ON

COMPUTER.
Meaning
A computer may be defined as a machine that can solve problems by accepting data, performing
certain operations and presenting the results of those operations under the direction of detailed step by step
instructions.
Such a set of sequenced instructions which cause a computer to perform particular operations is
called a program.
A computer is a programmable machine and a computing device, which responds to a specific set of
instructions in a well defined manner and executes a prerecorded list of instructions called a program.

Definitions
According to the Oxford Dictionary, a computer is “an electronic machine for making calculations,
storing and analyzing information fed into it”.
International standard organisation (ISO) has defined a computer to be “a data processor that can
perform substantial computations, including numerous arithmetic and logic operations, without intervention
by a human operator during the run”.
An American institute has defined a computer as, “a device capable of solving problems, by
accepting data, performing described operations on the data, and supplying the results of these operations.

WHAT ARE THE FEATURES OF COMPUTER? OR EXPLAIN THE CHARACTERISTICS OF

COMPUTER.
The following are some of the features or characteristics of a computer.
1. High speed
Since all the operations of the computer are caused by electrical pulses, the computers can perform
large number of operations in just one second. The processing speed of a computer is generally measured in
nano seconds. (1 Nano second = 1 billionth of a second = 1/10).
2. Accuracy
The accuracy of the computers is consistently very high. Computers do not make mistakes. Errors in
computing are generally due to negligence, such as inaccurate data, improper procedures, poor designs. The
computers follow the simple rule if GIGO.
3. Automation
The special feature of a computer is automation. That is, the computer executes a program
continuously without any human intervention until completion. The central processing unit of the computer
makes it possible.
4. Storage Capacity
The computers can store large amount of data and information, which is expressed in terms of
kilobytes of memory. Moreover the storage capacity of the computers can be increased by using secondary
storage devices such as magnetic disk etc.

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5. Diligence
Computers being machines do not suffer from fatigue and lack of concentration. It can work for
hours together and can perform limitless calculations. Once the program is stored in the main memory and
instructions are then transferred one by one to control unit for execution in the same accuracy an speed of
the first computation.
6. Scientific approach
A computer adopts a scientific approach in processing information. There is no question of
emotional or subjective evaluation.
7. Use of binary system
Computers use internally a number system called binary number system. This system makes
computers work with binary numbers in place of decimal numbers. The binary number system uses the two
digits 0 and 1.
8. Logical decisions
Computers have the capability to take decisions which are based on certain conditions. These
conditions are called logical decisions. Logical decisions mean choosing a proper path out of various
alternatives available.

EXPLAIN THE IMPORTANCE OF COMPUTERS

The modern computers possess the following abilities
ж Computers provide new working dimensions for the working day and for the human concept
ж They provide effective and efficient controls over human error.
ж They provide large capacity to store information, and the capability to rapidly access this
information
ж They can perform complex and repetitive calculations rapidly and accurately
ж They can make decisions on the basis of given conditions.
ж Performing new and additional tasks- a computer can calculate or summarise quantitative
information more effectively than any other human clerk because it is not subject to dullness
ж Self checking- a computer verifies the accuracy of its work by means of parity check. It counts the
number of characters it has in storage to make sure that there is no loss of data during processing.
ж They can correct and modify certain parameters automatically.
ж They can provide meaningful information to the user and are able to draw and print graphs.

WHAT ARE THE ADVANTAGES AND LIMITATIONS OF COMPUTERS? OR EXPLAIN THE

MERITS AND DEMERITS OF COMPUTERS
Advantages of Computers
 Performance of complex and repetitive calculations quickly and accurately
 Large storage information
 Easy access to various information
 Efficient and effective control on human mistakes, omissions, errors and commission.
 Quick performance of various human activities
 Summarizing quantitative information efficiently
 Performance of additional tasks, wherever necessary
 Accuracy in work and self-checking concepts
 Corrections carried out automatically in certain cases
 Error detection mechanism
 Printouts, diagrams and graph preparation
 Easy communications
 Alternate path creation or alternatives
 Decision support system
 Knowledge based system
 Artificial intelligence
Limitations
 Computer is only tool and not the mind
 It has no commonsense or natural intelligence
 It has no emotions or feelings

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  Use of computers depends on the pattern of use by able users
 Failure to derive meaning from objects

TRACE OUT THE HISTORY OF COMPUTERS OR EXPLAIN THE HISTORY OF COMPUTERS

The history of computers dates back to long ago, when man used his fingers for counting. The Stone
age man used stones for counting. Later the stones were replaced by sticks, marks on the earth, scratches and
symbols on the stone, knots on the ropes. He found it very difficult to use these computing aids, because
they require some physical effort from him and the computing speed is very slow. This necessitated
developing a new technique and as a result various numbers of systems were discovered.
 3000 BC ----- Abacus - counting frame
 1642 AD ----- First Mechanical calculator pascaline-designed for additions and subtractions by
French scientist Blaise Pascal
 1822 Difference Engine was invented with mechanical memory storage by Cambridge University
Professor of Mathematics, Charles Babbage. He is known as ‘Father of computers’.
 ABC --- Atanas off-Berry Computer was designed, using vaccum tubes to perform arithmetic logic
functions and to solve simultaneous equations.
 1944 The first automatic, sequence controlled calculator was designed by Prof. Howard G. Ailcen of
Harvard University and it was called as Mark I.
 1945 ENIAC --- Electronic Numeric Integrator and Calculator
 1949 EDSAC (Electronic Delayed Storage Automatic computer) was built and it had the programs
stored.
 1949 EDVAC --- Electronic Discrete Variable Automatic Computer
 1950 First Programmable digital computer ACE that is Automatic Computing English was built
 1951 UNIVAC I – Universal Automatic Computer was designed and had its commercial sale
 1957 FORTRAN – Formula Translation Language was developed
 1959 COBOL (Common Business Oriented Language) was developed
 1965 BASIC (Beginners All-Purpose Symbolic Instruction Code) was developed
 1970 Intel created memory chip
 1975 First micro computer was designed
 1976 CRAY-I Super computer was designed
 1977 First Apple Micro Computer was designed
 1980 Personal Computers at lower cost are manufactured

EXPLAIN THE VARIOUS GENERATIONS OF COMPUTERS.

Based on the period of development and the features incorporated, the computers are classified into
different categories – from first generation to fifth generation computers.
1. First Generation 1945 -1956 ------- Vaccum Tubes
2. Second Generation 1956 -1963 ------- Transistors
3. Third Generation 1964-1971 ------- Integrated circuits
4. Fourth Generation 1971-1990 -------- Very large integrated circuits
5. Fifth Generation 1990 onwards --- Artificial Intelligence.
1. First Generation (1945-1956)
Introduction of the UNIVAC (Universal Automatic Computer) in 1951 marked the beginning of the
first generation. The following are the general features of these computers
Features First generation
Year 1945-1956
Computer circuitry Vacuum Tubes
Main memory Magnetic drum
Secondary storage Magnetic tapes, magnetice drum
Input media Punched cards, paper tape
output media Punched card, printed reports
Level of programming Low level machine with symbolic
Language programming
Processing Batch processing

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 Application Payroll processing and record keeping
Machines IBM 650, UNIVAC IBM 701 Eniac, Edvac

Characteristics of first generation computers

1. Large in size
2. Slow-operating speed
3. Restricted computing capacity
4. Limited programming capacity
5. Short life span
2. Second Generation (1956-1963)
During the second generation, transistors replaced the vaccum tubes. Initially, magnetic drums and
magnetic core storage were used, but later replaced by transistors. Tape drives and disk drives were used
and the sizes were made small. The machines functioned fastly. They were more reliable. However, they
were to be kept in air-conditioned areas. The second generation computers were faster and smaller due to
the use of transistors. Second generation computers replaced machine language with assembly language
(high level languages like COBOL, FORTRAN). Commercially successful second generation computers
used in businesses, universities and government
Features Second generation
Year 1956 -1963
Computer circuitry Transistors
Main memory Magnetic core
Secondary storage Magnetic tapes, magnetic disk
Input media Punched cards,
output media Punched card, printed reports
Level of programming High level using COBOL & FORTRAN
Processing Introduction of multi programming and real-time
Application Defence, airwing
Machines IBM1401 HONEY WELL 400 CDC 1604 BURROUGH-
200, IBM-1602, NCR 501, IBM 7094, CDC - 6600

3. Third Generation (1964-1971)

Transistors of the second generation were replaced in the third generation by ICs, that is Integrated
Circuits. The machines were made smaller and faster. They are more reliable. Efforts are taken to
assemble the machines mechanically than human intervention. Many high-level languages were used. A
very large number of circuit elements, namely, transistors, diodes and resistors are integrated into a very
small surface of silicon, less than 5 square millimeters, to form ICs. IBM designed system / 360 in 1964.
Features Third generation
Year 1964-1971
Computer circuitry Integrated semi conductor circuits
Main memory Magnetic core
Secondary storage Magnetic tapes, magnetic disk
Input media Key to tape/disk
output media printed reports, video displays
Level of programming Extensive use of high level program
Processing Remote processing and time sharing through communication
Application Airline syste, market forecast credit card billing
Machines IBM 360/370, NCR -395, ICL-1900,ICL-2900,PDP-11,
Spectra-70, Honey well-200, Cray-1, Illac-IV, Cyber 205

4. Fourth Generation (1971-1990)

Microprocessors entered this stage and large-scale integrated circuits were used. Maintenance
becomes minimum and requirement of air-conditioning was relaxed. The components became cheaper and

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manual assembly procedure was reduced. The concept of networking of computers entered this stage and
the industry developed faster than the previous stages.
Features Fourth generation
Year 1971-1990
Computer circuitry Large- Scale Integrated (LSI) semi-conductor circuits
Main memory LSI Circuits
Secondary storage Magnetic disk, floppy disk, magnetic bubble optical disk
Input media Key board data entry, direct input devices, optical scanning
output media Video displays, audio responses, optical scanning
Level of programming Availability of sophisticated program for special application
Processing Advanced in old technology
Application Mathematical modeling simulation and computer aided
Instructions
Machines IBM 3303,HP 30(Mini), HCL, DCM, IDM(Mini), APPLE -11,
Crey XMP, IBM 308, Amdali 580
5. Fifth Generation (1990 onwards)
A lot of research is going on 5th generation computers. This major short coming in the earlier
generation was lack of thinking power. The fifth generation computers combine hardware and software to
produce human intelligence. The institute of New generation computer technology (INGCI) in Japan is
planning to develop knowledge information processing system. Automatic programming, computational
logic, etc. will be used in near future with the development of artificial intelligence. The term artificial
intelligence denotes the ability of the computer is to imitate human skill.
Features Fifth generation
Year 1990 onwards
Computer circuitry Very Large- Scale Integrated (VLSI) semi conductor circuits
Main memory VLSI circuits
Secondary storage Optical disk and card, magnetic disk
Input media Speech input
output media Graphic displays, voice responses
Level of programming Commerciality, based on numeral networks
Processing Advancement in on-line distributed processing
Application Intelligence will be greatly improved with man-machine
and human system
Machines Extensive development of distributed computing merging
of tele communication and computer technologies, extensive
modularity

WRITE AN EXPLANATORY NOTE ON THE IMPACT OF COMPUTERS ON SOCIETY

Business and industry
In business computers are being used for many data processing tasks such as word processing, filling,
assembling numbers and facts associated with general office functions like accounting payroll processing
and personal record keeping
With advances in computer technology, the industrial sector has progressed remarkably in terms of
 New efficient methods of production
 Optimal usage of available resources
 Greater efficiency
 Better quality of products
 Reduction in cost of production and
 Improved safety & reliability
Health care
Computers are also being used for planning and control purpose by health care professionals.
Computer equipment is used to monitor pulse rate, blood pressure and other vital signs.

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Education
Education system is making use of computers on large scale. Computers bring to the educational
process such as attributes as untiring patience and round- the – clock availability. Their use leads to
improves student performance in thinking logical formulating problem-solving procedures and
understanding relationships.
Humanities
In recent years computer usage has increased in people having interests in history, literature, music,
graphics, arts and other branches of humanities. They use it to
 Ease manuscript preparation
 Translate texts from one natural language to another
 Conduct studies that would otherwise be impractical
 Apply artistic talents to a new medium and
 Discover significant stylistic patterns in text
Science and technology
Thousands of scientific applications are processed daily on the computers. One of the most important
daily activities is weather forecasting, which involves solution of mathematical equations using world-wide
data about air pressure, temperature, humidity and other values.
Recreation and entertainment
Our entertainment and pleasure time pursuits have also been affected by computerization. For
example
 In movies, computer generated graphics gives freedom to designers so that special effects and
even imaginary characters can play a part in making movies, videos and commercials.
 In sports, computers compile statistics, sell tickets, create training programs and diets for athletes
and suggest game plan strategies based on the competitor’s past performance
Government
Various departments of our government use computers for their planning, control and law
enforcement activities. To name a few- traffic, tourism, information & Broadcasting, Education, Railways,
Aviation and many others.

EXPLAIN THE VARIOUS KINDS OR CLASSIFICATIONS OF COMPUTERS. OR WHAT ARE

THE DIFFERENT TYPES OF COMPUTERS?
Computers are classified on the basis of operating principles and size of primary storage and
capabilities.
Classification based on purpose

On the basis of On the basis of On the basis of

Principles of Operation Principles of Purpose or Application Principles of Size and Speed
[Link] computer 1. Special purpose computer 1. Micro computer
[Link] Computer 2. General purpose computer 2. Mini computer
[Link] computer [Link] computer
4. Super computer
Classification on the basis of principles of purpose or application
1. Special purpose computers
Special purpose computers are designed for a specific purpose or application or task. They can
perform the given task on a simple command. They may not have additional unnecessary options. They are
designed with instructions of specific type of function. Storage memory of these computers may be limited.

2. General purpose computers

General purpose computers are mainly made for the purpose of meeting different needs of the
people. These are multi-purpose computers, which can prepare sales report, store invoices, payroll,
mathematical and statistical analysis, and various analytical works can be carried out.

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Classification on the basis of principles of operation
1. Analog computers
Analog is a Greek word, which means ‘similar’ Analog computers are those that can measure
the similarities between any two quantities by electrical voltages or current. They use conversion techniques
to measure abstract values. Examples are measurement of temperature, pressure, etc.
Analog computers have special characteristics:
 They operate by measuring
 Physical analog is regarded for operation
 Functions are carried out continuously on varying quantities
 The output is represented in the form of graphs
 These computers are not suited for business or industry
 Low speed is the limitation of analog computers
 Memory space may be limited and only limited operations can be performed and
 The accuracy of output may be poor.
 Not suitable for business and industry.
Analog signal

2. Digital Computers
These computers deal with numbers and can measure the physical relationship. These
computers work according to a set of instructions (called program). They are used for evaluating the
arithmetic expressions and for processing of data. In business, most of the computers now-a-days are of this
type.
Characteristics of Digital computers:
 They operate by counting
 Discrete numbers are used for functioning
 These computers are suited for various business and industry applications
 They have high accuracy and greater memory
 The output values are represented by discrete values
 The calculations are converted into binary numbers
 The computers are used for multiple applications and the processing speed is high, and
 Numbers, words and symbols can be used in digital computers.
Digital signals
1 1 1 1 1
0 0 0 0

Distinguish between analog and digital computers

Analog Computer Digital Computer
Operates by measuring Operates by counting
Require physical analog Function on digits
Calculation converted into equation Converted into binary numbers
and then into electrical signals
Less accuracy More accurate
Less speed High speed
Limited applications Multiple application
Output in the form of graphs Output in the form of discrete values
Less flexible More flexible

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 3. Hybrid computers
Computers having both analog and digital features are called as hybrid computers. Hybrid
computers have the advantages of analog as well as digital computers. Continuous and discrete data can be
processed in these computers. Inputs of both types can be given for required results. For the purpose of
converting analog data into digital and digital data into analog, a converter is devised in these computers.
However, these types of computers have only lesser usage.

Special purpose
Digital

Analog
Hybrid

General purpose
Digital

HYBRID COMPUTERS

Classification on the basis of size and speed or classification of digital computer system
Digital computer systems are classified as Microcomputers, Minicomputers, Mainframes and
Supercomputers.
1. Microcomputers
Microcomputer is a small and portable general purpose computer, consisting of microprocessors
storage in binary form with input, output activities. The entire central processing unit is designed in few
microchips. When it is fitted with memory and input – output control circuitry it is called as microcomputer.
Micro chips contain micro electronic circuitry that is linked electronic components which are very tiny.
Micro computers are able to accept most of the high level languages. The following are the various kinds of
microchips
1. Microprocessor: It has a processing unit, a memory and a special area to handle input and
output.
2. Memory chips: It used to hold information, either temporarily or permanently.
3. Input/output chips: In these chip circuits the flow of information is in both directions.
Features of micro computers
 Its storage capacity is low
 Its rate of acceptance and transfer of data is limited i.e. a maximum of 5lakh bytes/second.
 It is able to accept most high level language.
 The maximum word length it holds is 16-bits
Advantages
 They are small and portable
 They are relatively inexpensive
 They work as soon as they are switched on
 They have excellent graphic capabilities
 They do not occupy much space
 They do not consume much power
Disadvantages
 Micros have a limited storage capacity
 They are relatively slow
Microcomputers have been considered to be of two types –
1. Personal computers (PCs)
2. Workstations

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Personal Computers (PCs)
PCs include desktop or portable machines. These machines ran comparatively easy-to-use
applications software such as the word processors, spreadsheets, etc. They were usually easier to use and
more affordable than workstations.
Ex- Acer’s Aspire, Compaq Presario, etc.
Workstations
Workstations are expensive, powerful machines used by engineers, scientists, and other
professionals who processed a lot of data. People who need to run complex programs and display both work
in progress and results graphically also use workstations.
Ex- Sun, Apollo, Hewlett-Packard, NeXT and IBM.
Portable computers
Computers are becoming smaller yet more powerful. One type of PC that is rapidly growing
in popularity is the portable computer, which can be easily carried around. There are three categories of
portable computers: Laptops or Notebook PCs, Sub notebooks and Personal Digital Assistants.
 Laptops / Notebooks
Laptops may be either AC-Powered, battery-powered, or both. These computers are ideal
for users who have to work away from their offices. These computers combine the power of the PC with
mobility.
 Subnotebooks
Subnotebooks are for frequent flyers and life-on-the-road professionals. Subnotebook users
give up a full display screen and keyboard in exchange for less weight.
Ex- Toshiba portage.
 Personal Digital Assistants (PDAs)
PDAs are much smaller than the sub notebooks. They combine pen input, writing
recognition, personal organizational tools, and communication capabilities in a very small package.
Typical users are executives, businessmen, etc. who use these machines for their day-to-day
activities – Scheduling, organization, etc.
Ex- Apple’s Newton.
2. Minicomputers
The minicomputers are more powerful than microcomputers. The size of minicomputer is in
between the micro and mainframe computers. Multiple users can use this computer. The mini-computers
have the memory capacity of about 2 mega bytes and the word length may be 12, 16 or 32 bits. These
computers can support more than 20 terminals and all the high-level languages.
Features or characteristics of mini computers
 It is a general purpose machine with a smaller CPU than a mainframe
 Its storage capacity is about 2 mega words.
 Its word length are usually 12,16,24 or 32 bits
 It is rate of acceptance and transfer of data is a maximum of 4 million bytes /second.
 It can support all high level languages.
 It can support many terminals i.e. more than 20 terminals.
Advantages
 It performs almost all tasks that a mainframe computer does.
 It is relatively inexpensive and is with in the purchasing power of the small &medium sized
business.
Disadvantages
 They are slower when comparing with mainframe computers
 The memory of mini computer is smaller to the mainframe computer.

3. Mainframe computers
These computers are huge and dynamic with action. They occupy a large space. Its transfer rate
is very high. The word lengths are higher than the other computers. These computers able to accept any high

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level language. A main frame computer can support more number of terminals. It is also called as “Central
host computer”
These computers can process several million program instructions per second. Large
organizations rely on these room-size systems to handle large programs with lots of data.
Mainframes are mainly used by insurance companies, banks, airline and railway reservation
systems, etc. An advanced mainframe made by IBM is S / 390.

Advantages
 They are capable of handling all tasks.
 The storage capacity is about 10 mega words
 The transfer rate is very high i.e. millions of bytes per second.
 The word length are either 24,32,48,64 &128 bits
 They are able to accept any high level languages.
 It can support 500 terminals.
Disadvantages
 They are very expensive
 They require large space
 Their consumption of electricity is very high.
 Maintenance cost is very high.
4. Super computers
Super computers are capable of using several processors simultaneously. These computers are
very costly and their capacity is also very high. They process at a rapid speed and the main memory ranges
from 8 to 64 megabytes. It cannot be compared with any other computers in capacity, function, speed,
accuracy, language etc. The operations are done in parallel rather than sequential.
Features or characteristics of super computers
 They use several processors working simultaneously
 They process at a rapid speed
 They are used in weather forecasting, supersonic aircraft design and other works that require
billions of calculations per second.
 It can support many terminals i.e. more than 20 terminals.
5. Network computers
Network computers are computers with minimal memory, disk storage and processor power
designed to connect to a network, especially the Internet. The idea behind network computers is that many
users who are connected to a network don’t need all the computer power they get from a typical personal
computer. Instead, they can rely on the power of the network servers.

ANATOMY OF A DIGITAL COMPUTER

DISCUSS ABOUT THE VARIOUS FUNCTIONS OF COMPUTER OR DEFINE I-P-O CYCLE. OR
BASIC OPERATIONS OF A COMPUTER.
To function properly, the compute needs both hardware and software. Hardware consists of the
mechanical and electronic devices, which we can see and touch. The software consists of programs, the
operating systems and the data that reside in the memory and storage devices. A computer does mainly the
four following functions.
B Receive input
B Process information
B Produce output
B Store information

Functions of computer ( Contd..,)

I-P-O Cycle denotes the input, process and output cycle. The major operations performed by
digital computers are:

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 (1) Input – Receiving instructions and data from outside through various input devices like
keyboard, mouse etc.
(2) Processing – Manipulation of data based on instructions, and
(3) Output – The processed information is given as output through the output devices like
monitor, printer etc.
I-P-O Cycle
Input Output
Process

Instructions
Input
Input process involves the following three stages. They are:
1. Data preparation, 2. Data processing and 3. Accuracy check.
1. Data preparation
Data preparation has two concepts. They are on-line and off-line data preparation. On-
line refers to an operation or device in which data are transferred directly to or from a computer. Off-line
refers to an operation or device in which data are not immediately transferred to or from a computer.
2. Data Processing
Data processing can be done in two ways. They are (1) Batch processing, and (2) Transaction
processing.
Batch processing is a method in which data are gathered and batched through either an on-line or
off-line data gathering process and processed periodically without user intervention.
Transaction processing is an on-line method in which data are processed immediately and files
are updated as a transaction takes place.
3. Accuracy check
Accuracy checks are the checks made to eliminate errors at the time of data entry. It involves
verification by the user and validation performed by the program in the computer.
Processing
Processing of data is the main objective of using computers. The users reuse processed
information for taking decisions. The input data may be a simple one. But complex operations are to be
performed for setting required results. The steps involved in processing are shown for the purpose of
understanding:
1. Reading,
2. Recording
3. Editing
4. Sorting
5. Calculating
6. Recording results,
7. Output retrieved
Output
The objective of processing information is to set the desired results. The result or output should
be clear, meaningful, accurate and reliable. Results are to be given in a simple form for taking prompt
decisions.
Storage is the process of storing the input data or results for future activities. Data storage is the
specialty of computers and the data processed are stored in memory for future reference or for comparisons
or for further manipulations.
DISCUSS IN DETAIL THE VARIOUS COMPONENTS OF A COMPUTER. OR EXPLAIN
ABOUT THE VARIOUS COMPONENTS OF A COMPUTER.
A computer is a collection of devices that functions as a unit. A computer accepts instructions
and data as input, stores them as long as required, processes the data according to instructions and
communicates the result as output.
Thus, a computer consists of the following three main units:
1. Input Unit
2. Central Processing Unit (CPU)
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 a. Memory Unit,
b. Control Unit, and
c. Arithmetic and Logic Unit
3. Output Unit
1. Input unit
An input unit is that part of the computer which accepts instructions and data from the user to be
processed. The devices that are used to input information into a computer are called input devices.
Input devices include
 Keyboard
 Mouse
 Floppy diskette
 compact disk and so on.
2. Central Processing Unit (CPU)
The central processing unit, as the name itself indicates, is the most important part of a computer.
Therefore, it is called the heart and nerve centre of a computer. This unit performs all the processing,
calculation and arrangement of data.
This unit itself consists of three parts or components
Control unit
Arithmetic unit
Memory unit

(i) Memory Unit

This unit stores all the data and instructions in the form of binary digits (usually called bits).
Memory unit is also called the primary storage or the main memory. It temporarily stores incoming data as
well as intermediate and final results of processing.

Memory

CPU

Input Output
Control unit Devices
Devices

Registers

Arithmetic and
logic unit

--------Components of Digital computer system -----

(ii) Control Unit

It controls the overall operation of the computer system. It is considered as the heart of
the computer system. It controls all the units, directs them to operate in a proper way and coordinates
various operations performed.
It instructs the input device to transfer the data and instructions to the main memory and then to
arithmetic and logic unit, then it sends the processed result from ALU to the memory unit for storage and
transfers it to the visual display unit or to the printer.

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 It coordinates the various parts the computer system- the ALU, memory unit and the peripheral
units. To perform its control operations effectively and quickly the control unit has four basic components.
They are
 Instruction register
 Decoder
 Address register and
 Instruction counter
The instruction register receives one by one the instructions to be executed in the required
sequence. Then, the operation code of the instruction is transferred to decoder, which decodes the operation
code. And it activates the appropriate circuits of the arithmetic and logic unit to perform the operation. The
address register enables the data in the location specified in the instruction to be transferred to a specified
accumulator for the ALU
(iii) Arithmetic and Logic Unit (ALU)
This unit performs two kinds of operations, the arithmetic processing and logical
processing. In arithmetic processing it performs all mathematical operations such as addition, subtraction,
multiplication and division. In logical processing, it performs the relational and logical operations such as
comparing larger or smaller values, true or false statements etc. the ALU of the CPU includes several types
of sub-units and special purpose circuitry such as registers, counters, adders.

 Registers
Computers also have several additional storage locations called registers. These appear in the
control unit and ALU and make processing more efficient. Registers are a sort of special hi-speed staging
areas that hold data and instructions temporarily during processing. Their contents can therefore be handled
much faster than the contents of the memory.
Types of registers
– General purpose register
– Special purpose register
– Memory address register
– Memory buffer register
– Instruction register
– Program counter
 Counter
IT is closely related with registers. It is a device whose contents can be increased or decreased by
a specific amount. The instruction counter is also called the instruction address register and contains the
storage location address of the computer instruction being executed. The index register is a counter
specifically set aside for modifying the portion of an instruction that indicates the address of data to be
manipulated.
 Adders
To locate the characters of data or instructions in the main memory, the computer stores them in
locations known as addresses. A unique number designates each address. Addresses can be compared to
post office mailboxes. Their numbers stay the same, but contents continuously change.
3. Output Unit
The output unit provides results to translate the results of processing into human language, i.e. as
printed results. The output can be in the form of printed paper, data in floppy diskettes, compact disks, etc.

WHAT DO YOU MEAN BY MEMEORY UINT

Memory units are the internal storage areas in a computer. The term “memory” identifies data
storage that comes in the form of chips, and the word “storage” is used for memory that exists on tapes or
disks. The capacity of its memory is defined in terms of kilobytes, megabytes or gigabytes. Where a large
quantity of data are handled, secondary storage devices such as magnetic tapes, disks, floppy disks, etc. are
used. The internal storage is commonly called as the primary storage or the main memory. This storage is
limited. The external storage or the secondary storage or auxiliary storage is the unlimited storage.

13
I. Primary memory / Main memory
The memory unit which communicates directly with the CPU is called the main memory. It is the
area where the data and instructions are stored and are transferred to ALU during processing. The processed
results are stored again for further calculations and sent to the output unit. The primary memory stores
 The instructions that are awaiting to be executed
 The data waiting for processing
 The instruction currently being processed
 The data currently being processed
 The information waiting for output
Types of Main memory / Primary memory
There are two types of memory namely main memory and semi conductor memory.
1) Magnetic Core Memory/ Ferrite Core Memory
Magnetic core memory in the modern computer physically consist of thousands of tiny doughnut
shaped ferrite core arranged in arrays of 64 X [Link] capacity of the primary storage is expressed in terms
of the number of addressable storage locations. Often the capacity will be a multiple of 4096 represents
the
64 x 64 core array. Commercially 1024 words are designated by K and the capacity of 4096 words is taken
as 4K. They require high power and the memory access time is measured in nano second.
Characteristic
 Non-volatile - Even if the current is removed, the information stored in it is not lost.
 Memory access time is about nanosecond
 High power
 Relatively large and heavy
 Best for large memories

2) Semiconductor Memory
Semiconductor memories are devised in the modern computers. These memories are faster and
cheaper. They are available in small boards. Semiconductor memory consists of electronic circuits
prepared on silicon chips. The electronic circuit is called flip-flop. A flip-flop circuit can store either 1 or 0.
It is also called as storage cells. It is faster than magnetic core memory.
Characteristic
 It is volatile
 It is faster than magnetic core memory
 Low power consumption
 Relatively Small & tight
 Best for small & medium sized memories
 Semi conductor memories are cheaper in small system
Types of semiconductor memories
Semi conductor memories are divided into RAM, ROM.
1. RAM – Random Access Memory
It is used for reading and writing. RAM is the most common type of memory found in computers
and other devices, such as printers.
Types of RAM
 Dynamic RAM (DRAM)
In dynamic RAM, constant supplies of electric pulses are needed. It should be
refreshed frequently. The refresh circuitry can be shared by all memory chips in the computer. It loses its
stored information in a very short time a few milliseconds even though the power supply is on. The
memories are cheaper and have high packing density and moderate speed.
 Static Ram (SRAM)
It retains stored information only as long as the power supply is on. These are costlier
and consume more power. They need not refreshing circuitry. They have higher speed than dynamic RAMs.
Distinguish between dynamic ram and static ram.

14
 Dynamic RAM Static RAM.
Bit stored in charge form Bit stored in the voltage
Fast operation Slow operation
Refreshing required Refreshing not required
High packing density Low packing density
Base element capacitor Base element flip-flop
ROM (Read Only Memory)
In ROM, the values are written once by the manufacturer and they can be subsequently read. It is
available only for micro programmers. Storage capacity cannot be altered by regular program instructions.
Fresh information cannot be written into it. ROM may be used in code converter.
PROM (Programmable Read Only Memory)
In PROM, the values are written once by the programmer and then can be read. These are
supplied in blank form and users program their own requirements. Once programmed, these devices cannot
be reprogrammed so that they become read only memory.
EPROM (Erasable Programmable Read only Memory)
In EPROM, values can be rewritten using special techniques only. In these devices, the
programs can be completely erased by exposing them through the window or to a string of ultraviolet light
for about 50 seconds. It can be reprogrammed again. Data can be erased by applying a high voltage pulse
to the programming pins.
EEROM (Electrically Erasable Programmable Read only Memory)
In EEPROM, the information or the program can be changed by electrical signals. They can be
reprogrammed electrically without removing from circuit board.
Flash memory
Flash memory is a special type of EEPROM that can be erased and reprogrammed in blocks
instead of one byte at a time. Many modern PCs have their BIOS (Basic Input Output System) stored on a
flash memory chip so that it can easily be updated if necessary. Such a BIOS is sometimes called flash
BIOS. Flash memory is also popular in modems because it enables the modern manufacturer to support new
protocols as they become standardized.
Distinguish between primary storage and secondary storage.

Primary storage Secondary storage

Located in CPU Located outside CPU but connected to CPU
Most expensive Low cost
Processing in CPU Transferred to CPU and then processed
Capacity in million bits Capacity in billion bits
Very quick access Quick access
II. Secondary memory
Secondary storage devices are the paper tapes, magnetic tapes, microfilm, floppy disks, hard disks
and optical disks. The secondary storage device are used for the following purposes
 Storing data/information for retrieval at a later date
 Supply the data and instructions to the CPU (output operations)
 Receive the results from the CPU
EXPLAIN WHAT ARE THE DIFFERENT KINDS OF INPUT DEVICES
For computer processing, data needs to be entered into the computer (input) and the results of
processing needs to be communicated to the user (output). Input is the process of entering and translating
incoming data into machine readable form. The data to be entered are often referred to as input. Output is
the process of translating data in machine- readable form into a form understandable by humans or readable
by other machines. The three things to be concerned with during the input process are
 The method of data preparation
 The type of processing to be used
15
  The accuracy of the data being entered

Data preparation methods

There are two concepts related to data being entered
i) On-line – it refers to an operation or device in which data are transferred directly to or
from a computer
ii) Off-line – it refers to an operation or device in which data are not immediately
transferred to or from a computer. The end product of an off-line input operation may be used as data for an
on-line input operation. Now-a-days, on-line devices and operations are most commonly used.
Data for input can be prepared into two ways.
a.) Transcriptive data entry – the data are prepared on documents at the source of the
data. The data must then be transcribed
b.) source data entry – the data are prepared at the source in a machine readable form that
can be used by a computer without a separate intermediate data transcription step. This type of data
preparation reduced the number of errors during input process.

Data processing
The two main data processing methods are
 Batch processing – it is a method in which data are gathered and batched through either
an on-line or off-line data gathering process and processed periodically without user-intervention.
 Transaction processing – it is an on-line method in which data are processed
immediately, and files are updated as a transaction as takes place.

Data Accuracy
There are two most commonly used methods which are used to help eliminate errors, at any time
of data entry.
1. Verification which is performed by the user - this can be conducted by corroborating
the data entered by checking them against a known source.
2. Validation which is programmed into the computer –computer can be programmed to
accept only a certain range of data. Checking for data items that deviate from this range is called validation.

The following are the various types of input devices

 Punched Tape Reader  Optimal mark Reader
 Punched card Reader  Optimal Character Reader
 Magnetic tape  Bar code reader
 Cassette Tape  Visual Display unit
 Magnetic Disk  Light pen
 Floppy Disk  Mouse
 Electronic Key board  Joystick
 Magnetic Ink Character Reader  Touch screen

16
1. Punched cards
It used for recording data and instructions in the form of punched holes and sequentially read by card
reader which sends data & instruction to the CPU. It used for data processing are made generally 80 columns
and 12 rows. In card punched hole represent the binary 1 and absence of hole represent 0. It is not reusable
and if punched wrongly it cannot be corrected. For computer programs many number of cards required. Such
collection of card is called a deck.
Advantage
 It is easy to read data on cards
 It is less expensive and simple to operate
 If an error is detected, the whole system stops functioning.
Disadvantage
 When bulky require large space
 Easily damaged and perishable
 Transfer of data is very slow.
 An incorrectly card cannot be corrected but replaced.
 It Requires manual intervention
 It is not processed in ordinary language.
2. Punched Tape Reader
It is a continuous strip of paper about one inch wide and up to 300 meters large. The characters are
recorded on the tape which may be 5 or 8 as per the design of the tape. These punched positions are called as
channels. Data from tape is read through a tape recorder per second. The tape comes in various forms viz., oil
paper, dry paper, metallised paper, etc.
Advantage
 It is more compact and economic on storage
 It is less in weight and easy for mailing, etc.
Disadvantage
 It is time consuming and very tedious process.
 It is inconvenient to store for a long period.
3. Magnetic tape
Magnetic tape is made up of plastic with a metallic magnetic oxide coating on one side. Data is
recorded on either at parallel track tape or on a 9 parallel track tape. The number of character per inch length
of tape store is called the density of the tape. This varies from 550 to 1600 or even 1 [Link] 9 track tapes have
the higher densities.
Advantages
 It is very compact to store
 It is easy to handle
 It is less expensive and reusable
 Speed is very high for transferring
Disadvantages
 The data has to be accessed sequentially
 It is subject to usual wear and tear of time
 Data will be erased if kept near or expose to magnetic field.
4. Magnetic Disk
The data stored on disk can be read randomly while in the magnetic tape, the data are read
sequentially. Random access in the file can be detected directly and the access time is saved. It is accessed in
a fraction of second i.e. less than 0.01 [Link] disk varying in diameter are generally coated on both sides
with magnetic oxide. Each surface of the disk is divided in to a number of sectors are called storage segments.
The storage segment is a specific portion of a specific side of the disk. The segment can store one or more
record of a file, it varies according to the size of the record.
Advantages
 Direct access data is possible
  It is more durable than the tape
 The storage capacity of the disk is large
Disadvantage
 it is more sophisticated hardware
 Disk comes in pack and a disk pack is heavy.
5. Keyboard
Keyboard is an important input device consisting of a set of typewriter-like keys that enable you to
enter data into a computer. Computer keyboards are similar to electric-typewriter keyboards but contain
additional keys. The keys on computer keyboards are often classified as follows:
 Alphanumeric keys – Letters and numbers
 Punctuation keys – Comma, period, semicolon, and so on.
 Special keys – function keys, control keys, arrow keys, caps lock key, and so on.

QWERTY Keyboards: The standard layout of letters, numbers, and punctuation is known as a
QWERTY keyboard because the first five keys on the top row of letters spell QWERTY.
There is no standard computer keyboard, although many manufacturers imitate the keyboards of
PCs. There are actually three different PC keyboards:
 Original PC keyboard with 84 keys
 AT key board with 84 keys
 Enhanced key board with 101 keys
 IBM key board - It contains the following keys – Page Up, Page Down, Home, End, Insert,
Pause, Num Lock, Scroll Lock, Break, Caps Lock, and Print Screen.
 Ergonomic keyboard - Ergonomic keyboards are developed to reduce the strain while typing
with the aim to prevent stress related injuries. Microsoft’s natural keyboard is one example.
6. Mouse
Mouse is a device that controls the movement of the cursor or pointer on a display screen. A
mouse is a small object you can roll along a hard, flat surface. As you move the mouse, the pointer on the
display screen moves in the same direction. Mice contain at least one button and sometimes as many as three,
which have different functions depending on what program is running.
The mouse is important for graphical user interfaces because you can simply point to options and
objects and click a mouse button. Such applications are often called point-and-click programs.
The mouse is also useful for graphics programs that allow you to draw pictures by using the
mouse like a pen, pencil or paintbrush.

Types of Mouse or mice

There are three basic types of mouse
Mechanical has a rubber or metal ball on its underside that can roll in all directions and move
the screen pointer accordingly.
Optomechanical Same as a mechanical mouse, but uses optical sensors to detect motion of
the ball.
Optical Uses a laser to detect the mouse’s movement. The user must move the mouse along a
special mat with a grid.
Mouse pad
Mouse pad is a pad over which you can move a mouse. Mouse pads provide more
traction than smooth surfaces such as glass and wood, so they make it easier to move a mouse accurately.
7. Trackball
Trackball is another pointing device. Essentially, a trackball is a mouse lying on its back. There
are usually one to three buttons next to the ball, which you use just like mouse buttons.
The advantage of trackballs over mice is that the trackball is stationary so it does not require much
space to use it. In addition, you can place a trackball on any type of surface, including you lap. For both
these reasons, trackballs are popular pointing devices for portable computers.
8. Joystick
 A joystick is, similar to a mouse, a lever that moves in all directions and controls the movement of
a pointer or some other display and symbols. The pointer continues moving in the direction the joystick is
pointing. To stop the pointer, you must return the joystick to its upright position. Most joysticks include two
buttons called triggers.
They are used mostly for computer games, but they are also used occasionally for CAD / CAM
systems and other applications.

9. Digitizing tablet
This is an input device that enables you to enter drawings and sketches into a computer. A
digitizing tablet consists of an electronic tablet and a cursor or pen. A cursor (also called a puck) is similar to
a mouse; expect that it has a window with cross hairs for pinpoint placement, and it can have as many as 16
buttons. For digitizing tablets,
9. Scanners
Scanners are used to read text or illustrations printed on paper and translate the information into a
form that the computer can use.
Optical scanners do not distinguish text from illustrations; they represent all images a bit maps.
Therefore, you cannot directly edit text that has been scanned. To edit text read by an optical scanner, you
need an optical character recognition (OCR) system to translate the image into ASCII characters. Most optical
scanners sold today come with OCR packages.
10. Digital Camera
Images can be input into a computer using a digital camera. These images can then be
manipulated in many ways using the various imaging tools available.
The digital camera takes a still photograph, stores it, and then sends it as digital input into the
computer. The images are then stored as digital files.
11. Magnetic Ink Character Recognition (MICR)
MICR allows the computer to recognise characters printed using magnetic ink. MICR is a direct-
entry method used in banks. A related technology is the magnetic strip, used on the back of credit cards and
bank debit cards that allows readers such as Automated Teller Machines (ATMs) to read account information
and facilitate monetary transactions.

Advantages
 It is very high reading accuracy.
 It can be handled without transcribing on floppy disk, magnetic tape, etc.
 Cheques can be read both by human beings and machines.
Disadvantages
 MICR has found much favour from business
 Damaged documents, cheques not encoded with amount etc., have to be clerically processed.
12. Optical Character Reader (OCR)
Optical character recognition refers to the branch of computer science that involves reading text
from paper and translating the images into a form that the computer can manipulate. An OCR system enables
you to take a book or a magazine article and feed it directly into an electronic computer file.
All OCR systems include an optical scanner for reading text, and sophisticated software of
analyzing images. Advanced OCR systems can read text in a large variety of fonts, but they still have
difficulty with handwritten text.

Advantages
 It eliminates the human effort of transcription
 Paper work explosion can be handled
 Document can be typed /handwritten for that very skilled staff is not required
 Input preparation devices are much cheaper than the key punch or key to tape devices.
Disadvantages
  Rigid input requirements .They are usually specific requirements for type font and size of
character to be used .In typing there is always the scope for strikeover uneven spacing, smudges
and erasures, become critical and have to be standardized.
 Most optical readers are not economically feasible unless the daily volume of transactions is
relatively high. Further developments in OCR are likely to make optical readers much cheaper.
13. Optical Mark Reader (OMR)
Optical Mark Recognition (OMR) also called mark sensing is a technology where an OMR device
senses the presence or absence of a mark, such as a pencil mark. OMR is used in tests such as aptitude tests.
14. Bar Code Reader
Bar code readers are photoelectric scanners that read the bar codes, or vertical zebra striped marks,
printed on product containers. Supermarkets use a bar code system called the Universal Product Code (UPC).
15. Speech Input Devices
Speech or voice input devices convert a person’s speech into digital form. These input devices,
when combined with appropriate software, form voice recognition systems. These systems enable users to
operate microcomputers using voice commands.
A newly developed voice recognition system like IBM Voice Type identifies more than 30000
words. There are two types of voice recognition systems:
 Continuous Speech
 Discrete –word
Continuous Speech: Continuous speech recognition systems are used to control a
microcomputer’s operations and to issue commands to special application programs. For example, rather than
using the keyword to save a file, the user could simply say “Save the file”.
Discrete-word: A common activity in business is preparing memos and other written documents.
Discrete-word recognition systems allow users to dictate directly into a microcomputer using a microphone.
The microcomputer stores the memo in a word processing file where it can be revised later or directly printed
out.
16. Touch Screen
Touch screen is a type of display screen that has a touch-sensitive transparent panel covering the
screen. Instead of using a pointing device such as a mouse or light pen, you can use your finger to point
directly to objects on the screen.
Touch screens provide a natural interface for computer novices. It is impossible to point
accurately to small areas of the screen. In addition, most users find touch-screens tiring to the arms after long
use.
17. Touch Pad
A small, touch-sensitive pad used as a pointing device on portable computers. By moving a finger
or other object along the pad, you can move the pointer on the display screen.
18. Light Pen
Light pen is an input device that utilizes a light-sensitive detector to select objects on a display
screen. A light pen is similar to a mouse, except that with a light pen you can move the pointer and select
objects on the display screen by directly pointing to the objects with the pen.
19. Floppy disk
In 1970’s IBM introduced a new medium for storing data. This medium consists of a circular piece
of plastic called material. The circular piece of plastic called a disk, is enclosed in a square protective jacket
with a cut out so that the magazine surface is exposed .when inserted in the appropriate hardware device, the
disk is rotated inside the protective jacket, allowing keyed data or data from main computer memory to be
stored on the rotating disk. Once data is stored on the disk it can be read from the disk in to main rotating
disk. Once data is stored on the disk, it can be read from the disk in to main computer. This medium for input
and auxiliary storage is called a floppy disk

WHAT IS AN OUTPUT DEVICE?

 It is a device through which the data processing results are presented to the user. Among various
output devices are available to present the results. The copy of the result which is on the screen is called soft
copy and printed copy of the results is called as hard copy.

WHAT ARE THE MAJOR OUTPUT DEVICES FOR A COMPUTER?

1. Visual Display Unit (Monitor)
Visual Display Unit is in the model of television set and the output information is displayed by
Cathode Ray Tube (CRT). VDU is used to display data, graphics, letters, pictures, etc. It is otherwise called
as Monitor.
Characteristics of a monitor
Size: The most important aspect of a monitor is its screen size. Like televisions, screen sizes are
measured in diagonal inches, the distance from one corner to the opposite corner diagonally. A typical size
for small VGA monitors is 14 inches. Monitors that are 16 or more inches diagonally are often called full-
page monitors.
Resolution: The resolution of a monitor indicates how densely the pixels are packed. Pixel is
short for picture element. A pixel is a single point in a graphic image. Graphics monitors display pictures by
dividing the display screen into thousands of pixels, arranged in rows and columns.
Bandwidth: The amount of data that can be transmitted in a fixed amount of time depends on the
bandwidth of the monitor. For digital devices, the band width is usually expressed in bits or bytes per second
(bps). For analog devices, the bandwidth is expressed in cycles per second or Hertz (Hz).
Refresh Rate: Display Monitors must be refreshed may times per second. The refresh rate
determines how many times per send the screen is to be refreshed.
Dot-pitch: A measurement that indicates the vertical distance between each pixel on a display
screen is known as dot pitch. Measured in millimeters, the dot pitch is one of the principal characteristics that
determine the quality of display monitors. The lower the number, the crisper the image. The dot pitch of
colour monitors for personal computers rages from about 0.15 mm to 0.30 mm. Another term for dot pitch is
phosphor pitch.
Convergence: Convergence refers to how sharply an individual colour pixel on a monitor appears.
Each pixel is composed of three dots –a red, blue, and green one. If the dots are badly misconverged, the
pixel will appear blurry. All monitors have some convergence errors, but they differ in degree.

Types of monitors
 Based on colour
There are many ways to classify monitors. The most basic is in terms of colour capabilities, which
separates monitors into three classes:
* Monochrome
Monochrome monitors actually display two colours, one for the background and one for
the foreground. The colours can be black and white, green and black, or amber and black.
* Gray-scale
A gray-scale monitor is a special type of monochrome monitor capable of displaying
different shades of gray.
* Colour
Colour monitors can display anywhere from 16 to over 1 million different colours.
Colour monitors are sometimes called RGB monitors because they accept three separate signals – red, green,
and blue. This differs from colour televisions, for example, which use composite video signals, in which all
the colours are mixed together.

 Based on signals
Another common way of classifying monitors is in terms of the type of signal they accept: analog
or digital.
* Digital Monitor
A digital monitor accepts digital signals rather than analog signals. All monitors use
CRT technology, which is essentially analog. The term digital refers only to the type of input received from
the video adapter. A digital monitor then translates the digital signals into analog signals that control the
actual display.
* Analog Monitor
This is the traditional type of colour display screen that has been used for years in
televisions. In reality, all monitors based on CRT technology (that is, all monitors except flat-panel displays)
are analog. Some monitors, however, are called digital monitors because they accept digital signals from the
video adapter.

2. Printers
Printer is device that prints text or illustrations on paper and in many cases on transparencies and
other media. There are many different types of printers. In terms of the technology utilized, printers fall into
the following categories.
 Daisy-wheel printer
A daisy-wheel printer works on the same principle as a ball-head typewriter. The daisy wheel
is a disk made of plastic or metal on which characters stand out in relief along the outer edge. To print a
character, the printer rotates the disk until the desired letter is facing the paper.
 Dot-matrix printer
Dot-matrix printers create characters by striking pins against an ink ribbon. Each pin makes a
dot, and combinations of dots form characters and illustrations. Dot matrix printers are inexpensive and
relatively fast, but they do not produce high-quality output.
 Ink-jet printer
Inkjet printer spits out tiny drops of ink along parallel trajectories and then uses electrical
forces to control. The drops will end up on the paper. Inkjet printers are capable of producing high quality
print approaching that produced by laser printers. A typical inkjet printer provides a resolution of 300 dots
per inch, although some newer models offer higher resolutions.
 Laser printer
Laser printer utilizes a laser beam to produce an image on a drum. The light of the laser alters
the electric charge on the drum wherever it hits. Finally, the toner is transferred to the paper through a
combination of heat and pressure. This is also the way copy machines work.
 LCD & LED Printers
Similar to laser printer but uses liquid crystals or light-emitting diodes rather than a laser to
produce an image on the drum.
 Line printer
Line printers are high-speed printers capable of printing an entire line at one time. A fast line
printer can print as many as 3000 lines per minute. The disadvantages of line printers are that they can print
only one font, they cannot print graphics, the print quality is low, and they are very noisy.
 Thermal Printer
Thermal printers are printers that produce images by pushing electrically heated pins against
special heat-sensitive paper. Thermal printers are inexpensive and are used in most calculators and many fax
machines. They produce low-quality print, and the paper tends to curl and fade after a few weeks or months.

3. Plotters
Plotter is a device that draws pictures on paper based on commands from a computer. Plotters
differ from printers in that they draw lines using a pen. As a result, they can produce continuous lines,
whereas printers can only simulate lines by printing a closely spaced series of dots. Multicolour plotters use
different-coloured pens to draw different colours.
Plotters are considerably more expensive than printers. They are used in engineering applications
where precision is mandatory.
4. Sound Cards & Speakers
An expansion board that enables a computer to manipulate and output sounds. Sound cards enable
the computer to output sound through speakers connected to the board, to record sound input from a
microphone connected to the computer, and manipulate sound stored on a disk.
Sound cards use two basic methods to translate digital data into analog sounds.
  FM (Frequency Modulation) Synthesis mimics different musical instruments according to
built-in formulas.
 Wavetable synthesis relies on recordings of actual instruments to produce sound.
Wavetable synthesis produces more accurate sound, but is also more expensive.
3D Audio
3D Audio is technique for giving more depth to traditional stereo sound. Typically, 3D sound, or
3D audio, is produced by placing a device in a room with stereo speakers. The device dynamically analyzes
the sound coming from the speakers and sends feedback to the sound system so that it can readjust the sound
to give the impression that the speakers are further apart.

WHAT IS AN AUXILIARY STORAGE DEVICE OR SECONDARY STORAGE DEVICES?

Auxiliary storage also known as auxiliary memory or secondary storage is the memory that
supplements the main storage. This is a long-term, non-volatile memory. The term non-volatile means it
stores and retains the programs and data even after the computer is switched off.
There are two types of auxiliary storage devices. This classification is based on the type of data
access: Sequential and random.
 In the case of sequential-access media, the data stored in the media can only be read in sequence
and to get to a particular point on the media you have to go through all the preceding points.
Magnetic tapes are examples of sequential-access media.
 Disks are random-access media because a disk drive can access any point at random without
passing through intervening points. Other examples of direct-access media are magnetic disks,
optical disks, zip disks, etc.

EXPLAIN THE DIFFERENT TYPES OF AUXILIARY STORAGE DEVICES OF A COMPUTER.

 Magnetic Tape
Magnetic tape is a magnetically coated strip of plastic on which data can be encoded. Tapes for
computers are similar to the tapes used to store music. Storing data on tapes is considerably cheaper than
storing data on disks. Tapes also have large storage capacities, ranging from a few hundred kilobytes to
several gigabytes.
Helical-Scan Cartridge: Helical-Scan Cartridge is a type of magnetic tape that uses the same
technology as VCR tapes. The term helical scan usually refers to 8-mm tapes, although 4-mm tapes use the
same technology.
DAT Cartridge: DAT (Digital Audio Tape) is a Type of magnetic tape that uses an ingenious
scheme called helical scan to record data. A DAT cartridge is slightly larger than a credit card and contains a
magnetic tape that can hold from 2 to 24 gigabytes of data. It can support data transfer rates of about 2 MBps.

 Winchester Disk
The term Winchester comes from an early type of disk drive developed by IBM that stored 30MB
and had a 30-millisecond access time; so its inventors named it a Winchester in honor of the 30-caliber rifle of
the same name. Although modern disk drives are faster and hold more data, the basic technology is the same,
so Winchester has become synonymous with hard disk.

 Hard Disk
Hard disk is a magnetic disk on which you can store computer data. Hard disks hold more data
and are faster than floppy disks. A hard disk, for example, can store anywhere from 10 megabytes to several
gigabytes, whereas most floppies have a maximum storage capacity of 1.4 megabytes.
A single hard disk usually consists of several platters. Each platter requires two read/write heads,
one for each side. All the read/write heads are attached to a single access arm so that they cannot move
independently. Each platter has the same number of tracks, and a track location that cuts across all platters is
called a cylinder.
Hard disks are less portable than floppies, although it is possible to buy removable hard disks.
There are two types of removable hard disks: Disk packs and removable cartridges.
  Floppy Disk: Floppy disk is a soft magnetic disk. It is called floppy because it flops if you wave it.
Unlike most hard disks, floppy disks are portable, because you can remove them from a disk drive. Disk
drives for floppy disks are called floppy drives. Floppy disks are slower to access than hard disks and have
less storage capacity, but they are less expensive and are portable.
Floppies come in two basic sizes:
 5¼ inch – The common size for PC’s made before this type of floppy is generally capable
of string between 100K and 1.2 M.B of data.
 3½ inch – Floppies have a larger storage capacity than their cousins – from 400K to 1.4
M.B of data.

 Zip Disk: These are high-capacity floppy disk drives developed by the Iomega Corporation. Zip
disks are slightly larger than the conventional floppy disks, and are about twice as thick. They can hold 100
MB of data. They have become a popular media for backing up hard disks and for transporting large files.

 Jaz Disk: These are removable disk drives developed by the Iomega Corporation. The Jaz drive has
a 12-ms average seek time and a transfer rate of 5.5bps.
The removable cartridges hold 1 GB of data. The fast data rates and large storage capacity make it
a viable alternative for backup storage as well as everyday use.

 Super disk: This is a new disk storage technology developed by the Imation Corporation that
supports very high-density diskettes. Super Disk diskettes are etched with a servo pattern at the factory. This
pattern is then read by the Super Disk drive to precisely align the read / write head.

 Optical disk: Optical Disks are a storage medium from which data is read and to which it is
written by lasers. Optical disks can store much more data – up to 6 gigabytes (6 billion bytes) – than
magnetic media, such as floppies and hard disks. There are three basic types of optical disks:
CD-ROM – Like audio CDs, CD-ROMs come with data already encoded onto them. The data is
permanent and can be read any number of times, but CD-ROMs cannot be modified.
WORM – This term stands for write –ones, read-many. With a WORM disk drive, you can write
data onto a WORM disk, but only once. After that, the WORM disk behaves just like a CD-ROM.
Erasable – Optical disks that can be erased and loaded with new data, just like magnetic disks.
These are often referred to as EO (Erasable Optical) disks.

 CD-ROM: CD-ROM, which is pronounced as ‘see-dee-rom’, is the abbreviation of Compact Disc-

Read-Only Memory. CD-ROM is a type of optical disk capable of storing large amounts of data – up to 1
GB, although the most common size is 630MB (megabytes). A single CD-ROM has the storage capacity of
700 floppy disks, enough memory to store about 300000 text pages.
CD-ROMs are recorded by the vendor, and once recorded, they cannot be erased and filed with
new data. To read a CD, you need a CD-ROM player.

 CD-R Drive: CD-R drive, which is short for Compact Disk-Recordable drive, is a type of disk drive
that can create CD-ROMs and audio CDs. This allows the users to ‘master’ a CD-ROM or audio CD for
publishing.
A feature of many CD-R drives, called multisession recording, enables you to keep adding data to
a CD-ROM over time. To create CD-ROMs and audio CDs, you’ll need not only a CD-R drive, but also a
CD-R software package.

 CD-RW Disks: CD-RW disk is short for CD-ReWritable disk and this is a new type of CD disk that
enables you to write onto it in multiple sessions. One of the problems with CD-R disks is that you can only
write to them once. With CD-RW drives and disks, you can treat the optical disk just like a floppy or hard
disk, writing data onto it multiple times.

 Magneto-Optical (MO) drives: This is a type of disk drive that combines magnetic disk
technologies with CD-ROM technologies. Like magnetic disks, MO disks can be read and written to. And
like floppy disks, they are also removable. However, their storage capacity can be more than 200 megabytes,
much greater than magnetic floppies. In terms of data access speed, they are faster than floppies and CD-
ROMS, but not as fast as hard disk drives.

UNIT- I COMPLETED

UNIT - II
COMPUTER SYSTEM
A computer needs both hardware and software for its proper functioning. It is a combination of
various components. It performs the system functions in input, processing, output and control.

[Link]
The physical components of the computer, such as electrical, electronics and mechinal units are
known as the hardware of the computer. Input units, output units and CPU are called hardware. Thus
hardware is the equipment involved in the function of a computer. It consists of the components that can be
physically handled.
HARDWARE
CPU

CONTROL UNIT
Input Output
Devices ALU UNIT Devices
MEMORY UNIT
Keyboard Printer
Mouse VDU
Light pen Secondary storage Plotter
Touchscreen Audio
response unit

-Magnetic tape
-Magnetic disk
-Optical disk
-Floppy disk
2. Software
In order to build an information system, both hardware and software are essential. Software is the
instruction given to the computer to perform the desired task. It is a set of instructions written in the
prescribed from to get proper results. It acts as an interface between the user and the computer.
3. Humanware or Liveware
The man machine interface is called as humanware. That is people who work with the computer are
collectively called as liveware or humanware.
4. Firmware
The computer programs permanently stored in ROM or PROM are called firmware. These
programs are provided by the hardware manufactures along with the computers. Generally these are booting
programs which help in starting computer. Such programs cannot be erased or overwritten.
5. Bridgeware
 The computer components and programs used to translate instructions and information written for
one type of computer into a format that another type of computer can be understand is called bridgeware. This
is necessary because different computers are made by different manufacturers.

What are the different types of software used in a computers?

Software causes the hardware to do work. It consists of low-level programs that interact with the
computer at a very basic level. This includes operating systems, compilers, and utilities for managing
computer resources. The software can be broadly classified into the following two categories

I. System Software
a. System Management Software
 Operating systems
 Database Management Systems
 Communication Systems
b. System Support Software
 System Utilities
 System Performance Software
 System security software
c. System Development software
 Programming Languages
 Debugging
 Editing
II. Application Software
a. General Purpose
 Word processing
 Excel and Access
 Spreadsheets
 Desktop publishing
 Paint
 Imaging
 Computer Graphics
b. Special or specific purpose
 Accounting
 Education
 Games
 Marketing
 Finance
 Manufacturing or Production

DIFFERENCE BETWEEN HARDWARE AND SOFTWARE

Hardware Software
It is the physical units It is a collection of program
It consists of components like ICs, SSI, It consists of numerals, alphabets, special
MSI, Resistors, insulators Diode. symbols, signs, control etc.
The design can be modified according to It is designed according to the type of
the capacity computer
It consists of input, output, ALU, control It is categorised as operating system,
unit, main memory and auxiliary memory. utility programs, language processors and
etc. application programs etc.
It works with binary code. It is represented by the high level
languages such as BASIC, FORTRAN,
COBOL, PASCAL etc.
It understands only machine language or It is written by a well versed programmer
low level language or binary in high level language which is readable
 by human beings

I. System Software
System software consists of machine language program, which allow the user to communicate
with computer for making a program. These software are developed b y the manufactures for a particular type
of computer. It includes the programs that control and support the computer system and this data processing
application. It includes the following

 Programming languages  Utility programs

 Operating system  Diagnostic routines
 Subroutines  Language translators
  Operating system
Operating systems are the most important programs that run on a computer. Every general-
purpose computer must have an operating system to run other programs. Operating systems perform basic
tasks, such as recognizing input from the keyboard, sending output to the display screen, keeping track of
files and directories on the disk, and controlling peripheral devices such as disk drives and printers. Most
commonly used operating systems include Microsoft Windows, DOS, Xenix, Mac OS, OS/2, UNIX, MVS,
etc.
 Programming languages
It is a part of the software or programming aids provided by the manufacturer. A programming
language is used in writing programs to direct processing steps to be carried out on by a computer. The
programming languages can be divided as follows
 Machine language
 Assembly language
 High level language
 Utilities
These are also pre written programs, usually by the manufactures and supplied with the system. It
is a program that performs a very specific task, usually related to managing system resources. Operating
systems contain a number of utilities for managing disk drives, printers, and other devices.
Utilities differ from applications mostly in terms of size and complexity. For example, word
processors, spreadsheet programs, and database applications are considered applications because they are
large programs that perform a variety of functions not directly related to managing computer resources. The
following tasks are performed by the utility programme
 Sorting data
 Editing the output data
 Converting data from one recording medium to another
 Dumping of data to tape or disc
 Tracing the operation of program.
 Compliers and Interpreters
Compiler is a program that translates source code into object code. The compiler
derives its name from the way it works, looking at the entire piece of source code and collecting and
reorganizing the instructions. Thus, a compiler differs from an interpreter, which analyzes and executes
each line of source code in succession, without looking at the entire program. The advantage of interpreters
is that they can execute a program immediately. Compilers require some time before an executable program
emerges. However, programs produced by compilers run much faster than the same programs executed by
an interpreter.
 Assembler
Assemblers are software programs, which translate the assembly language program to
machine language compilers, are like the complex ones. They translate the high level programming
language into machine instructions. The assembler reads all instruction written using memories into binary
codes and symbolic memory addressing into equivalent binary addressing.

DIFFERENCE BETWEEN ASSEMBLER AND COMPILER

Assembler Compiler
Translator generates one machine language Generates numerous machine language
instruction for each symbolic instruction instructions from one compiler statement
Lower flexibility Higher flexibility
One-to-one translation One-to-many translation
More program timing Less program timing
Mnemonic code is required Programmer own language
Symbolic instruction Designed for desired results
DIFFERENCE BETWEEN COMPILER AND INTERPRETER
Compiler Interpreter
Translates high level language into machine Translates the instructions and executes
language
Not involved in execution Involved in execution
Whole program into machine language One statement at a time and immediately
executed
More complex in nature Less complex in nature
Takes more time Takes less time
Large memory space is required Lesser memory space is required
Not easy to write Easy to write
Compiled program runs fast Program runs slow.

 Data base management system (DBMS)

A DBMS is a collection of programs that enable you to store, modify, and extract information
from a database. There are many different types of DBMS, ranging from small systems that run on personal
computers to huge systems that run on mainframes. The following are some examples of database
applications – computerized library systems, automated teller machines, flight and railway reservation
systems, computerized inventory systems, etc.
 Diagnostic routines
These programs are usually written and provided by the computer manufactures. They assist in
program debugging. They usually trace the processing of the program being debugged. These are treated as
a utility or service program.

II. Application software

Application software is a computer program designed to help people perform a certain type of
work. An application differs from the operating system, utility and a language. Depending on the work for
which it was designed, an application can manipulate text, numbers, graphics, or a combination of these
elements.
 Word Processors
A word processor is a program that enables you to perform word processing functions. Word
processors use a computer to create, edit, and print documents. Of all computer applications, word
processors are the most common.
To perform word processing, you need a computer, the word processing software and a printer.
A word processor enables you to create a document, store it electronically on a disk, display it on a screen,
modify it by entering commands and characters from the keyboard, and print it on a printer.
 Spreadsheets
A spreadsheet is a table of value arranged in rows and columns. Each value can have a
predefined relationship to the other values. If you change one value, therefore, you may need to change
other values as well.
Spreadsheet applications are computer programs that let you create and manipulate spreadsheets
electronically. In a spreadsheet application, each value sits in a cell. One can define what type of data is in
each cell and how different cells depend on one another. The relationships between cells are called
formulas, and the names of the cells are called labels.
 Computer Graphics
Presentation graphics enable users to create highly stylized images for slide shows and reports.
The software includes functions for creating various types of charts and graphs and for inserting text in a
variety of fonts. Most systems enable you to import data from a spreadsheet application to create the charts
and graphs. Presentation graphics is often called business graphics. Some of the popular presentation
graphics software is Microsoft PowerPoint, Lotus Freelance Graphics, Harvard Presentation Graphics, etc.
 Imaging
 Image processors or graphics programs enable you to create, edit, manipulate, add special effects,
view, print and save images.
 Paint Programs
A paint program is a graphics program that enables you to draw pictures on the
display screens, which are represented as bit maps (bit-mapped graphics). Most paint programs provide the
tools in the form of icons. By selecting an icon, you can perform functions associated with the tool. In
addition to these tools, paint programs also provide easy ways to draw common shapes such as straight lines,
rectangles, circles, and ovals.
 Draw programs
A draw program is another graphics program that enables you to draw pictures,
then store the image in files, merge them into documents, and print them. Unlike paint programs, which
represent images as bit maps, draw programs use vector graphics, which makes it easy to scale images to
different sizes. In addition, graphics produced with a draw program have no inherent resolution. Rather,
they can be represented at any resolution, which makes them ideal for high-resolution output.
 Image editors
Image editor is a graphics program that provides a variety of special features for
altering bit-mapped images. The difference between image editors and paint programs is not always clear-
cut, but in general image editors are specialized for modifying bit-mapped images, such as scanned
photographs, whereas paint programs are specialized for creating images. In addition to offering a host
filters and image transformation algorithms, image editors also enable you to create and superimpose layers.

WRITE SHORT NOTE ON COMPILER PROCESS

Objective of the compiler is to transform a program written in a high-level programming language
from source code into object code. Programmers write programs in a form called source code. Source code
must go through several steps before it becomes an executable program. The first step is to pass the source
code through a complier, which translates the high level language instructions in to object code. The final
step in producing an executable program, after the complier has produced object code, is to pass the object
code through a linker .The linker combines modules and gives real values to all symbolic addresses. The
process of converting each program statement into machine code is called as interpreter. Object code is not
stored so there is no compilation. When a statement is executed several times, that statement is converted to
machine language, each time it is executed. e.g.: BASIC.

Source Source Source

file file file
 COMPLIER

Object Object Object

file file file

Run LINKER
time Executabl
Librar e
y Program

THE COMPILATION PROCESS

WHAT IS A PROGRAMMING LANGUAGE? WHAT ARE THE PURPOSES AND REQUISITES

OF A PROGRAMMING LANGUAGE?
A language is a system of communication. It usually consists of all the verbal and written
symbols & expression that are used to exchange ideas and information. The communication between two
parties whether they are machines or human beings always needs a common language or terminology. The
language used in the communication of computer instructions is known as the programming language. The
programming language contains the symbols, characters, procedures & syntax that an individual uses in
communicating with the computer and vise-versa.
Purpose of Programming Languages
1. To instruct the system about what to do
2. Accepting input from the user
3. Data Processing
4. Output Storage
5. Retrieval of stored data

Requisites for an Acceptable Programming Language

1. Simplicity – Logical sequence and understandable
2. Readability – Resemble English like language
3. Reliability – Fulfill expectations of users
4. Portability – Acceptable in Different Computers / Platforms
5. Maintainability – Maintain standards and accommodate instructions
6. Performance – Lesser time to perform without mistakes
7. Modifications – Capable of altering instructions

WHAT ARE THE TYPES OF PROGRAMMING LANGUAGES OR EXPLAIN THE DIFFERENT

GENERATIONS OF PROGRAMMING LANGUAGES.
There are five levels / generations of language:
1. Machine Languages / First-generation languages
2. Assembly Languages / Second-generation Languages
3. High level language / Third-generation Languages
 Generation of computer languages

Computer language

1. Machine Languages / First-generation languages

Machine languages are used for having direct communication with the computers and are in the form
of binary digits. The use of binary code model differs from manufacturer to manufacturer. The
programmers should know the machine code to address the data directly and in simple manner. The
machine language is the only language understood by the computer. Instructions are written as strings of
binary 1s and 0s. The programs are executed very fast. Writing programs in machine language is a very
difficult process because for each instruction different codes are used

Advantages of machine language

 Efficiency at run time
 Simplicity of instruction
 The computer understands the language without translation

Disadvantages of machine language

 Difficult to learn
 Time consuming and tedious to write
 Subject to errors.

2. Assembly Languages / Second-generation Languages

To reduce programming complexity and provide some standardization, assembly languages were
developed. Assembly languages, also known as symbolic languages use abbreviations or mnemonic code to
replace the 0s and 1s of machine language. The assembly language program is referred to as a source
program whereas; the machine language program is an object program.
Assembly Machine
Language program Assembler Language program
(Source program) (Object program)
The assembler simply translates each instruction in symbolic language to its machine language
equivalent. They are machine dependent and used mainly for system software.

Advantages
 They are more standardized and easier to use than machine languages.
 They operate very efficiently, although not as efficient as the machine languages
 They are easier to debug because programs locate and identify syntax errors

Disadvantages
 Knowledge of hardware is required
 Programs are still complex
 Machine dependent.

3. High Level Languages

To overcome the drawbacks of low level language high level language like problem oriented/
procedure oriented language were developed. Such programming languages, with an extensive vocabulary
of words and symbols are used to instruct a computer to carry out the necessary procedures, regardless of the
type of machine being used. High level languages –
 Use English words and mathematical notations.
 Follow SYNTAX Rules
 Are translated to the machine code by compilers and interpreters.
 Provide for all operations an integer, numbers, scalar, vectors, characters and strings.
The original high level program is called the source program. The compiled program that is the
machine language program, generated by the compiler after translation is called the object program.
The most important characteristic of a high level language is that it is machine independent. The
programmer need not know the characteristic of the machine

High level Compiler Machine

Language program Language program
(Source program) (Object program)
Here compilers are used to convert the instructions from high level languages to machine readable
form. Instead of compilers, the interpreters may also be used for translating the high level languages into
machine language.

WHAT ARE THE TYPES OF HIGH LEVEL LANGUAGES

Languages are often referred to as generations, the idea being that machine languages were the
first generation and assembly languages were the second generation. High-level languages are sometimes
used to refer all languages above the assembly level. Here we will subdivide high-level languages into three
generations.
1. Procedural-oriented or third generation
2. Problem-oriented or fourth generation
3. Natural or fifth generation

Types of programming languages

1. Procedural-oriented languages
High-level languages are often classified according to whether they solve general problems or
specific problems. General-purpose programming languages are called procedural languages or third
generation languages. They are languages such as Pascal, BASIC, COBOL, and FORTRAN which are
designed to express the logic, the procedure, of a problem. Because of their flexibility, procedural languages
are able to solve a variety of problems.
Advantages over machine and assembly languages
 The program statements resemble English and hence are easier to work with.
 Because of their English-like nature, less time is required to program a problem
 Once coded, programs are easier to understand and to modify
 The programming languages are machine-independent.
Disadvantages compared to machine and assembly languages
 Programs execute more slowly
 The languages use computer resources less efficiently
2. Problem-oriented Languages and Application Generators
Third-generation languages, such as BASIC or Pascal, require you to instruct the computer in
step-by-step fashion. Fourth-generation languages, also known as problem-oriented languages, are high-
level language designed to solve specific problems or develop specific applications by enabling you to
describe what you want rather than step-by-step procedures for getting there.
Fourth-generation languages may be categorized into several kinds of application development tools:
 Personal computer applications software
 Query languages and report generators
 Decision support systems and financial planning languages
 Application generators
Personal computer application software
 Application software for PCs, concerned with here are word processors, spreadsheets, database
managers, business graphics and integrated packages. Learning to use Lotus 1-2-3, dBase or PowerPoint
can help you develop your own applications.
Query languages and report generators
Query languages allow people who are not programmers to search a database using certain
selection commands. Query languages, for example, are used by airline or railway reservations personnel
needing ticket information.
 Report generators are designed for people needing to prepare reports easily. Examples of query
language and report generators include QBE, SQL, HAL, ANSWER / DATABASE,
DATATRIEVE, EASYTRIEVE PLUS, Honeywell PDQ, INQUIRE, INTELLECT, QMF, RPG
III, etc.
Decision support systems and financial planning languages
 Decision support systems are interactive software designed to help managers make decisions.
 Financial planning languages are particular kinds of decision support systems that are
employed for mathematical, statistical and forecasting procedures among other uses.
Some examples of decision support systems and financial planning languages include application
system, command center, Express, FCS, IFPS, Info Center/1, Metaphor, SPSS-X, STRATAGEM, SYSTEM
W, etc.

Application generators
An application generator consists of a software system with numbers of program modules,
preprogrammed for various functions. So that the programmer or user can simply state which function is
needed for a particular application, and the system will select the appropriate modules and run a program to
meet the user’s needs.
DISTINGUISH BETWEEN THIRD-GENERATION LANGUAGES AND FOURTH-GENERATION
LANGUAGES.

Third-generation languages Fourth-generation languages

Intended for use by professional programmers May be used by a non-programming end user
as well as a professional programmer
Requires specification of how to perform tasks Requires specification of what task is to be
performed (system determines how to
perform the task)
All alternatives must be specified. Default alternatives are built in; an end user
need not specify these alternatives
Require large number of procedural Require far fewer instructions
instructions.
Code may be difficult to read, understand and Code is easy to understand and maintain
maintain. because of English-like commands.
Language developed for batch operation. Language developed primarily for on-line
use.
Can be difficult to learn. Easy to learn
Difficult to debug. Easy to debug.
Typically file-oriented Typically database-oriented

3. Natural Languages
Natural languages are still in the developmental stages, but they promise to have profound effect,
particularly in the areas of artificial intelligence and expert systems. Natural languages have two
characteristics:
 They are designed to make the connections that humans have with computers more
natural – more humanlike.
 They are designed to allow the computer to become “smarter” – to actually simulate the
learning process by remembering and improving upon earlier information.

WHAT IS AN OPERATING SYSTEM? HOW DOES IT WORK?

 An operating system manages and coordinates the functions performed by the computer
hardware, including the CPU, input/output devices, secondary storage devices, and communication and
network equipment. Operating systems are the most important program that runs on a computer. Every
general purpose computer must have an operating system to run other programs.
Operating systems perform basic tasks, such as
 Recognizing input from the keyboard,
 Sending output to the display screen,
 Keeping track of files and directories on the disk, and
 Controlling peripheral devices such as disk drives and printers
The operating system software must keep track of each hardware resource, determine who gets
what, determine when the user will have access to the resource, allocate how much of the resource the user
will be given, and terminate access at the end of the use period.
Operating systems vary in complexity from those that support single user microcomputers to
those that handle multi-user mainframes. Their complexity depends on the computer system’s size and
scope, together with the type of performance provided to its users. A single stand-alone microcomputer will
have a relatively simple operating system, whereas a mainframe that supports hundred of users accessing the
system simultaneously will have one that is far more complex.
Purposes of an operating system
The primary purpose of an operating system is –
 To maximize the productivity of a computer system by operating it in the most efficient manner and
minimizing the amount of human intervention required.
 To simplify the job of computer programmers, since it includes programs that perform common
input/output and storage operations and other standard processing functions.
 To accomplish other tasks operating system must be loaded and activated.
This emphasizes that operating systems are the most indispensable component of the software
interface between users and the hardware of their computer systems. Some operating system packages
include a selected number of utility programs, language translator programs (Compilers and Interpreters),
and even some application programs.
Examples of popular microcomputer operating systems are Windows, DOS, OS/2 for PCs
and Mac OS for Apple computers, etc.
Examples of operating systems for minicomputers are UNIX, OS/400, etc. An example of an
operating system for a mainframe is MVS.

EXPLAIN THE DIFFERENT FUNCTIONS OF AN OPERATING SYSTEM.

Even the simplest operating system in a minicomputer or mainframe performs a number of
resource management tasks or functions. These functions include job management, batch processing, on-
line processing, data management, virtual storage, and input/output management.
 Job management
Job management software manages the jobs waiting to be processed. It recognizes the jobs,
identifies their priorities, determines whether the appropriate main memory and secondary storage capability
they require is available, and schedules and finally runs each job at the appropriate moment.
 Batch Processing
System software is available to support the different methods of processing a job. With batch
processing the most basic method, data are accumulated and processed in groups.
 On-line Processing
In on-line processing, data are processed instantaneously. For example, a sales person may need
to find out whether a particular item requested by a customer is in stock for immediate shipment. Most on-
line operating systems have multi-user and multitasking capabilities.
 Data Management
In the process of managing the resources of the computer system, operating system software also
manages the storage and retrieval of data. As the system software handles many of the details associate with
this process, such details are not a primary concern for users or programmers writing application programs.
 Virtual Storage
Operating systems also manages the allocation of main memory to specific jobs. Some operating
systems have a feature called virtual storage. With this software it is possible to increase the capacity of
main memory without actually increasing its size. This is accomplished by breaking a job into sequences
instructions, called pages or segments, and keeping only a few of these in main memory at a time; the CPU
that in fact contains a relatively small memory.
 Input / Output Management
Operating systems also manage the input to and output from a computer system. This applies to
the flow of data among computers, terminals, and other devices such as printers. Application programs use
the operating system extensively to handle input and output devices as needed.
For Large systems, the operating system has even greater responsibilities and powers. It is like
traffic policeman – it makes sure those different programs and users running at the same time do not
interfere with each other. The operating system is also responsible for security, ensuring that unauthorized
users do not access the system.

WHAT ARE THE DIFFERENT TYPES OF OPERATING SYSTEMS?

 Multi-user
Multi-user operating systems allow two or more users to run programs at the same time. Some
operating systems permit hundreds or even thousands of concurrent users. The operating systems of
mainframe and minicomputer are multi-user systems. Examples are MVS, UNIX, etc. Another term for
multi-user is time-sharing.
 Multiprocessing
Multiprocessing refers to a computer system’s ability to support more than one process
(program) at the same time. Multiprocessing operating systems enable several programs to run
concurrently. MVS and UNIX are two of the most widely used multiprocessing systems.

 Multitasking
Multitasking allows more than one program to run concurrently. Multitasking is the ability to
execute more than one task at the same time, a task being a program. Multiprocessing sometimes implies
that more than one CPU is involved. In multitasking, only one CPU is involved, but it switches from one
program to another so quickly that it gives the appearance of executing all of the programs at the same time.
There are two basic types of multitasking:
 Preemptive
 Cooperative
 Multithreading
Multithreading allows different parts of a single program to run concurrently. Multithreading is
the ability of an operating system to execute different parts of a programs, called threads, simultaneously.
 Real-time Operating systems
Real-time operating systems are systems that respond to input immediately. This category
includes operating systems designed substantially for the purpose of controlling and monitoring external
activities with timing constraints. They are used for such tasks as navigation, in which the computer must
react to a steady flow of new information without interruption. Most general-purpose operating systems like
DOS and UNIX are not real-time because they can take a few seconds, or even minutes, to react. Some
examples of real-time operating systems are:
 Basic Real-time Monitor
 BLMX
 BSO / RTOS
 C Executive
 CCP (Communications Control Program)
Operating systems provide a software platform on top of which other programs, called
application programs can run. The applications programs must be written to run on top of a particular
operating system.

WHAT DO YOU MEAN BY COMPUTER NETWORKS

Computer network is a system that links two or more computers for the purpose of exchanging
data among themselves. Each computer in the computer networks is called as nodes and each node
communicates with other nodes. Computer networks facilitate
  Communication among users of different computer systems
 Communication among applications being executed on different computer systems
 Sharing of computer resources and
 Distribution of computer applications among computer systems at different locations.

WHAT ARE THE COMPONENTS OF A NETWORK?

A communications network is any arrangement where a sender transmits a message to a receiver
over a channel consisting of some type of medium. The following are the various components of a network.
 Terminals
Terminals include video display terminals and other end user workstations. Any input / output
device that uses a network to transmit or receive data is a terminal. This includes microcomputers,
telephones, fax machines, etc.
 Telecommunication processors
These are devices, which support data transmission and reception between terminals and
computers. These devices such as modems, multiplexers and front-end processors, perform a variety of
control and support functions in a network. For example, they convert data from digital to analog and back,
code and decode data, and control the accuracy and efficiency of the flow of data between computers and
terminals in a network.
 Telecommunications channels and media
The media over which data are transmitted and received are called telecommunication channels.
Telecommunication channels use combinations of media, such as copper wires, coaxial cables, fiber optic
cables, microwave systems and communication satellite systems to interconnect the other components of a
network.

 Computer
Networks interconnect computer of all sizes and types so that they can carry out their information
processing assignments. For example, a mainframe computer may serve as a host computer for a large
organization’s network, assisted by minicomputers acting as network servers for smaller networks of end
user microcomputer workstations.
 Telecommunication Software
Telecommunication software consists of programs that reside in host computer systems,
communication control computers and end user computers. This controls the telecommunication activities
of the computer systems and manages the functions of networks.

WHAT ARE THE DIFFERENT TYPES OF COMMUNICATION PROCESSORS?

 Communication processors – it resemble computer CPUs in that they have similar
circuitry, have memories, and can be programmed, but their purpose is limited – to enhance data
communications between two points. Communication processors include the following: modems, message
switchers, multiplexers, concentrators and controllers, and front-end processors.
 Modems - The word modem stands for MOdulator / DEModulator. A modem is a device,
which translates data binary code to analog data that can be transmitted over the telephone network. So
when you send a file from your PC to another, it is converted to an analog signal by your modem and
converted back to binary when it arrives at the destination by the modem connected to that computer. A
similar procedure occurs when you send a fax from your PC.
 Message Switchers - A message switcher is a processor that receives data messages from
terminals, determines their destination, and routes them one at a time to the CPU. It distributes the messages
coming from the CPU to the appropriate terminal.
The advantage of message switchers is that it reduces long distance transmission costs, since only
a single line is needed.
 Multiplexers, Concentrators and Controllers - It allows several terminals to use one line to
communicate with a CPU. However, it allows the terminals to send their messages simultaneously. A
multiplexer collects message from various senders, put them in order, and transmits them along a broadband
channel at very high speeds to the receiver.
 A concentrator is essentially a smart multiplexer – it can be programmed, has more
processing capability, and is more flexible than a multiplexer.
  Controllers or cluster controllers, link groups of terminals or other devices to a
communications channel. The controller polls the status of each terminal and transfers data from a terminal
to the host computer when necessary.
Multiplexers, concentrators and controllers are frequently used at terminal sites having heavy
input and output requirements.
 Front-end processors - A front-end processor is located at the site of the CPU or the host
computer and its purpose is to relieve the central computer of some of the communications tasks, leaving the
larger computer free for processing applications programs. Here we can see that communication processing
and data processing equipment are nearly alike.

WHAT DO YOU MEAN BY COMMUNICATIONS MEDIA? WHAT ARE THE DIFFERENT

TYPES OF COMMUNICATIONS MEDIA?
Communications Media
Channels also called communication lines or links are the means by which data is transmitted
between the sending and receiving devices in a network. These include twisted-pair wire, coaxial cables and
fiber optic cables, all of which physically link the devices in a network.
۸ Twisted-Pair Wire
This is the oldest and still most common transmission line and consists of copper wires
twisted into pairs. These lines are used in established communications networks throughout the world for
both voice and data transmission.
۸ Coaxial Cable
Coaxial cable consists of a sturdy copper or aluminum wire wrapped with spacers to
insulate and protect it. The insulation minimizes the interference and distortion of the signals the cable
carries. Groups of coaxial cables may be bundled together in a big cable for ease of installation. These high
quality lines can be placed underground and laid on the floors of lakes and oceans. They allow high-speed
data transmission.
۸ Fiber Optic Cables
Fiber optics can be described as a transmission system employing a light-emitting
source – turned on and off rapidly by electrical impulses – whose emissions are sent through a glass pipe to
a light-sensitive receiver to convert the changing light intensities back into electrical impulses.
۸ Microwave Systems
Terrestrial microwave systems transmit high-speed radio signals in a line-or-sight path
between relay stations spaced approximately 25 to 35 miles apart. Because the waves cannot bend with the
curvature of the earth, they are relayed via antennas usually on top of buildings, towers, hills and mountain
peaks. Microwave transmission consists of high frequency radio waves that travel in straight lines through
the air rather than through wires.
۸ Communications Satellites
Communications satellites in space orbiting 22000 miles above the earth, are also used
as microwave relay stations because they rotate at the precise point and speed above the equator that makes
them appear stationary to microwave transmitter on the ground.

WHAT IS TELECOMMUNICATIONS SOFTWARE AND WHAT ARE ITS FUNCTIONS?

Telecommunication Software
Software is a virtual component of all telecommunications networks. Communications control
software includes programs stored in the host computer as well as programs in the front-end computers and
other communications processors. Telecommunications software packages for large computer networks are
frequently called telecommunication monitors or teleprocessing (TP) monitors.

Functions of telecommunications software

Telecommunication software packages provide a variety of communications support services.
The number and type of terminals, computers, communication processors, and communications activities
involved determine the capabilities of the programs required. The telecommunications software provides
several major functions such as:
 1. Access Control -This function establishes the connections between terminals and computers in a
network. The software works with a communications processor (such as a modem) to connect and
disconnect communications links and establish parameters such as transmission speed, mode, and direction.
2. Transmission control -This function allows computers and terminals to send and receive commands,
messages, data, and programs. Some error checking and correction of data transmissions may also be
provided.
3. Network control -This function manages communications in a network. Software determines
transmission priorities, route messages, polls terminals in the network, and forms waiting lines of
transmission requests.
4. Error control - Error control involves detection and correction of transmission errors. Errors are
usually caused by distortions in the communications channel, such as line noise and power surges.
Communications software and processors control errors in transmission by several methods, including parity
checking.
5. Security control -It protects a communications network from unauthorized access. Access control
software and other types of programs restrict access to data and the computing resources in the network.

WHAT ARE THE DIFFERENT TYPES OF COMPUTER NETWORKS?

There are many different types of networks. However from an end user’s point of view there are
two basic types:
1. Local-area networks (LANs)
The computers are geographically close together (That is, in the same building).
2. Wide-area networks (WANs)
The computers are farther apart and are connected by telephone lines or radio waves.
In addition to these types, the following characteristics are also used to categorize different types of
networks.
Topology – The geometric arrangement of a computer system. Common topologies include a
bus, star, and ring.
Protocol – The protocol defines a common set of rules and signals that computers on the network
use to communicate. One of the most popular protocols for LANs is called Ethernet. Another popular LAN
protocol for PCs is the IBM token-ring network.
Architecture – Networks can be broadly classified as using either peer-to-peer or client / server
architecture. Computers on a network are sometimes called nodes.

Local Area Network (LAN)

LAN is a computer network that spans a relatively small area. Most LANs are confined to a
single building or group of buildings. However, one LAN can be connected to other LANs over any
distance via telephone lines and radio waves. A system of LANs connected in this way is called a wide-area
network (WAN).
There are many different types of LANs – token-ring networks, Ethernets, and ARCnets being
the most common for PCs. Most Apple Macintosh networks are based on Apple’s AppleTalk network
system, which is built into Macintosh computers.
LANs are capable of transmitting data at very fast rates, much faster than data can be transmitted
over a telephone line; but the distances are limited, and there is also a limit on the number of computers that
can be attached to a single LAN.

Wide Area Network (WAN)

A WAN is a computer network that spans a relatively large geographical area. Typically, a
WAN consists of two or more local-area networks (LANs).
Computers connected to a wide-area network are often connected through public
networks, such as the telephone system. They can also be connected through leased lines or satellites. The
largest WAN in existence is the Internet.

WHAT IS A NETWORK TOPOLOGY AND WHAT ARE THE DIFFERENT TYPES OF

NETWORK TOPOLOGIES?
Network Topologies
Topology is the geometric arrangement of the computers in a network. Common topologies
include star, ring and bus.
Star Network
The star network is frequently used to connect one or more small computers or peripheral devices
to a large host computer or CPU. In a time-sharing setup, each terminal receives a fixed amount of the
central CPU’s time, called a time slice. If you are sitting at a terminal and cannot complete your task during
the time slice, the computer will come back to you to allow you to do so.
Access and control of star networks typically is maintained by a polling system. Polling means
that the central computer or communications controller “polls” or asks each device in the network if it has a
message to send and then allows each in turn to transmit data.
Ring Network
The ring network is a local-area network (LAN) whose topology is a ring – can be as simple as a
circle or point-to-point connections of computers at dispersed locations, with no central host computer or
communications controller. That is, all of the nodes are connected in a closed loop. Messages travel around
the ring, with each node reading those messages addressed to it. Each node regenerates messages as they
pass through it.
Access and control of ring networks are typically maintained by a “token-passing” system. A
token-ring network resembles a merry-go-round.
Bus network
Bus networks are similar to ring networks except that the ends are not connected. Access and
control of bus networks are typically maintained by a method called contention, whereby if a line is unused,
a terminal or device can transmit its message at will, but if two or more terminals initiate messages
simultaneously, they must stop and transmit again at different intervals.

WHAT IS NETWORK PROTOCOLS?

A protocol is an agreed-upon format for transmitting data between two devices. The protocol
determines the following:
 The type of error checking to be used.
 Data compression method, if any.
 How the sending device will indicate that it has finished sending a message.
 How the receiving device will indicate that it has received a message.
Some of the popular protocols are TCP / IP, HTTP, FTP, SMTP, POP, Token-ring, Ethernet,
Xmodem, Kermit, MNP, etc.

WHAT ARE THE DIFFERENT TYPES OF NETWORK ARCHITECTURES?

The term architecture can refer to either hardware or software, or a combination of hardware and
software. Network architectures can be broadly classified as using either peer-to-peer or client / server
architecture.

[Link]-to-Peer Architecture
This is a type of network in which each workstation has equivalent capabilities and
responsibilities. This differs from client/server architectures, in which some workstations are dedicated to
serving the others. Peer-to-peer networks are generally simpler and less expensive, but they usually do not
offer the same performance under heavy loads.

2. Client/Server Architecture
This is a network architecture in which each computer on the network is either a client or a
server. Servers are powerful computers dedicated to managing disk drives (file servers), printers (print
servers), or network traffic (network servers). Clients are less powerful PCs or workstations on which users
run applications. Clients rely on servers for resources, such as files, devices, and even processing power.

WHAT IS INTERNET
 Internet is the world’s largest computer network, the network of networks, scattered all over the
world. Its goal was to create a method for widely separated computers to transfer data efficiently.
Internet is group of two or more networks that are:
 Interconnected physically
 Capable of communicating and sharing data with each other
 Able to act together as a single network
Machines on one network can communicate with machines on other networks, and send data,
files, and other information back and forth.
The Internet with a capital “I” is the network of networks, which either uses the TCP/IP protocol or
interacts with TCP/IP networks via gateways.
The Internet offers access to data, graphics, sound, software, text and people through a variety of
services and tools for communication and data exchange:
 Remote login (telnet)
 File transfer (ftp)
 Electronic mail (e-mail)
 News (USENET/ network news)
 Hypertext (WWW)

HOW DOES THE INTERNET WORK?

There are three obvious reasons. Internet is the cheapest and fastest means to
 Get information
 Provide information
 Compile information
Getting information
Gopher was used to present material in a logical fashion for easy availability. WWW gives
information about people, product, organizations, research data, electronic version of the printed media, etc.
Provide information
Internet is the best and most inexpensive way to let the people know details about something. For an
organization; home page gives the details about products and services.
 Publishing – includes full text articles, reports, illustrated articles, abstract, computer programs
and demonstrations.
 Extension - in which some of the delays associated with the printed media may be reduced.
 Teaching – includes both distance learning and assistance for students.
Compile information
It helps to get sophisticated information from the web. Web generally provides ideal platform and
opportunity, helps to conduct surveys band get opinion of the people across the world.

HOW WILL YOU GET ACCESS TO THE INTERNET? OR WHAT ARE THE WAYS USED FOR
INTERNET ACCESS?
There are two basic ways to connect with internet
 Dialing into an Internet service provider (ISP) using telephone line & MODEM is called as
Dial up connection.
 With a direct connection to an ISP.
1) Dial up connection
With a dial-up account, use modem to convert computer bits and bytes into modulated signal that the
phone lines can transmit. These signals are received by a MODEM at ISP and demodulated into bits and
bytes for their computer. Dial up access is either by the way of SLIP (Serial Line Internet Protocol) or PPP
(Point to Point Protocol).
Modem is short for “modulator-demodulator” for dial-up connection we need:
 An account with an Internet access provider. The account can be either TCP/IP or shell.
(VSNL, Satyam Online)
 A telephone connection.
 A computer with serial port or an expansion slot.
 A MODEM (Internal / External).
 A communication software, browser, Email software (or terminal emulation).
2) Direct connection
We have a fixed cable or a dedicated phone line to the ISP. Often the dedicated line is an ISDN line
which is a higher-speed version of the standard phone line, but actually requires two phone lines. ISDN can
handle more than 56,600bps.
One can also get dedicated lines called a T-1 or T-3.

LIST SOME OF THE ACTIVITIES THAT YOU CAN DO ON THE INTERNET.

Internet Basics
Web browsers are mainly used to access pages of the www. By clicking hypertext links on a page it
is possible to jump from one Internet site to another. Hypertext links are usually highlighted or different
coloured text, images, or icons.
If the mouse pointer changes its shape to that of a hand then it is a hypertext link. This jumping
from one site to another using the hypertext links is called “net surfing” or “web browsing”.

The following activities are done with the help of the web browser.
 Visit web sites.  Do On-line shopping.
 Send and receive E mail.  Post your resumes on the
 Read and post articles in internet.
newsgroup.  Creating your own websites.
 Download files to your personal  Creating an email –id and
computer. account.
 Play games with other on-line.  Finding person’s details.
 Chat with other user online.  Sending flowers or gifts to
 Search the internet for others.
information.

WHAT ARE THE DIFFERENT PROTOCOLS AVAILABLE ON THE INTERNET?

Internet protocols
The internet protocol is the basic software used to control an internet. This protocol specifies how
gateway machines route information form sending computer to the recipient computer. The following are
the commonly used protocols in the internet
 Transmission Control Protocol/ Internet Protocol (TCP/IP).
 File Transfer Protocol (FTP).
 Hypertext Transfer Protocol (HTTP).
 Terminal Emulation (TELNET).
 GOPHER.
 Wide Area Information Service (WAIS).
TCP/IP (Transmission Control Protocol/ Internet Protocol)
It is actually a collection of protocols or rules, that govern the way data travels from one machine to
another across network. The Internet is based on TCP/IP. TCP/IP has two major components: TCP and IP.
IP component does the following:
 Envelopes and addresses the data.
 Envelopes network to read the envelope and forward the data to its destination.
 Defines how much data can fit in a single envelope (a packet).
Ex: The relationship between data, IP and networks is often compared to the relationship between a letter, its
addressed envelope and the postal system.
(IP Vs Postal system)

10011100011
10111000011
IP
100111000111011100001
 
Data in addressed package 
 1001110001
1101110000
11 
Letters in addressed envelope
 Postal system
A TCP component does the following
 Breaks data into packets that the network can handle efficiently
 Verifies whether all the packets have arrived at their destination.
 Reassembles the data
FTP (File Transfer Protocol)
 It is part of the TCP/IP protocol suite.
 It is the protocol or set of rules, which enables file to be transferred between computers.
 Files that can be transferred are stored on computers called FTP servers.

Steps to use ftp are

1. Connect to the FTP server.
2. Navigate the file structure to find the file you want.
3. Transfer the file.

FTP

Wide varieties of files that are available through FTP are

 Shareware: software that can use free for a trial period but they pay a fee for it later.
 Freeware: completely free software e.g.: clipart, fonts and games.
 Upgrades and patches: upgrades to current software and fixes for software problem.
 Documents: e.g. include research paper, articles and Internet documents.
Files on FTP servers are often compressed. Compression means decreasing the file size. It is
a good idea to have current virus checking software before file are transferred to computer.

HTTP (Hyper Text Transfer Protocol)

 It is a set of rules or protocols that govern the transfer of hypertext between two ort more computers.
 It is specially coded using a standard system called Hyper Text Markup Language(HTML).
 HTML codes are used to create links.
 These links may be textual or graphic.
 It links the user to another resource such as other HTML documents, text files, graphics, animation
and sound.
 Links will be blue in colour and will be underlined. When cursor moves over that link the pointer
changes its shape.
 HTTP also provides access to other Internet Protocols like FTP, SMTP, WAIS, TELNET, GOPHER,
etc
[Link]
[Link]

[Link]
Client Server
HTTP is based on client/server principles; it allows two computers to share request and response.

TELNET (Terminal Emulation )

 It is a protocol or set of rules
 Enables one computer to connect to another computer. This process is referred to as remote login.
 When the user types command, they are executed on the remote computer. The user’s monitor
displays what is taking place on the remote computer during telnet session.
 Many resources, such as library catalogs, are available via telnet without an account and password.
 It allows the user to access Internet resources on other computers around the world.
 Local computer

Telnet Host (remote computer)

WRITE SHORT NOTES ON GOPHER AND WAIS. OR WHAT ARE THE DIFFERENCE
BETWEEN GOPHER AND WAIS?
GOPHER
 It is a protocol designed to search, retrieve and display documents from remote sites on the Internet.
 Information accessible via Gopher is stored on many computers all over the Internet. These
computers are called Gopher servers.
 Virtually any popular computer can be used as a server. Servers also contain reference to other
servers.
 Turbo gopher is a gopher client application.
 Users interact with gopher via a hierarchy of menus and can use full-text searching capabilities of
gopher to identify desired documents.
 Gopher was created as a piece of software to utilize some of the services that were becoming
available on Internet.
 It was designed to work with a variety of different internet stand alone services.
Gopher can work with the following Internet tools or systems:
- Search local WAIS indices, query remote WAIS servers and funnel the results to gopher clients.
- Query remote FTP sites and funnel the results to gopher clients.
- Be queried by WWW clients either using built in gopher querying / using native HTTP querying.
WAIS
 Stands for Wide Area Information Services.
 It is an Internet search tool that is based on Z39.50 standard.
 It has the capability of simultaneously searching in more than one data base.
WAIS server
Query
Client
Results

User send query Server process the query

and read the results and send back the result

HOW ARE ADDRESSES DEFINED ON THE INTERNET?

Internet addressing
It is a systematic way to identify people, computers and internet resources. The term “address” is
used loosely. Address can mean many different things from an electronic mail address to a URL.
A) IP address
An IP address is an identifier for a particular machine on a particular network; it is part of a scheme
to identify computers on the Internet.
An IP address consists of IP numbers and Internet addresses. It also consists of four sections
separated by periods. Each section contains a number ranging from 0 to 255.
E.g.: [Link].
These four sections represent both the machine itself or host, and the network that host is on.
Common Characteristics
 IP addresses are unique.
 No two machines can have the same IP number
 IP addresses are also global and standardized.
 All machines connected to the Internet agree to use the same scheme for establishing an address.
B) Domain name
 It is a way to identify and locate computers connected to Internet.
  It always contains two or more components separated by periods called “dots”.
For Example: [Link], [Link], [Link]

Top-level domain name – Describes the type of organization holding that name.
Major categories for top-level domain names are
 .Com-commercial entities
 .Edu- educational institutions
 .Net – organization directly involved in internet operations
 .Org – miscellaneous organization
 .Gov- united states federal government entities
 .Mil- united states military
 .Country code- a two letter abbreviation for a particular country.
 Ex: in, uk, fr etc.
 IP address takes the form of 4 numbers each one between 0 to 255, separated by periods.
C) Electronic Mail addresses
Electronic mail or e-mail allows information to be sent between computers and people on the
Internet. It is the most widely used Internet resource.
Basic Structure of an e-mail address is
Username @ [Link]-level- domain
For example: 1. alcon@[Link]
2. alexis@[Link]
An e-mail address is read from left to right.
D) Uniform Resource Locator (URL)
 Identifies a particular Internet resource.
For example web pages, a gopher server, a library catalog, an image or a text file.
 Every resource available via the World Wide Web has a unique URL.
 It consists of letters, numbers, and punctuation.
 Basic structure of a URL is hierarchical, and the hierarchy moves from left to right.
Protocol://[Link]:port/directory/filename
Examples
 [Link]
 gopher://[Link]/
 [Link]

DESCRIBE WORLD WIDE WEB. HOW IS IT DIFFERENT FROM THE INTERNET?

World Wide Web (WWW)
During the 1980 Tim Burners Lee developed a programming language called Hypertext Markup
Language (HTML) on which the web is based.
Early web pages contained only text, the web pages now contain pictures and other multimedia
elements in addition to text.
WWW is interactive, because it is easy to use, and because it combines graphics, text, sound, and
animation into a rich communication medium.
One of the major differences between a web page and the conventional media is that the former is
interactive. The WWW is the graphical Internet Service that provides a network of interactive documents
and the software to access them.
It is based on documents called pages that combine text, pictures, forms, sound, animation and
hypertext links called hyperlinks.
The World Wide Web, also referred to as the WWW or W3 or simply “the web” is the universe of
information available via hypertext transfer protocol (HTTP)
The World Wide Web and HTTP:
 Allow you to create “links” from one piece of information to another.
 Can incorporate references to sounds, graphics, movies etc.
 Communicate with other Internet protocols such as FTP, Gopher and Telnet.
WRITE SHORT NOTES ON WEB PAGES.
A web page is a single unit of information often called a document that is available via the World
Wide Web (WWW). A web page is created using HTML. A web page can come in different varieties. They
contain static information such as simple text and pages like highly colorful, containing animation sounds
and interactive elements. It also helps to download software application, do shopping on-line, chat and to
play games online.
WHAT IS HTML AND WHAT IS ITS IMPORTANCE?
 HTML stands for Hypertext Markup language. HTML consists of standardized codes or tags
that are used to define the structure of information on web page.
 It enables web pages to have many features including bold text, italic text, headings,
paragraph breaks and numbered or bulleted lists.
 HTML is a way of defining the formats of text in a web page.
 HTML is a sub language of SGML, or Standard Generalized Markup Language.
 SGML is a system that defines and standardizes the structure of documents.
 In HTML, text is marked as a heading, sub-heading, numbered list, bold, italic etc.
WHAT ARE THE HTML TAGS AND WHERE ARE THEY USED?
HTML Tags
HTML tags are used to define areas of a document as having certain characteristics. It usually
consists of a code in between two “wickets”. These codes are called container tags because the formatting
described by the tag affects only the text contained between the tags.
Some basic tags are
 <I> and </I> are used to indicate italics.
 <img src =”path”> used to place an image in a document file
 <p> used to create a paragraph break.
 <B> and </B> to indicate an area as bold.
 <U> and </U> to indicate an area as underlined.
 <H1> and </H1> are used to define heading levels. (h1 to h6).
 <UL> and </UL> indicate unordered list.
 <OL> and </OL> indicate ordered list.
WHAT IS A BROWSER AND HOW DOES IT WORK?
A browser is a piece of software that acts as an interface between the user and the inner-workings of
the Internet. Browsers are also referred to as web clients, or universal clients, because in the client/server
model, the browser functions as the client program.
The browser
 Contacts a web server and sends a request for information.
 Receives the information and then display it on the user’s computer.
Two types
Graphical browser allows the user to see more or what the WWW has to offer such as graphics,
photographs and multimedia.
Text-based browser shows the user only the textual matter. Graphic element are not displayed and
hypertext links are accessed by using the keyboard
Examples of some common browsers are:
Netscape Navigator Amaya
Microsoft Internet Explorer HotJava
Mosaic Lynx (text-based)
Opera
Web browsing
“Internet browsing” or “net surfing” is often called, is the process of visiting different web sites on
the Internet hosted by various companies, organizations, educational institutions, magazines, individuals et.
Searching the web
WWW helps to publish information, surfing is an unstructured browsing for finding information on
the web.
 A number of new tools have been developed that enable information published on the web to be
searched and discovered more effectively.
Using web focus on two interdependent approaches: browsing through subject trees and hierarchies
and keyword searching using search engines.
There are two main types of search tools:
1. web indexes [Link] engines.

WHAT ARE WEB INDEXES AND SEARCH ENGINES?

Web index
 It is designed to assist users in locating information on the www. They are also referred to as catalogs or
directories. A web index collects and organizes resources available via www. There are a number of
web index available.
 Index may present information alphabetically; others may take a topical approach.
 Topical indexes often present their resources in a hierarchical arrangement, moving from general to
more specific.
 Web index use hypertext links to present their list of resources, which facilitates browsing.
 Most web indexes not only allow users to identify a particular resource of internet, but also actually link
them directly to the resource from the index.
 No single index can contain all possible links to every resource. Web indexes can include hundreds,
even thousands of resources. Some of the popular web indexes are:
 Yahoo  Apollo
 Magellan
Search engine
 It is an interactive tool to help people to locate information available via the www.
 It is actually a database that contains references to thousands of resources.
 It provides an interface between the user and the underlying database.
 It use “fill-out” forms as an interface, and support complex queries.
 It also includes instructions and tips to search the database more effectively.
 It uses hypertext, to link directly to resources listed in the result display.
 Some of the popular search engines are:
 AltaVista  Lycos
 Excite  Yahoo
WHAT ARE META-SEARCH ENGINES AND HOW ARE THEY DIFFERENT FROM NORMAL
SEARCH ENGINES?
A web Meta searcher is a tool helps the user to locate information available via the www.
It provides a single interface that enables users to search many different search engines, indexes and
databases simultaneously.
Meta searchers differ from other search engines and indexes in the following:
1. Single search engines and indexes provide a collection, or database of resources that can be
queried.
2. Meta-searchers do not provide a database. They provide a service that sends a single query to
multiple databases.

A B
A Query B
Query
Query
C

A query being sent to several search engines Query

Examples Working of a Meta search engine

 All-in-one search
 C/net
 Cyberlands web
 Eureka
 Savvy search

WHAT IS IRC(Internet Relay Chat) AND HOW DOES IT WORK?

Internet Chat
 It lets to communicate with people from all over the world, in real-time.
 Number of ways to chat include:
 Number of sites on the web.
 Use customized chat facilities
 Connect to telnet services devoted to chat.
 Also use client software to access one of the networks that host IRC.
Internet Relay Chat (IRC)
 It is a multi-user chat system that allows many people to communicate across the Internet.
 Developed by Jarkko Oikarinen in 1988
 Chats take place on channels, which are the virtual locations on IRC networks where users meet to talk to
one another.
 Channels have different modes, most channels are public, but talk on a private or secret channel.
 To take part the needs are
 Run a client program on pc while connected to the Internet
 IRC is organized in networks.
 Each network consists of a series of servers that constantly relay chat back and forth among
themselves.
Some of the IRC programs – MIRC, WSIRC, PIRCH and VIRC
Commands used
 /help  get the list of all commands.
 /list  view all available channel.
 /join channel  join a channel.
 /quit  quit from the IRC server.
  /leave channel  leave a channel.
Chatting on web
There are lots of sites to chat. Some sites provide links to hundreds of chat servers. Web based chats
are more colorful than the IRC. Some sites include images, sounds with the given messages.
For Example: Funcity chat site, The globe, Talkcity
Also try [Link] which has over 100 links to other chat sites on the web, including chat
related groups.
WHAT IS AN E-MAIL OR ELECTRONIC MAIL
E-mail is an electronic message sent from one computer to another. Each computer reads the e-mail
address and routes it to another computer until it eventually reaches its destination.
 With the use of Multipurpose Internet Mail Extension (MIME) one can send formatted documents,
photos, and video files as attachments.
 It is also possible to interrupt an e-mail on its way, read it and then send it as it were untouched.
There is also a way of protecting the contents by using the technique like encryption.
 E-mail is delivered much faster than the conventional mail.
HOW DOES AN E-MAIL WORK?
Once the mail is addressed and sent, it gets encoded by a modem and is sent down through the phone
line as an analog signal. The e-mail message arrives at the service provider’s server. If it recognizes the e-mail
address as valid, the mail will be sent. The mail is sent via the Internet.
The mail will be received by the recipient’s provider and is sent to the provider’s mail server, where it
will be delivered to the recipient’s mailbox and it will remain there until the recipient next connects to the
Internet. Finally, the recipient’s modem and computer decode the data, and user can read the-mail message.
B D

 C 
A E
How e-mail works
WHAT IS THE STRUCTURE OF AN E-MAIL ADDRESS?
E-mail allows information to be sent between computers and people on the Internet. It is the most
widely used Internet resource. E-mail can be sent to one or more e-mail [Link] e-mail address identifies
a person and the computer for purposes of exchanging mail messages. The basic structure of an email address
is:
username@[Link]-level-domain
Example: (read from left to right)
 ransingh@[Link]
 vinesharma@[Link]

HOW WILL YOU COMPOSE, REPLY AND FORWARD AN E-MAIL MESSAGE? WHAT ARE
THE ADVANTAGES OF USING ADDRESS BOOK, SIGNATURE AND FILE ATTACHMENT
FACILITY?
Mailing Basics
 To compose an e-mail message, click on the ‘Compose new message’ button on the tool bar. You
will get an empty mail form, which will have the following parts:
 To: Enter the recipient’s mail id
 Cc: Enter mail id, to whom the copy of the message is sent
 Subject: Brief discussion about the message
 Body: Actual message

Address Book
It is a place where one can store information about the people with whom the person correspond.
Advantage is no need to key-in again. This is also helps to add new addresses to it, and can create groups.
Signature
It is used to store the information that the user want to attach at the end of the message as signature.
Then configure the system in such a way that all the out-going messages will have the signature at the end of
the message.
File Attachments
It helps to attach any file to a mail. It is a good idea to compress the file that is attached using utilities
like pkzip, which will reduce the file size.
Setting priority
The usual priority value will be “low”, “normal” and “high”. If the mail requires immediate attention
to the recipient set the priority as “high”. This type of messages will be marked in red to indicate that it needs
immediate attention. The default priority is ‘normal’.
Replying and Forwarding E-Mail Messages
There is no need to type in the address or the subject to reply a person’s mail. Two options for
replying to a mail are
 “Reply to Author”
 “Reply to All”
The difference between these two is that, in the first case, the reply mail will be sent only to the person
who had sent the mail to recipient. In the second case, one persons reply will be sent to all the persons, to
whom the copy of the original mail was sent.
The difference between replying and forwarding is that reply to the person who had sent the mail, but
can forward a message to anybody.

WHAT ARE THE E-MAIL ETHICS?

 Use everyday language, vary sentence length.
 No one likes facing a long unbroken block of text characters.
 Avoid mistakes in the typed message.
 Use some compression utility for attachments.
 Do it during non-peak hours, when will the internet connect immediately.
 Compose the message off-line, Use address book to store mail-Ids.
 Be brief. This helps to save bandwidth and also cuts down the eyestrain.
 Avoid “Urgent” or “priority” unless it really is.
 Avoid using all capital letters. It is hard to read.
 Check the mail regularly.

BRIEFLY DISCUSS ABOUT THE INTERNET CODE OF CONDUCT.

Mailing Lists, Newsgroups and bulletin boards
 Post within the forum’s topic.
  Avoid redundant, empty or stupid postings.
 Respect the opinions of other participants.
 Don’t use expressions.
Privacy
 Do not invade the personal privacy of other users.
 Do not forward e-mail without permission.
 Do not deliberately break into the computer systems.
Security
 System break-ins or aiding others to break into systems is illegal.
 Getting passwords or other access information fraudulently is unacceptable.

WHAT IS SPAMMING AND HOW CAN YOU AVOID IT?

Separating the messages from the hundreds of unwanted mails is a daunting task. This process called
spamming. A couple of tricks can also help,
 When the sender of unsolicited e-mail offers to remove from a list, don’t feel for it. This just
confirms that the e-mail account is active, and may actually receive more spam.
 Send a message to ISP or on-line service telling it that a received unsolicited mail.

WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF EMAIL?

Advantages of Email
 Save time and money, global communication is easy and fast.
 24 hours access per day, we can work at home.
Disadvantages of Email
 It has created an information overload
 The very existence of electronic communication has perpetuated the myth that it will lead to
better communication, but it is the individual using the technology that makes the
communications better or worse.
 It can become a distraction and can prevent from doing any productive work.

UNIT – II completed

UNIT – III
INTRODUCTION
Accountancy is the advanced form of book-keeping and human beings do the book-keeping work.
Human effort is needed for the preparation of Journal, Ledger, Trial Balance, Profit and Loss Account and
Balance sheet. Various statements such as cost sheet, fund flow, cash flow and bank reconciliation statements
are prepared manually. To improve efficiency in accounting system and to ensure accuracy in transactions
and posting, computerized accounting system has been introduced.
Tally was developed by Tally Solutions Private limited, 1986. Tally is today India’s leading financial
accounting software and arguably India’s most successful software’s product. In fact, a Tally solution was the
world first to introduce the no code concept in accounting software.
WRITE SHORT NOTES ON TALLY AND STATE THE FEATURES OF TALLY.
Tally is a financial accounting software package. It is very popular than other accounting software
packages like Ex-NGN, Wings etc. Tally is used to store and maintain daily business transactions like
purchase, sales, receipts, payments, purchase returns, sales returns, deposits, bank transactions, withdraw,
money transfer etc.

Features of tally
The salient features of tally are as follows
 Tally has advanced features in complete Book-keeping, Single & Double entry method, integrated
ledgers, Receivables and payables, final statements etc.
 Cash management, Stock / Inventory management, Remote data management is simple to use.
 Invoicing, Billing Materials, Multiples Warehouses, Job/Cost/Profit centers have value added
features.
 It is flexible to use Multi-Currency accounting, multiple companies, Group consolidation etc.
 Query based reporting can be done in tally for final statements of reports.
 Tally shares data through ODBC (Open Data Base Connectivity) to share database with other
programs.
 To overcome difficulties, you have always On-line Help interactive in Tally.
 Tally provides user-definable security for the users
 Cash flow, Fund flow & Ratio analysis are very flexible to use in Tally.
 Cheque printing, printing financial statements of reports are easily done in Tally.
 Inventory control is flexible to use in Tally. Maintenance of stock items, stock groups, godowns,
ordering, cancellation of materials, stock summary etc. can be done.
 Interest calculation, Percentage calculation, Mathematical calculation etc. can be done in calculator
area of the tally.
 Auditing of reports is also done in Tally Audit. VAT, TDS and service tax are introduced in Tally.

HOW TO START TALLY? AND EXPLAIN ABOUT THE ACCOUNTING FEATURES AND
INVENTORY FEATURES OF TALLY.
Tally can be started in any of the following ways
1. Double click the tally icon on desktop
2. select run from start menu and enter the command
 Type the drive and path name and then executable file.
3. At start menu select program tally 9

Accounting features
 Maintain Bill-wise details
It shows bill wise outstanding and compute bill wise over due interest. It tracks
transactions according to bill references. It is mainly required in
party accounts. To require bill wise break up then enable the option
maintain bill wise details.
 Maintain Cost centre
It is a unit of an organization to which
transactions can be allocated. When only costs or expenses are
allocated to these units, they are referred to as cost centre. Tally
gives the cost centre break up of each transaction as well as details
of transactions for each cost centre.
 Use reversing Journals and optional vouchers
It is a non accounting voucher. Reversing
journals are special journals that are used in interim reporting where
the accruals are required to be reported. They exist only up to a
specified upper limit value. They are automatically reversed after a
particular date of use.
  Use debit notes and credit notes
Debit notes are used for purchase returns and credit notes used for sales returns. To
enable this, select yes to activate debit note and credit note vouchers.
 Activate Interest Calculation
Interest can be calculated on all outstanding balances, whether debit or credit .Tally
gives the capability to obtain interest implications on both .To activate this feature for the company records,
select ‘Yes’ for the option Activate interest calculation.
 Income/Expense statement instead of P&L account
For non trading accounts such as accounts for non profit organizations, it require income and
expenditure statement instead of profit and loss account by selecting ‘yes’.

Inventory features
 Maintain Stock categories
It can be created according to requirements and classify the stock items in to appropriate stock
categories
 Maintain batch wise details
If require any item batch/lot wise details then this to be selected.
 Set expiry dates for batches
If require to maintain expiry dates for the batches, then this option to be selected. For many industries,
this is a statutory requirement.
 Maintain Multiple Godown
If there is more than one godown and godown wise details are required then this option can be
enabled. If selected no then godown option will be activated.
 Use tracking numbers
Tracking number provides a link between two transaction documents. It also links stock items with
corresponding accounting entries and tracks the links subsequently.
 Use rejection notes
Rejection In for the goods returned by buyers and rejection out for the goods returned to the suppliers
or if to record the movement of goods without accounting documents, responds with yes to this option.
Rejection In under F8 and rejection out in F9 under voucher entry.
 Use different ‘Actual and Billed Quantity’
If billing quantity is different from the actual quantity then set this option as yes. It will update stock
and billed quantity which used to compute invoice.
 Track additional costs of purchase
If necessary to track effective purchase cost which includes basic material cost and additional cost of
purchase like excise duty, sales tax, freight, carriage inwards etc., set this option to yes.

COMPANY CREATION
WHAT ARE THE PROCEDURES FOR CREATION OF A COMPANY?
To create the company select create company option from company information menu that brings
company creation screen.

WHAT ARE THE COMPONENTS OF COMPANY CREATION SCREEN?

 The company creation screen is divided
into two sections. In top section the
information related to the company and the
bottom section information related to base
currency in which accounts of the company
are maintained.
Top section consists of the following
information
 Directory
 Name of the company
 Mailing name of the company
 Address of the company
 E-mail address
 Income tax number
 Local sales tax number
 Inter-state sales tax number
 Currency symbol
 Maintain
 Financial year
 Books beginning from
 Tally vault password & security
control

Bottom section consists of the following information.

 Base currency symbol
 Formal name
 Number of decimals places
 Symbol for decimal portion
 To enable amounts in million
 To enable decimal places for printing amounts in words

WHAT ARE THE PROCEDURES FOR -

[Link] a company?, [Link] company details?,
[Link] a company?, [Link] company?
Selecting a Company (F1)
From the Gateway of Tally, press F1 key or you can also
click Select Company in the Button panel.
 Gateway of Tally F1
To get the list of companies in any other directory press back space and enter the required drive and the
path which would list all companies in the directory. Use up and down arrow keys and press enter on reaching
the highlighted company.

Alteration of company
 From the Gateway of tally, press Alt+F3 keys to involve the Company Info.
 In Company Info, select Alter option.
Here, select the company whose information is to be altered, from the list of companies pop up menu.
This brings up the Company Alteration screen. Directory and Tally vault Password fields are not displayed
and cannot be altered. In order to create New Year books, do not change the financial year from date, as this
will render previous year book’s data unusable.
Deleting a company
If any particular company is no longer period required, it can be deleted. The following are the paths for
deleting a company:
Path 1:
 From the Gateway of tally, press Alt+F3 keys to involve the Company Info.
  In Company Info, select Alter option.
 Here, use the Alt +D key and tally displays the delete? Yes or no message.
 By pressing the Y or Enter key or clicking on yes, tally displays another message Are you sure? Yes
or No. By answering this message, you can delete the company.
Path 2: Access the drive in which Tally is stored. Open Tally folder --- Open Data folder--- and select the
folder number in which the company details are stored and use the Delete key and click on Yes to confirm
deletion.
Shut a company
Following are the ways in which a company can be shut:
Path 1:
 From the Gateway of tally, press Alt+F3 keys to involve the Company Info.
 In Company Info, select Shut option.
 Then, select the company in the List of Selected companies to shut. Then press the Enter key
in the highlighted company to shut.

Path 2: From Gateway of Tally, use the Alt+F1: Shut Company key. If there is only one company
loaded, that company is automatically shut. If there is more than one company then tally displays the shut
company screen.

WHAT ARE USES OF COMPANY INFO MENU?

To view the company information menu press Alt + F3. Through the company information menu
 A new company can be created without closing Tally.
 It saves a lot of time
 It is possible to Select, Shut, Create, Alter companies and split the company’s data
 To make alteration of the company’s name ,etc., select the option ‘Alter’

WHAT ARE THE PROCEDURES FOR THE DISPLAY OF TRIAL BALANCE, PROFIT & LOSS
ACCOUNT AND BALANCE SHEET?
Trial Balance
 Trial Balance is a statement containing the various ledger balances on a particular date.
 Trial Balance is a statement prepared periodically to check the arithmetical accuracy of entries
made.
 Using tally, an entry cannot be completed, if the total of debits and credit do not match.
 Hence, a difference in debit and credit balances can arise only with respect to opening balances
entered for ledger accounts In case any such difference exists it is shown in the trial balance.
To display Trial balance
Follow the below steps to display the trial balance in tally:
 Select Display option in the Gateway of Tally.
 Select Trial Balance in the Display menu.
 Press Alt+F1 keys to see the detailed Trial Balance.
 <F4: Group>: this key can be used to select an individual group from the list of groups pop up
menu.
 <F5: Ledger wise>: this key toggles with <F5: Grouped >key. This key can be used to view ledger
accounts falling under various groups.
 <F7: Vouchers>: Select any particular group and view its Group Summary screen, by using the
enter key. Here, use this key to view the group vouchers screen for the selected group.
Profit and Loss account
Profit and Loss account considers all such expenses & incomes and also gives the net profit made or loss
suffered by a business during a particular period. The profit and loss account in tally is updated instantly with
every transaction voucher that is entered and saved. No special processing is required to produce a profit and
loss account.
To display Profit and loss account
Follow the below steps to display the Profit and loss account in tally:
  Select Profit & Loss A/c in the Gateway of Tally.
 Press Alt+F1 keys to see the detailed Profit & Loss A/c.
Balance Sheet
Balance sheet is a statement which shows the financial position of an entity as on a particular date. It
shows the ‘assets’ and liabilities under various sub headings such as ‘Fixed Assets’, ‘Current Assets’, Share
capital, etc.
To display Balance Sheet
Follow the below steps to display the Balance Sheet in tally:
 Select Balance Sheet in the Gateway of Tally.
 Press Alt+F1 keys to see the detailed Profit & Loss A/c.

HOW TO VIEW THE ACCOUNTS INFO MENU? DISCUSS ABOUT THE DIFFERENT OPTIONS
LOCATED IN THE ACCOUNTS INFO MENU.
ACCOUNTS INFORMATION:
 The Accounts info menu contains submenus like Groups, Ledgers and Voucher types, and so on.
Groups
A group can be defined as a collection of ledgers of the same nature of transaction. Tally comes with a
set of 28 Pre-defined groups. Of these, 15 are primary groups and 13 are sub-groups. Out of 15 primary
groups, 9 primary groups appear in the balance sheet which is of capital nature and 6 primary groups appear
in profit and loss account which is revenue in nature. Further all sub groups are capital nature and appear in
the balance sheet under the 9 primary groups

EXPLAIN THE DIFFERENT TYPES OF PRIMARY GROUPS AND SUBGROUPS AVAILABLE IN

TALLY.
Primary groups (15)
Primary groups have been created on the basis of basic accounting principles. Ledger accounts can be
created based on these groups and some of the common errors made in group/ledger creation. These errors in
groups /ledger creation should be avoided to have a meaningful chart of accounts.

Balance sheet groups (9)

1. Capital account: ledgers of equity share capital, preference share capital, Partners Capital A/c etc.,
can be created under this group.
 a. Reserve &Surplus: capital redemption Reserve, Securities Premium, general Reserve, Capital
reserve, etc.
2. Current Asset: Ledger accounts which do not fall under the sub groups of this group can be directly
created.
a. Bank Accounts: Savings accounts, bank current a/c, etc.
b. Cash in hand: When a company is created, it creates automatically one cash account under this
group. Petty cash, factory cash, etc.
c. Deposits: fixed deposits, security deposits and other deposits.
d. Loans and advances (asset): All loans given by the company and advances of non trading nature
are classified .Salary advances, housing loans, vehicle loans, etc. under this group .
e. Stock in hand :work in progress, raw materials and finished goods
f. Sundry debtors: Customer to whom goods are sold on credit.
3. Current liabilities: outstanding liabilities etc.
a. Duties &Taxes: Sales tax, Local Sales tax, VAT, CENVAT, excise ,Customs, TDS, TCS, Service
tax, Fringe benefits tax, etc.,
b. Provisions: Provision for taxation, proposed dividend ,Provision for unexpired liabilities, etc.,
c. Sundry creditors: suppliers to whom goods are purchased on credit
4. Fixed assets: good will, land and building, plant and Machinery, Furniture and fittings, Vehicles etc.
5. Investments: investment in shares, debentures, bonds, [Link], etc.
6. Loans (liability): ledger which does not fall under the sub groups of this group, can be created
directly under this group.
a. Bank OD: Bank over draft A/cs
b. Secured loans: Long and medium loans which are obtained against security of the company
assets. Such as Debentures, term loans etc.
[Link] loans: fixed deposits from public, loan from partners, loans from directors, etc.,
7. Suspense account: It is maintained to keep track of money paid and /or received, the nature of which
is not known.
8. Miscellaneous Expenses: Pre incorporation expense, preliminary expense, discount on issue of
debentures, shares, etc.
9. Branch /Divisions: ledger accounts relating to branches, divisions, companies under the same
management.
P&L Groups (6)
1. Sales Accounts: A company sales come under this group like sales account like
computer sales, cement sales, car sales, etc.
2. Purchase accounts: A company purchase come under this group like Purchase
Account.
3. Direct incomes: Freight outwards, after sales service, fee for professional
service, consultation fees, drafting charges, plan preparation fee, etc.
4. Indirect incomes: rent received ,dividend income, interest income on fixed
deposits, etc
5. Direct expenses : factory labour, factory overheads ,freight inwards, etc which
affect gross profit
6. Indirect expenses: administrative expense, selling expense, etc which do not
affect gross profit
WHAT ARE THE STEPS TO BE FOLLOWED TO CREATE SUB GROUPS?
Group Creation:
Group can be created either in Single Creation Mode or Multiple Creation Mode. Before creating sub groups
under primary groups,
 Go to Gateway of tally
 Press F 12 for Configuration
 Select Accts/inventory info
 Set all option as No
 Single creation Mode
Gateway of tally---Accounts info---selects Groups --- Select ‘Create’ under ‘Single group’
  Multiple creations Mode
Gateway of tally---Accounts info---selects Groups --- Select ‘Create’ under ‘Multi group Creation’

WHAT ARE THE STEPS TO BE FOLLOWED TO DISPLAY GROUPS-ALTERATION OF

GROUPS-DELETION OF GROUPS?
Display of group:
 Single display mode: Gateway of tally--- Accounts Info--- select Groups---select Display under
single mode
 Multiple display Modes: Gateway of tally--- Accounts Info--- select Groups--- select Display
under multiple mode.
Selecting all items from the list of groups pop up menu brings up the current list of groups for the company
in tally. Also, the group under which they have been created is displayed from which page up and page down
keys to scroll through the list.
Alteration of Groups
Once group has been created, they can be altered in both single and multiple modes. User created groups
can be altered. Tally pre defined groups, the group under which it has been created, cannot be altered.
Path 1: Single display mode: Gateway of tally--- Accounts Info--- select Groups---select Alter under single
mode
Path 2: Multiple display Modes: Gateway of tally--- Accounts Info--- select Groups--- select Alter under
multiple modes.
Deletion of groups
Tally pre defined groups cannot be deleted. However, user created groups can be deleted. To delete a user
created group, use the Alt+D key when the screen in the group alteration (single Mode) screen. However,
groups with sub groups or groups containing ledgers cannot be deleted. The lowest level must be deleted first.

WHAT ARE THE STEPS INVOLVED IN CREATION, DISPLAY, ALTERATION AND DELETION
OF LEDGER ACCOUNTS?
Ledger accounts are actual account heads, to which a transaction can be identified .i.e. all voucher
entries are passed using ledgers.
In tally ledgers are classified under a group, so that report can be generated after a transaction is
entered. In ledger Cash and Profit & Loss a/c is created default as soon as company as created.
Creation of Ledgers
 Ledgers can be created both in single and multiple creation modes.
 Before creating ledgers, from Gateway of tally—Press F 12: Configuration key—Select
‘Accts/Inventory Info’ and set the following option ‘yes’

Single ledger: Gateway of tally---Accounts info--- Ledger --- ‘Single ledger’-- Create
Multi ledgers: Gateway of tally---Accounts info---Ledger --- ‘Multi ledgers’-- Create
Display of ledgers
Ledgers once created, can be displayed both in single and multiple modes, the path for the same are
given below:
Single ledger: Gateway of tally---Accounts info--- Ledger --- ‘Single ledger’-- Display
Multi ledgers: Gateway of tally---Accounts info---Ledger --- ‘Multi ledgers’--- Display
Selecting all items from the list of groups pop up menu brings up the current list of ledgers for the
company in tally. Also, the ledgers which have been created are displayed from which page up and page down
keys to scroll through the list.
Alteration of Ledgers
Once ledger has been created, they can be altered in both single and multiple modes. User created
ledgers can be altered. Tally pre-defined ledgers can also be altered.
Single ledger: Gateway of tally---Accounts info--- Ledger --- ‘Single ledger’-- Alter
Multi ledgers: Gateway of tally---Accounts info---Ledger --- ‘Multi ledgers’--- Alter
Deletion of ledgers
User created ledgers can be deleted. To delete a user created group, use the Alt+D key when the screen in
the ledger alteration (single Mode) screen. However, ledgers for which transactions have been entered cannot
be deleted. The lowest level must be deleted first. Tally pre defined ledgers; the profit and loss cannot be
deleted.

WHAT DO YOU MEAN BY VOUCHER? WHAT ARE DIFFERENT TYPES OF VOUCHERS WITH
REFERENCE TO TALLY?
Voucher-Meaning
A voucher is a basic recording document. Daily business transactions are entered in Tally through
Vouchers. Entering the business transactions through voucher called Voucher Entry. Tally has pre-defined
voucher like Contra Voucher, Journal Voucher, Sales Voucher, Purchase Voucher, Receipt Voucher, Payment
Voucher and so on. Follow the below steps for voucher entry:
 In the Gateway of Tally, Select Voucher Entry option. The accounting voucher creation screen
will be displayed.
 Press the function key of which voucher type is required to enter the transaction.

Types of Accounting vouchers and Functions Keys

Tally is pre programmed with a variety of accounting vouchers, each designed to perform a different
job. The standard vouchers are
 F4 - Contra
 F5 - Payment
 F6 -Receipt
 F7 –Journal
 Ctrl + F8 –Credit notes
 Ctrl +F9 – Debit notes
 F8 – Sales
 F9 – Purchase
 Ctrl +F10 – Memorandum
 F10 – Reversing Journal
 Ctrl + T – Post dated
 Ctrl + L-Optional

WHAT ARE THE STEPS INVOLVED IN VOUCHER ENTRY?

Voucher No
 It is used to identify the total number of vouchers entered in each type.
 Three option in tally for voucher numbering viz automatic, manual, None
 If automatic is selected ,then tally automatically allots an incremental number which cannot be
modified
 If manual is selected ,its used to give the voucher number manually which can be modified
 If manual is selected, the voucher number field will not appear.
Voucher Date and Day
 It is used to enter the date of transaction on voucher
 It is displayed on the right top portion of the voucher.
 To give effective date ,to see whether in F12 configuration selected voucher type has been enabled
 The date is used to calculate the due date and interest
 For two or more transaction of the same day need not enter the date again and again if once entered is
enough.
 To change the voucher date, press F2 key which automatically changes the date to the next date.
Voucher alteration
If you want to change the entries in the Voucher follow the below steps:
 In the Gateway of Tally select Display option
 Then choose Day Book option from the Display menu
  Select the particular Voucher entry account to change and then press ENTER key. Then, you
can alter the entries in that voucher.
Gateway of Tally à Display à Day Book à Enter
Cancellation of Voucher
It means deleting the voucher without physically removing it. To cancel a voucher, tally will ensure
that voucher number is not assigned to any other subsequent voucher. Alt + X can be used to cancel the
voucher. While opting for cancellation, it will ask for confirmation Cancel yes or no. To cancel the
voucher, click yes
Deletion of Voucher
If you want to delete a Voucher entry follow the below steps:
 In the Gateway of Tally, select Display option.
 Then choose Day book option from the Display menu
 Select the particular Voucher entry to delete and then press Alt + D keys.
 Are you sure to delete the voucher entry press ENTER key or “Y” to delete otherwise, press
“N” in the confirmation small box.
Gateway of tally à Display à Daybook à Alt + D à Enter

BANK RECONCILIATION STATEMENT

WHAT DO YOU MEAN BY BANK RECONCILIATION STATEMENT (BRS)?
Meaning: Bank Reconciliation statement is a list in which are indicated the various items that cause a
difference between the bank balance as per cash book and pass book on any given date. This statement
bridges the gap between the balance shown by the cash book and pass book.
Definition: BRS is defined as a statement prepared at periodic intervals, with view to identify the
items which cause disagreement between the balances as per the bank columns of the cash book and the bank
pass book on any given date.
Drawbacks
 It cannot generate a traditional Bank Reconciliation statement
 It does not display daily balance
 It considers the balance as per Cash book for interest calculations. Therefore the interest computation
may become useless.
 Here amounts not reflected in bank statement will be displayed.
 Before opting for bank reconciliation, it must assess the extent of its usefulness and ascertain whether
the time spent for entering the date of transactions as extended in passbook is worthwhile.

Voucher-wise reconciliation
 It mark the bank dates only against vouchers and not against cheques. If two or more cheques
are entered in a single voucher and the cheques were cleared on different dates by your bankers
then in such cases, reconciliation becomes difficult.
 Reconciliation will be completed only when all the cheques are cleared.
 It is advisable to create a separate voucher for each cheque issued or deposited.
 This will take a lot of time if the cheques issued and deposited.
 This will take a lot of time if the cheques issued and deposited everyday are numerous.
WHAT ARE THE STEPS INVOLVED IN BANK RECONCILIATION STATEMENT?
Process of Bank Reconciliation
Pass all entries of Bank receipts and payments for a particular period. For reconciliation:
 Gateway of tally àDisplay àAccount books à Cash and Bank books
 Select bank accountà Press Alt + F2 for date range à Press F5 for reconciliation à Give
pass book datesàaccept.
 To skip any entry either press up and down arrow keys or press enter.
To view the bank reconciliation statement
 Gateway of tally à Display à Account booksàCash and Bank books à press Alt +F2
for date range àPress F5
WRITE A NOTE ON BILLWISE DETAILS.
 During Ledger entry / modification, when you enter opening balance at ledger account for which you
have set Yes at Maintain Balances Bill-by-Bill, you should enter Bill wise break-up of the opening balance.
Date: Enter Date of Bill
Name: Enter bill reference (normally Bill No.)
Due Date or Credit days: Enter the Due Date of the Bill Due date would be arrived at by adding the
credit days from date of Bill.
Amount: Enter Outstanding Bill Amount (not original bill amount, if part paid).
Dr. or Cr.: Enter the sign, D (for Debit balance) or C (for Credit Balance).
HOW TO CREATE A MANUFACTURING JOURNAL?
Manufacturing Journal is the record of Materials Produced and the corresponding materials consumed
for the Production, in a manufacturing process.
Creation of Manufacturing Journal
In creation of new voucher type:
Gateway of Tallyà Inventory Info àVoucher Types àCreate
 At the name field enter manufacturing journal.
 At the type of voucher, select stock journal
 Respond with yes to the query use as manufacturing journal
 Select Inventory Voucher and click Alt+F7 Stock journal button. Now select the Manufacturing
Journal Voucher Type to get the Manufacturing Journal entry screen.

COST CENTRES AND COST CATEGORIES

Cost centre is used to analyse Ledger figures. For example, to get department-wise analysis of
expenses (like conveyance expenses, Car Expense etc., you may create Departments as cost centre and
allocate the amount entered for the respective expenses in Vouchers to the cost centers. A cost centre is
primarily of two types a) Personal Cost centre b) Impersonal Cost centre which consist of a location or item
of equipment.
WHAT IS COST CENTRE?
A cost centre can be said to be any unit of an organization to which transactions can be allocated. When
only costs or expenses are allocates to these units, they are referred to as Cost centers. Tally gives the cost
centre break up of each transaction as well as details of transactions for each Cost centre. When you also
allocate income to the units, they become Profit centers. Profit and loss account of each cost /profit centre
can be obtained.
WHAT IS COST CATEGORY?
Proper use of cost centre reduces the cost categories as the cost centre itself would give the same
benefits. By using the cost categories, it’s possible to allocate more than one cost centre i.e. for allocation of
expenses department wise, cost centre and cost categories can be used.

HOW TO ACTIVATE COST CENTRE AND COST CATEGORY OPTION?

F11àCompany Features to be activated
Maintain Cost centre : Yes
More than one category : Yes (if necessary)
F12 à Configuration: Voucher Entry à Show cost centre Details: Yes

HOW TO CREATE, ALTER, DISPLAY AND DELETE A COST CENTRE AND COST
CATEGORY?
To create cost categories
 Gateway of tallyà Accounts information àCost categories àSingle à Create
 Gateway of tallyàAccounts information àCost categories àMultiple à Create
 Respond with ‘Yes’ to allocate expenses and incomes of revenue nature (E.g.: Salary)
 Respond with ‘Yes’ to allocate the expenses and incomes of capital nature also (E.g: Machinery)
To create cost centre
 Gateway of tallyà Accounts information àCost centre àSingle à Create
 Gateway of tallyà Accounts information àCost centre àMultiple à Create
To alter a Cost category
 Gateway of tallyà Accounts information àCost categories àSingle à Alter
 Gateway of tallyà Accounts information àCost categories àMultiple à Alter
 Respond with ‘Yes’ to allocate expenses and incomes of revenue nature (E.g.: Salary)
 Respond with yes to allocate the expenses and incomes of capital nature also (E.g: Machinery)
To alter cost centre
 Gateway of tallyàAccounts information àCost centre àSingle à Alter
 Gateway of tallyà Accounts information àCost centre àMultiple à Alter
To view / display Cost centre and cost category
 Gateway of tallyàDisplayà Statement of accountsà cost centre àCategory summary
We cannot view the category wise details in a columnar form. After the results of the
transactions entered category wise details can be viewed on one to one basis.
 To view in a Single mode, use the following steps
 Gateway of tallyàDisplayàStatement of accountsà cost centre à Cost centre break up
 To view in Columnar Form, use the following steps
 Gateway of tallyàDisplayàStatement of accountsà cost centreàCost centre break up àAlt +
N àSelect cost centre
To delete a cost centre
In the alteration mode, press Alt + D for deletion of a cost centre. This will seek a confirmation ‘yes/no’.
Press <Enter> for deleting and Press <Esc> for cancellation of deletion.
WRITE SHORT NOTES ON MULTI CURRENCY
 If a company has made transactions more than one currency, the company has to record the
transactions either in the home currency or in the foreign currency.
 If they are recorded in home currency, the rate at which the foreign currency is exchanged for the
home currency should be recorded as well.
 Importers and exporters are required to enter transactions in foreign currency. Balance sheet and Profit
and loss account of the company are maintained in the base currency.
 Whenever a transaction is made in foreign currency then corresponding value of base currency is to be
entered. The gain or loss due to the fluctuations in exchange rates is reflected in the final account
statements.
HOW TO CREATE NEW CURRENCIES? WHAT ARE ITS COMPONENTS?
Creation of New Currencies
Press F11: Accounting features à allow multi currency à set as ‘Yes’
Gateway of tallyà Accounts infoàCurrenciesàCreate
Components of Currencies
 Basic Currency Symbol
 Formal Name
 Number of Decimal places
 Show amount in millions
 Is symbol suffixed to amount
 Put a space between amount and symbol
Short cut keys to get currency symbols
Currency name currency symbol
Pound Alt + 156
Yen Alt + 157
Euro Alt + 0128
Franc Alt + 159
Cent Alt + 155
WHAT ARE THE STEPS INVOLVED IN FIXING RATE OF EXCHANGE FOR CURRENCY
VALUE? AND HOW TO ALTER THE CURRENCY DETAILS?
Rates of Exchange
Gateway of tallyàAccounts infoàCurrenciesà Rates of exchange
Serial Number - Automatically numbered ,cursor does not move here
Currency - Created currencies are displayed here, cursor does not move here.
Standard Rate - To enter standard rate for each currency, normally published in newspapers,
Bulletins of central bank (e.g. RBI in INDIA)
Selling Rate - To enter the exchange rate at which forex has been sold. This rate is normally
published in newspapers or bulletins
Buying rate - To enter the exchange rate at which the buying forex from your banker. This rate is
normally published in newspapers or bulletins.

Alteration of currency
To alter a currency, select an existing currency from the list of currencies
Gateway of tallyà Accounts infoàCurrenciesà Alter –select the currency, multi currency alteration will
be displayed in which alteration can be made.

WHAT ARE THE STEPS INVOLVED IN ACTIVATION OF INTEREST CALCULATION?

 Gateway of tallyà PRESS F12: Configuration àVoucher Entry
 Show Bill wise details – respond with ‘yes’
 Show table of bill details for selection respond with ‘yes’
 Gateway of tallyà F11: Features
 Tab down to the Accounting Features and set ‘yes’ to the option Activate Interest Calculation.
 Set ‘No’ to the option Use Advanced Parameters.
 Accept the changes and return to gateway of tally
Syntax for this is,
F11: Features to be activated
Maintain Bill wise details àYes
Use Debit /credit Note à Yes
Activate Interest calculations àYes
Use advanced parameters à No
Gateway of Tally à Accounts Information à
Voucher types à Alter àDebit Note and Credit
note à Change Name class to interest à use class
for interest accounting à Yes

WHAT ARE THE VARIOUS METHODS FOR

CALCULATION OF INTEREST IN TALLY?
 Interest is calculated on the outstanding
balances of any ledger account or on
outstanding bills/invoices/transactions
 Reports can be obtained on interest
calculations based on instructions as
provided
 Interest is desired in the following two situations i) On outstanding balance amount, ii) on outstanding
bills /invoices/transactions
 Interest is recalculated with every change in outstanding balances
 It gives an exhaustive capability to obtain interest implications
 In outstanding balances amount to specify the rate of interest and the interest calculation style
 Interest calculation are based on the following
 Type I: 30 day a month –interest calculated assuming that all months have 30 days
 Type II: Calendar month - interest calculated as per calendar.
HOW TO ACTIVATE THE ADVANCED MODE OF INTEREST CALCULATION?
This advance mode is very useful where the rates of interest are subject to frequent changes. To activate
this mode, press F11: Features- use advanced parameters has to be enabled as ‘yes’.
At the time of creation of ledger, the following screen will appear for you to respond according to your
choice.
 While choosing interest calculation, in case of sundry creditors to select credit balance in interest
parameters and debit balance for sundry debtors.
 In case of applicability, there are two options viz. i. Always ii. Past due date. While lending and
borrowing of loans to opt Always where as in case of trading transaction to select ‘Past Due date’.
 In ‘Calculate from’ three options are available viz. Date of applicability, due date of Invoice /Ref &
Eff. date of transaction.
 Rounding option is used to round off the interest to the nearest or to create own rule for rounding off

BUDGETS AND CREDIT LIMITS:

WHAT DO YOU MEAN BY BUDGET? WHAT ARE THE ESSENTIALS OF BUDGET?
Meaning: A budget is monetary and/or quantitative expression of business plan and policies to be pursued in
the future period of time. It is a detailed plan of operation for some specific future period.
Essentials of budget
 It is prepared in advance and is based on future plan of actions.
 It relates to a future period and is based on objectives to be attained.
 It is a statement expressed in monetary / physical units, prepared for the implementation of policy
formulated by the management.

HOW TO ACTIVATE BUDGET FEATURE IN TALLY? WHAT ARE THE STEPS INVOLVED IN
BUDGET CREATION?
To activate the budget in Tally,
Press F11 Company features: Maintain Budgets and controls to be enabled as ‘Yes’

STEPS INVOLVED IN BUDGET CREATION:

Accounts Info Budgets Create
Budget creation screen consist of following:
 Name: the name of budget for easy identification
 Under: To select the parent budget. Any number of sub budget can be created under primary budget
 Period of budget: to enter from and to dates in this field
 Set/Alter budgets of – to set budget for groups type yes in the group field or to set budget for ledger
type yes at budget column
WHAT ARE THE STEPS INVOLVED IN ALTERATION AND DELETION OF A BUDGET?
 Budget information can be altered using following step
o Gate way of Tally Accounts Info Budgets Alter
 Budget information can be deleted using following step
o To delete, first to select a budget which is to be altered / deleted from
the list of budgets. On selection of a budget it can be altered in
necessary fields or press <Alt> + <D> for deleting the budget.

HOW TO VIEW / DISPLAY THE BUDGET?

There are two ways available to view the budget:
 Gateway of Tally Display Accounts book  Group summary 
Select Group <Alt>+<B>
 Gateway of Tally Display Trial balance  <Alt>+<B>  select the
required Budget

CREDIT LIMIT
WHAT DO YOU MEAN BY CREDIT LIMITS? WHAT ARE THE STEPS INVOLVED IN SETTING CREDIT
LIMITS?
 Credit Limit refers to the maximum monetary limit agreed upon mutually by the seller and the buyer
for trading purposes.
 Credit Limits can be specified for any Ledger account falling under the groups Sundry Debtors and
Sundry Creditors.
 Ledger Accounts created under Sundry Creditors are also allowed for defining Credit Limits for the
reason that there may be two-way trade between the parties i.e., you may sell to a Sundry Creditor and
buy from a Sundry Debtor Accounts.
 To activate Credit Limits feature in Tally.
 Press F11 Features Accounting Features  Set Maintain Budgets and Controls to Yes
Steps involved in setting credit limits:
 Gateway of Tally  Accounts Info Ledgers Create / Alter
Credit Limit
 Specify the credit limit against the ledger account
 Set the amount limits in foreign currency for ledgers involving forex transactions.
Credit Period
Credit period can be specified in No. of days or the due date and are calculated from the Voucher date or
Invoice date or the effective date.
Exceeding credit limits
If the credit amount limit is exceeded during voucher entry, Tally prompts an error message displaying the
amount exceeding the credit limit specified. However, we can
1. Enter an amount, within the prescribed credit limit, to complete the entry ; or
2. Obtain authorization to increase the credit amount limit in the Ledger Alteration screen.

DAY BOOK
WHAT IS DAY BOOK? HOW TO VIEW THE DAY BOOK?
In Tally, the Day Book is by default displayed for the current date (as on the last date of voucher
entry). However, we may specify the required period, as per our requirements. It could also be set up to list
all the transactions made over a certain period.
To view the Day Book,
 Gateway of Tally  Display  Daybook
 Press Alt+F2 to specify the required period

UNIT – III Completed

UNIT - IV
INVENTORY INFORMATION
Inventory information deals with buying and selling of goods for which numerous documents to be
created such as enquiries, quotations, orders, Challans etc.

WHAT ARE BUYING AND SELLING ACTIVITIES OF A TRADER?

I. Purchases
 1. Enquiries and quotation for purchases – an enquiry is an invitation to a prospective seeking
their terms and conditions and delivery schedule. A trader may send enquiries to vendors to submit their
offers for sale.
2. Purchase order- a trader has to choose from numerous offers that he receives in response to
his enquiry. He may decide from whom he has to buy and place a purchases order with the supplier stating his
terms of purchase.
3. Receipt note (Purchase) – where the goods received from supplier is accompanied with a
delivery Challans, receipt note can be used to record the receipt of goods
4. Rejection out (Purchase return) – it is used to record the return of goods that were purchased
earlier by the trader
5. Payment of money to creditors
6. Account payable and Age analysis of creditors
II. Sales
1. Enquiries and quotation for sales – a quotation is an offer for sales specifying the seller’s
price, terms and conditions and delivery schedules.
2. Sales order – on acceptance of the offer for sale made by the seller, the buyer may place a
purchase order fro supply of goods at the rates, terms and conditions and delivery schedule specified in the
purchase order. Generally the terms and conditions are the same in both purchase and sales order.
3. Delivery Note (Sales)- it is a delivery challan which is issued at the time of the delivery of
goods, which affects stock quantity. If the goods are delivered against a sales order, the delivery may be
linked to the order to get outstanding order status
4. Rejection in (Sales Return)- if the buyer returns the goods to the seller, it is known as a sales
return. This return is treated as rejections in which affects only the stocks.
5. Receipt of money from debtors and
6. Accounts payable and age analysis of debtors

WHAT IS A STOCK JOURNAL?

Stock journal is used to record the transfer of stock from one location (godown) to another without
affecting the books of accounts. Therefore, a trader may have to maintain the following documents for
maintaining inventory.

Pre-transaction Challans Invoices Stock Vouchers

Documents
Enquiry Delivery note Sales invoice Stock journal
Quotation Receipt note Purchase Invoice Physical stock
Sales order Rejection In Debit note
Purchase order Rejection Out Credit note

These documents may be broadly classified into two categories: Inventory Vouchers & Non-inventory
vouchers. Inventory vouchers are related to transactions that effect physical stock while non inventory
vouchers are related to stock items that do not affect stock.

WHAT ARE THE TYPES OF NON-INVENTORY VOUCHERS?

Non inventory vouchers:
Enquiry, quotations and order are non inventory vouchers in the sense that no stock transaction takes
place through these documents. These are a prelude to inventory vouchers like Challans or invoices.
Normally, these comprise of the following activities:
Sending enquiries for purchase of materials to prospective vendors.
Placing purchase order for supply of materials
Submitting of quotations to prospective customers for sale of products.
Receiving purchase orders from customers for sale of goods/issue of sales order
Non inventory vouchers may further classified in two categories
Pre order
 Quotation
  Enquiry
Order
 Purchase order
 Sales order

WHAT ARE THE INVENTORY MASTERS?

The inventory info menu of a new company consist of the following masters
 Stock Group
 Stock items
 Voucher types
 Units of measure
 Apart from these, this menu consists of stock categories, godowns etc. which can be activated as
and when necessity arises.

WHAT IS STOCK GROUP? WHAT ARE THE STEPS INVOLVED IN THE CREATION,
ALTERATION AND DELETION OF A STOCK GROUP?
Stock groups
Stock Groups are helpful in the classification of Stock Items. We can group Stock Items under
different Stock Groups to reflect their classification based on some common features such as brand name,
product type, quality, etc. Grouping enables you to locate Stock Items easily and report their details in
statements.

Stock group creation

Stock group can be created either under single mode or multiple modes. In multiple modes many
groups can be created simultaneously.
To create stock group in Single mode
Gateway of Tally inventory Info  Stock Group Single Group  Create
To create stock group in multiple mode
Gateway of Tally inventory Info  Stock Group Multiple Group  Create
Stock group alteration
Stock group can be altered either under single mode or multiple mode.
To Alter stock group in Single mode
Gateway of Tally inventory Info  Stock Group Single Group  alter
To Alter stock group in multiple mode:
Gateway of Tally inventory Info  Stock Group Multiple Group  alter
Deletion of a stock group
Deletion is possible only in the single mode. A stock group can be deleted by using the alteration
menu. This can be done as below:
Gateway of Tally inventory Info  Stock Group Single Group  alter  select the
stock group which is to be deleted  Press Alt + D
WHAT IS STOCK CATEGORY? WHAT ARE THE STEPS INVOLVED IN THE CREATION,
ALTERATION AND DELETION OF A STOCK CATEGORY?
Stock Category is an alternate way to find items of similar nature. Like stock Groups, classification is
done based on similarity in behaviour.
To enable Stock Category option in the Inventory Info menu, press F11  Inventory Features 
Set Yes for Maintain Stock Categories.

Creation and Alteration of stock category

Like stock groups, the stock category can be created either under single mode or under multiple
modes. The path for creation and alteration of category is given below:
Creation: Gateway of Tally  Inventory Info  Stock Categories  Create
Alteration: Gateway of Tally  Inventory Info  Stock Categories  Alter
 Deletion : Gateway of tally  Inventory Info Stock Category  Alter  Select <stock
category>  Press Alt + D

WHAT IS A STOCK ITEM? WHAT ARE THE STEPS INVOLVED IN CREATION OF A STOCK
ITEM?
Stock Item refers to the actual items that are transacted (receipts, issues and production of goods).
These are normally placed under stock groups and stock categories. Stock items are as important as ledger in
accounting. Stock items do not have to be compulsorily classified under cost categories.
Creation and alteration of stock items
It is similar as stock groups and stock categories, the stock items can be created either under single
Mode or under multiple mode.
For creation: Gateway of tally  Inventory Info  Stock Item  Create
For alteration: Gateway of tally  Inventory Info  Stock Item  Alter
Steps involved in creation of a stock item
 Name: Specify the name of the Stock Item.
 Alias: If a particular stock item has another name which makes for easy identification, then you can
enter it in this field.
 Under: Here we can select the Stock Group to which the Stock Item belongs. By default, Primary
Stock Group appears in this field.
 Category: Here we can select the Stock Category under which the stock Item belongs. By default,
Not Applicable is displayed in this field.
 Units: Here we can select the Unit of measurement applicable for the stock item. By default, Not
Applicable appears in this field.
 Alternate Units: This is useful when you need to handle different units at different times. This
Alternate Units field gets enabled only after enabling Use Alternate Units for Stock Item in Inventory Master
Configuration.
 Maintain in Batches: To maintain the batch information of Stock Items, set the option Maintain in
Batches to Yes.
 Track Date of Mfg.
To specify the manufacturing date for the item, set Track Date of Mfg. to Yes.
 Use Expiry Dates
To specify the expiry date of the item, set Use expiry dates to Yes. This option is useful
for stock items like medicines, Food items, etc.
 Set Component Bill Of Materials: This option gets enabled only after enabling Allow Component
List Details (Bills of Material) in Inventory Master Configuration.
 Rate of duty: This field is used for the calculation of excise duty or if duty is based on item rate.
During Invoicing, whenever you select a Stock Item, the Rate of duty entered here is displayed in the Invoice
creation screen.
 Tariff Classification: This field will appear only when you specify a value in the Rate of Duty field.
 Opening Balance: Specify the details of Opening Stock, if any, for the Stock Item as on the date of
Beginning of Books.
 Set Standard Rates: To enable this option, set Yes for Allow Std. Rates for Stock Items in Inventory
Master Configuration. This option helps you specify standard purchase rate and standard sales rates for the
item.
 Behaviour Group: To enable this option, set Yes for Allow Advanced Entries in Masters. Options
available under Behaviour Group are:
 Costing Method
This field will display the List of Costing Method for valuing the Stock Item. The value
arrived at using this method will be the stock value. This method considers only purchase cost.
 Market Valuation Method
By using Market Valuation Method, you can determine the realisable worth of an Item.
Select the appropriate method applicable for the Item from the Valuation Methods List.
 Ignore Diff. due to Physical Counting
 If you wish to ignore the difference and continue with the stock as per books, set this
option to Yes.
 Ignore Negative Balances
Set Yes, to ignore the item in the stock reports, in case it has a negative balance.
 Treat all Sales as New Manufacture
If you set this to Yes, whenever a sales entry is made, Tally automatically updates the
quantity and value in inward by treating the same entry as a New manufacture or purchase.
 Treat all Purchases as Consumed
If you set this to Yes, then, whenever a purchase entry is made, Tally automatically
updates the quantity and value in outward by treating the same entry as consumed.
 Treat all Rejections inward as Scrap
If you set this to Yes, then, whenever a rejection inward entry has been made, Tally
automatically reduces the amount from the closing stock balance. In this case, you need not pass the credit
note for reducing the value against rejection inward. This is used for defective items returned by the customer.
 Allow use of expired Batches
If you set this to Yes, during selection of batches in voucher entry, expiry batches also
get included in the List of Active Batch.

WHAT ARE THE PROCEDURES FOR DISPLAY, ALTERATION AND DELETION OF STOCK
ITEM?
Display of stock item
You can view a single stock item master and multiple stock item masters.
Displaying a Single Stock Item
Gateway of Tally  Inventory Info Stock Items  Display (under Single Stock Item)
Displaying a Multiple Stock Item
Gateway of Tally  Inventory Info Stock Items  Display (under Multiple Stock Item)
Alteration of a stock item
You can alter a single stock item master and multiple stock item masters.
Gateway of Tally  Inventory Info Stock Items Alter
Deletion of a stock item
Gateway of Tally  Inventory Info Stock Items Alter Alt + D
If a transaction is entered for that item, it is not possible to alter the units and delete the stock item.

WRITE SHORT NOTES ON UNITS OF MEASURES?

Stock Items are purchased and sold on the basis of quantity, which is measured by Units. Hence, it is
necessary to create Units of Measure. This unit of measure should be created before creation of stock items.
We can also create unit of measure at the time of creation of a stock item by pressing Alt + C at the
unit of measure field. We can have simple units such as numbers, meters, kilograms, and pieces and
compound units like dozen of 12 pieces [1 dozen =12 pieces].
Procedure for Creation of unit of measure
The following is the step-by-step procedure of creation of unit of measure.
Gateway of tally  Inventory Info  Units of Measure  Create
For Ex –
Symbol Formal name
Kgs Kilograms
Nos Numbers
Ltr Liters
Doz Dozens
Mtrs Meters
Piec Pieces

WHAT IS GODOWN? WHAT ARE THE STEPS INVOLVED IN CREATION OF GODOWN?

 Godown is a place in which you can kept the stock items. In business, you may have one Godown or
more than one Godown depending upon your business. So, here you can create Single Godown or Multiple
Godown to store the stock items.
To activate the godown feature in tally, Press F11 for company features and set Yes for Maintain
Multiple Godowns.
Creating a single godown
To create a Single godown follow the below steps:
 In the Gateway of Tally, select Inventory Info option.
 Select Godowns in the Inventory Info menu.
 Choose Create in the Single Godown. The Godown creation screen will be displayed with the
following contents:
– Name: In the Name field, give the name of the godown e.g. Head Office-Chennai
– Alias: Give an alias for the name, if required. E.g. Head Godown
– Under: Give the location under which this location is to be sub-grouped. Press Alt+C
Keys to create the Parent location. Select Primary if it is not a child for any location.
– Allow Storage of Materials? Press ‘Yes’ or ‘No’ to allow stock items to store or not. E.g.
Press ‘Y’ to store materials.
Displaying Godown
Gateway of Tally  Inventory Info  Godown  Single Godown  Display
Altering Godown
Gateway of Tally  Inventory Info  Godown  Single Godown  Alter
Creating Multiple Godowns
To create a Multiple Godowns follow the below steps:
 Choose Create in the Multiple Godowns in the Godown menu.
 The Multi Godown Creation screen will be displayed.
 Here, we can create a Primary Godown or A Secondary Godown.
Displaying Multiple Godowns
Follow the below sequence to display the list of Godowns:
Gateway of Tally  Inventory Info  Godown  Multiple Godowns  Display
Altering Multiple Godowns
Follow the below sequence to Alter the list of Godowns:
Gateway of Tally  Inventory Info  Godown  Multiple Godowns  Alter

INVENTORY VOUCHERS
WRITE SHORT NOTES ON INVENTORY VOUCHER.
 Inventory Vouchers are means of entering transactions. Inventory Vouchers perform the function in
the inventory system that accounting vouchers do in the accounting system.
 Accounting vouchers will update only Accounts, but Inventory vouchers will update both Accounts
and Inventory.
 Inventory vouchers record the receipt and issue of goods, the transfer of stock between locations and
physical stock adjustments.
 If you have not integrated accounts with inventory, inventory vouchers will not have any impact on
the Balance Sheet stock figures. The stock balances will be maintained separately.
 To enable this option Press F11 for company features and set ‘Yes’ for Integrate Accounts and
Inventory.

WHAT ARE THE DIFFERENT TYPES OF INVENTORY VOUCHER?

The following are some of the standard vouchers available in tally
 Stock journal,  Rejections out
  Delivery note  Physical stock
 Receipt note  Rejection in
Goods receipt note and delivery note can be activated only by responding ‘Yes’ to option ‘Use
Tracking Numbers’ in F11:Company features. Tracking numbers are useful in case where the receipts of
goods are not accompanied by suppliers’ invoice, which will arrive on a later date. Similarly, in cases where
the goods are delivered without sales invoice which will be sent later, tracking numbers are quite useful.
The function of each of the above voucher is explained below:
Stock Journal
Stock Journal is a Journal in which all types of Stock Adjustments are entered.
The stock adjustment may be due to:
 Inter-Godown Transfer: This is useful to transfer the goods from one location to another. The
quantity of Stock remains the same, but the Location changes.
 Manufacturing Process: If you are involved in the manufacturing process in which raw materials are
consumed and finished goods are produced, then you can create a manufacturing Journal Voucher
also.
 To view the Stock Journal Voucher
 Gateway of Tally  Inventory Vouchers
Rejection Out
The Rejections out Voucher records goods that are rejected and returned to a supplier.
To view Rejections out Voucher:
 To enable this voucher Press F11: Inventory Features, set ‘Yes’ for Use Rejection Inward / outward
Notes.
 Gateway of Tally  Inventory Vouchers
 Press Alt+F6 or Select the button F6: Rej. Out from the Button Bar
Delivery Note
The Delivery Note Voucher is used for recording goods delivered to a customer. If a sales order exists for a
customer, you can bring the relevant particulars by selecting the appropriate sales order.
To view the Delivery Note voucher,
 From F11: Inventory Features, Enable the option Use Tracking Numbers (Delivery / Receipt
Notes).
 Gateway of Tally  Inventory Vouchers
 Press Alt+F8 or select the button F8: Dely Note from the button bar.
Receipt Note
This voucher type is used for recording goods received. This voucher consists of details like reference,
ledger account, suppliers’ name and addresses, name of stock item, etc.
To view the Receipt Note Voucher,
 From F11: Inventory Features, Enable the option Use Tracking Numbers (Delivery / Receipt Notes).
 Gateway of Tally  Inventory Vouchers
 Press the button Alt+F9 or Select the button F9: Rcpt Note from the button bar.
Physical Stock
Physical Stock Voucher is used for recording the actual stock which is verified or counted. It could
happen that the Book Stocks and the Physical Stock do not match. It is not unusual that the company finds a
discrepancy between actual stock and computer stock figure.
To view the Physical Stock Voucher,
 Gateway of Tally  Inventory Vouchers
 Press Alt+F10 or Select the button F10: Phys Stk from Button Bar
Rejection In
A Rejection In Voucher is used to record goods that are rejected and returned by the customer.
To view the Rejections In Voucher
 From F11: Inventory Features, Enable the option Use Rejection Inward / outward Notes.
 Gateway of Tally Inventory Vouchers
 Press the Ctrl+F6 or select the button F6: Rej. In from the Button Bar
WHAT IS A TRACKING NUMBER? HOW TO ACTIVATE THE TRACKING NUMBER?
 A Tracking number is the reference to have a link between transactions. For example, if Tracking
Number is selected in the Delivery Note, this will help you to automatically display the details of the
items in the Sales Invoice.
 The tracking number pop-up list appears after you have entered the name of the item. Many businesses
deliver stock with a delivery note with the bill being raised later. The bill has to be linked or tracked
with the goods already delivered. In tally, tracking numbers does the job.
 Tracking numbers allow goods receipt and goods delivery notes for goods not accompanied by an
invoice to be linked with the invoice that is raised later. Of course, tally permits the opposite too. A
bill can be raised first and the goods delivered. Again, tracking numbers does the trick.

The following steps are involved in activation of tracking number:

 F11: Company Features  Set ‘Yes’ for ‘Use Tracking Numbers and use rejection notes’.
 Gateway of Tally Inventory Vouchers
 F9: Receipt note
 Enter the transaction.
 Select Tracking number and give item details.
 Press enter on the blank tracking number to return to the main voucher.
 Accept the voucher and return to gateway of tally.
 Select display, statements of inventory, and then purchase bills pending.
 Tally tracks down the goods that have been received for which the corresponding bills have not been
received.
To adjust the above entry, pass a purchase invoice.
 Gateway of Tally Accounting Vouchers
 F9: Purchase
 In the inventory allocation select relevant tracking number, rests of the details are displayed
automatically.
 Accept the voucher.
 Go to display  Statement of inventory  Purchase Bill pending  Find that no bills are pending.

REORDER LEVEL AND STATUS

WHAT IS REORDER LEVEL?
This is the level at which a new order for material is to be placed by the store keeper. This level is
fixed by taking into account the following factors:
a. Rate of consumption of material
b. Minimum level
c. Delivery time
d. Variation in delivery time
In simple mode, Tally accepts the quantities that you specify. In advanced mode, it considers the past
consumption patterns to suggest reorder levels. However, choose to define your own reorder levels. You may
also specify the minimum quantity of the item to be ordered, either in simple or advanced mode.
The purpose of specifying reorder levels is to obtain a report that indicates the quantity of a Stock Item that
you must order.

WHAT ARE THE STEPS INVOLVED IN ENTERING THE RE-ORDER LEVEL?

 Press F11: Inventory Features and Set ‘Yes’ for Allow Purchase Order Processing then only the
option Reorder Levels is displayed in the Inventory Info. Menu.
 When you select the Stock Group under the Reorder Levels menu, the Reorder Levels screen will be
available, by default.
 Gateway of Tally  Inventory Info  Reorder Levels
Select a group of Stock Items from the List of Groups, to specify Reorder Levels for the Stock Items in
the Specify Reorder Levels screen. For each item in stock, we can define a Reorder Level and the Minimum
Order Quantity.
WHAT ARE THE USES OF RE-ORDER STATUS?
The Reorder Status gives the information on available stock, reorder level, minimum reorder quantity
and accordingly the next order to be placed by the business concern. This report will help in taking the
appropriate decision for timely Purchase of Materials and will readily provide all relevant information
required for placement of a Purchase Order.
To display Inventory Reorder Status:
Gateway of Tally  Display  Statement of Inventory  Reorder Status  Select the Group
The user can select the relevant column and drill down to get the detailed information on the same. For
instance, the re-order level column can be selected and drilled down further to analyse how the reorder level is
specified in the master record. Similarly, an analysis can be done of the minimum reorder quantity, the net
available quantity etc.

WRITE SHORT NOTES ON BATCH-WISE DETAILS.

 Batch details are used to identify the movement of the inventory in batches or lots. Although this is a
requirement primarily of the pharmaceutical industry, the same can be used by other industries that
maintain or manufacture perishable goods.
 Many organizations also purchase in lots in order to monitor the lots purchased individually. Hence,
Tally has used the term Batch/Lot. During voucher entry date of manufacture of the product defaults
to the date of the voucher, which can be changed.
 However, one cannot change the date of manufacture to a date later than the voucher date. Expiry date
cannot be a date prior to the voucher date.
 Batches/Lots are also often used to monitor the date of manufacture, date of receipt or the expiry
date.

WHAT IS BILL OF MATERIAL? HOW TO ACTIVATE THE BILL OF MATERIAL?

A bill of material gives a complete list of materials required for a particular job or work order. It is
generally prepared by the planning department as soon as the work order is received. When the job is started,
all the materials listed in the bills are sent to the production department.
In Tally, Bill of materials (BOM) is a list of components to manufacture a product. Once bill of
materials is defined, then it will compute the standard consumption of raw materials for specified quantity of
finished products.
Default bill of materials option remains deactivated. It allow component list details under inventory
Masters heading at accounts/Inventory Info Configuration screen is enabled then only bill of materials will
be activated.

To activate bill of materials:

Gateway of Tally  F12: Configure  Select Accts/Inventory Info  Set Allow Component List
Details (Bill of Materials) to Yes
A Bill of Material should be available while manufacturing an item. This is done through a stock
journal. It is advisable to create a new voucher type, say, Mfg Journal which is based on Stock Journal. On
activating this option, while creating a stock item a query set components (BOM) appears. Respond with
‘Yes’ to this option.
UNIT – IV Completed
 UNIT- V

STATUTORY AND TAXATION

Tax revenue is the main source of income and its receipt is going up year after year. The propensity
for more tax revenue to finance successive Five-year plans, Social Welfare objectives and Government
Expenditure, etc., has one of the main instruments to achieve the various socio-economic objectives.
Tax is a compulsory charge imposed by the government to the people without getting any return
directly. India has a well developed tax structure comprising the Union Government, the State Governments
and the Urban/Rural Local Bodies. The main taxes / duties that the Union Government is empowered to levy
are Income Tax, Customs duties, Central Excise and Sales Tax and Service Tax.
The principal taxes levied by the State Governments are Sales Tax, Stamp Duty, State Excise, Land
Revenue, Duty on Entertainment and Tax on Professions. The Local Bodies are empowered to levy tax on
properties, Octroi, and so on.

VALUE ADDED TAX

WHAT IS VAT? WHAT ARE THE OBJECTIVES OF VAT?
Meaning of VAT:
As the very name indicates VAT (Value Added Tax) implies that it is a tax on the value added to the
inputs received from others payable at the time of sale of final products. Value added may be by any
economic action i.e. be it at the manufacturing, wholesale or retail level to commodities and to the services
rendered. A comprehensive form of VAT covers the value added at all the three levels, that is manufacturing
wholesaling and retailing. VAT is levied on both goods and services.
Objectives of VAT:
1. Simple tax system: To have a relatively simple tax system to administer and to achieve complete
compliance of books of account.
2. Uniform tax base: To implement a uniform tax base throughout the country.
3. Mechanism to collect taxes: To provide a mechanism to collect taxes with reference to locations
of economic activities.
4. Uniform rules of taxation: To have uniform rules of taxation on international flow of goods
across the nation.
5. Audit Trail: To facilitate tax enforcement by providing audit trail through different stages of
production and sales.
WHAT ARE THE FEATURES OF VALUE ADDED TAX?
The following are the important features of Value Added Tax
 The dealer has the right to decide the tax by filing correct monthly returns by following the principle
of self assessment. They need not carry volume of books to the sales tax office and spend much of
their time. Only few percentages of assessments will be taken at random for scrutiny by the officers.
 Instead of inspection, the officials will audit the records related to purchases and sales. The dealer can
avail tax credits for all taxable purchases of the valuable goods. Tax credit carry forward facility is
there in this new system.
 For delayed payment of taxes interest is charged to 1.25% per month instead of 2% as in the previous
Act. The department also gives 0.5% interest for delayed refunds, which are more than 90 days.
WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF VAT?
Advantages of VAT
 Exports: Exports are not burdened with domestic taxes
 Taxing consumption: VAT provides an instrument of taxing consumption of goods and services.
 Minimum interference: Minimum interference is caused in market forces.
 Audit trail: Enforcement of tax is made easier by introducing audit trail through different stages
of production and trade. VAT acts as a self-policing system.
Economic advantages of VAT
 Buoyant Revenue: VAT fetches larger amount of revenue due to efficient tax collection
mechanism and willingness of the payer to pay the tax due to reduced tax burden at each stage.
  Efficient tax collection: Accounts based on computerized information and enforcement of tax by
providing audit trail through different stages of production and trade, tax collection becomes
efficient.
 Reduction in tax evasion: Reduced tax burden and denial of VAT benefit for tax evasion (If there
is tax evasion, the chain is broken; VAT benefits on preceding transaction is not allowed) results in
reduction in tax evasion.
 Increased tax base: Since tax enlarges and increases tax base, the requirement is lower tax rates.
Disadvantage of VAT:
 Its burden falls disproportionately on the poor since the poor are likely to spend more of their
income than the relatively rich person.
 VAT is not a single point tax; therefore, there is enormous increase in paperwork and volume of
administrative work.
 Some businessmen seize almost any opportunity to raise prices, and the introduction of VAT
certainly offers such an opportunity.
 VAT places a heavy direct impact of tax on the labour-intensive firm compared to the capital-
intensive competitor, since the ratio of value added to selling price is greater for the former. This is
a real problem for labour-intensive economies and industries.
WHAT ARE THE METHODS OF IMPLEMENTATION OF VAT?
There are two methods of implementation of VAT namely:
1. Subtraction method: Under subtraction method purchases are reduced from sales and tax is levied
only on value added.
2. Tax credit method: Under tax credit method tax is levied on full sale price, but credit is given for
tax paid on purchases. Thus tax is levied only on value added.
Tax credit is better as audit control helps the control of tax evasion. Moreover there is flexibility in
applying different tax rates to different commodities. Most of the countries follow tax credit method for
implementation of VAT.
DIFFERENTIATE VALUE ADDED TAX FROM CURRENT SALES TAX
SALES TAX VALUE ADDED TAX
Tax is collected at one stage of purchase or sale of The tax burden would be shared by all the
goods. Therefore, the burden of the full tax is borne dealers from first to last. Then, such tax
by only one dealer, either the first or the last dealer. would be passed upon the final consumers.
The tax is levied at a single point. VAT is a multi-point tax.
General and specific exemptions are granted on VAT does not permit such exemptions.
certain goods
Concessional rates are provided on certain taxes. VAT system would provide the full credit on
the tax that has been paid earlier.
A current sale tax is levied on goods only VAT is levied on goods and services both.
Assessment is done by the department Self-assessments are done by dealers.
Penalty for defaulter is not strict Penalty is strict.

WHAT ARE THE STEPS INVOLVED IN COMPUTATION OF VAT IN TALLY?

 VAT is calculated by deducting tax credit from tax collected during the payment period.
 VAT is imposed on the difference between the sale price of the goods produced or the services
rendered, and the cost thereof – that is, the difference between output tax and input tax.
 Input tax means when a company buys goods or services from another supplier, VAT is charged on
the purchase price that is known as input tax.
 Output tax means when the company sells its own goods or services, it charges its customers some tax
on them, i.e. VAT. This is the output tax.

WHAT ARE THE STEPS INVOLVED IN ENABLING VAT IN TALLY?

 In the Gateway of Tally menu, press F11: Company features screen appears. Press F3 to open the
Statutory & Taxation screen.
  In Statutory & Taxation screen, set ‘Yes’ for Enable Value Added Tax (VAT) and Set/Alter VAT
Details. After enabling these options, press the Enter key. Now, Tally will prompt you to enter the
details in the VAT Details window.
 Select the state, beside the State option.
 Select the type of dealer as Regular, beside the Type of Dealer option from Types of VAT Dealer
pop-up menu.
 In the next option i.e. Regular VAT Applicable From, enter the date from which you want to the
VAT to be applicable.
 After entering the VAT details, press the Enter key. The VAT Details screen gets saved and
Company Features screen gets displayed.
 Enter the Tax information according to your requirement. The rest of the option remains unchanged.
 Accept Yes to save the changes done in Company Features screen.
WHAT ARE THE LEDGER MASTERS AFFECTED BY VAT?
The VAT classification is displayed as a drop down list in the ledger master. Tally gives the
flexibility to the user to either have the classification selected in the ledger master attached to all transactions,
or select differentSTAGE
classifications everyoftime
1: Supplier Rawduring voucher
materials entry. The ledgers affected by VAT are:
to Manufacturer
 Purchase ledger Price of Raw materials
Duties & Taxes ledger  Rs.200.00
Direct expenses /
 Sales ledger Input tax paid @ 4% by manufacturer income
Rs. 8.00
WHAT ARE THE DIFFERENT STAGES IN CALCULATION
Selling price OF VAT? Rs.208.00
The following chart Here depicts computation
supplier collects of VATfrom
Rs.208 @ 4% at each stage and
the manufacturer of business
pays from the Raw
materials supplier to the consumer.
Rs.8/- to the Govt. as tax.
STAGE 2: Manufacturer of the product
A. Cost of Product Rs.200.00
B. Input Tax paid @ 4% Rs. 8.00
C. Total purchase cost Rs.208.00

Rs.230.00
D. Product Selling price
Rs. 9.20
E. Output Tax charged @ 4%
F. Total Selling price Rs.239.20
[Link] payable (E-B) Rs.1.20
H. Profit on Manufacturer (F-G-C) Rs.30
STAGE 3: Dealer
A. Cost of Product Rs.230.00
B. Input Tax paid @ 4% Rs. 9.20
C. Total purchase cost Rs.239.20

Rs.260.00
D. Product Selling price
Rs. 10.40
E. Output Tax charged @ 4%
F. Total Selling price Rs.270.40
[Link] payable (E-B) Rs.1.20
H. Profit on Manufacturer (F-G-C) Rs.30
STAGE 4: Retailers
A. Cost of Product Rs.260.00
B. Input Tax paid @ 4% Rs. 10.40
C. Total purchase cost Rs.270.40

Rs.287.50
D. Product Selling price
Rs. 11.50
E. Output Tax charged @ 4%
F. Total Selling price Rs.299.00
[Link] payable (E-B) Rs.1.10
H. Profit on Manufacturer (F-G-C) Rs.27.50
STAGE 5: Consumers
Here the consumer purchases the product @ Rs.299/- from the Retailer to use
the product.
 Here each and every stage, Raw material supplier, Manufacturer of the product, Dealer, Retailer and
Consumer paying tax @ the rate of 4% to the Government. From one stage to another stage the Input tax paid
is set-off by the Output tax. So, above based on VAT system no one was affected including consumer also.
In the above VAT is visible to every body and equal VAT rate is fixed in all stages of business.

WHAT ARE THE DIFFERENT VAT CLASSIFICATIONS?

VAT classification is the list of VAT rates, which are used to describe the type of transaction and the
nature of the business activity. When any statutory changes take place, these transactions are automatically
updated because these are in-built in the system. Some classifications of VAT are as follows:
 Input VAT @ 1%
 Input VAT @ 4%
 Input VAT @ 12.5%
 Output VAT @ 1%
 Output VAT @ 4%
 Output VAT @ 12.5%
 Purchases-Capital goods
 Purchases-Exempt
 Purchase from unregistered dealers.
During Ledger creation, Voucher entries etc. one has to select the appropriate classification category,
depending upon the type of business and type of transaction. The sales and purchase transactions are separate
as these are based on the classification selected during voucher entry and shown in VAT computation.

WHAT ARE THE STEPS INVOLVED IN CREATION OF

(1) Purchase ledger for vat
(2) Sales ledger for vat
(3) Vat ledger under duties and taxes
(4) Vat ledger under direct expenses / income
1. Creating a purchase ledger for vat
To create a Purchase Ledger in tally, undertake the following steps:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the name of the purchase ledger beside the Name field. E.g.: Purchase @ 4%
 Select Purchase Accounts from the list beside the Under option.
 Set the Inventory values are affected option to Yes as required.
 Type Yes beside the Used In VAT Returns option.
 The VAT/Tax Class window appears, with a VAT/TAX Class pop-up menu. This menu
displays a number of options. Select one of the options (purchases @ 4% or 1% or 12.5% or
Exempt etc.,) from the list which is relevant to the Purchase ledger i.e. Purchase @ 4%
 Type the opening balance beside the Opening Balance in the Ledger Creation Screen.
 Press the Enter key and click on Yes to save the ledger.
2. Creating a sales ledger for vat
To create a Sales Ledger in tally, undertake the following steps:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the name of the Sales ledger beside the Name field. E.g.: Sales @ 4%
 Select Sales Accounts from the list beside the under option.
 Set the Inventory values are affected option to Yes as required.
 Type Yes beside the Used In VAT Returns option.
 The VAT/Tax Class window appears, with a VAT/TAX Class pop-up menu. This menu
displays a number of options. Select one of the options (Sales @ 4% or 1% or 12.5% or
Exempt etc.,) from the list which is relevant to the Sales ledger i.e. Sales @ 4%
 Type the opening balance beside the Opening Balance in the Ledger Creation Screen.
 Press the Enter key and click on Yes to save the ledger.

3. VAT ledger under duties and taxes

There are two types of VAT ledgers under duties and taxes (1) Input VAT and (2) Output VAT ledger.
  Input VAT ledger is used to record the transaction of input tax.
 Output VAT ledger is used to record the transaction of output tax.

Creation of an Input VAT Ledger

 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the name of the Input VAT ledger beside the Name field. E.g.: Input VAT @ 4%
 Select Duties and Taxes from the List of Groups pop-up menu beside the Under option.
 On selecting the group Duties and Taxes, the list of tax types, such as CST, Others and VAT are
displayed. Select VAT for VAT related transactions.
 Click beside VAT/Tax Class option to display the VAT/TAX Class pop-up menu. Select Input
VAT @ 4% from the pop-up menu.
 Type the percentage of VAT in the Percentage of Calculation option.
 The Method of Calculation option will display On VAT Rate because you have selected VAT
under Type of Duty/Tax and VAT/TAX Class.
 Accept the Input VAT ledger.

4. VAT ledger under direct expenses / income

The VAT/Tax classification is selected in the same manner as for the sales and purchase ledgers. The
steps for creating a VAT ledger under direct expenses / Income is same as for creating sales and purchase
ledgers. These are as follows:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the name of the ledger beside the Name field. E.g.: Freight Inwards
 Select Direct Expenses from the List of Groups pop-up menu beside the Under option.
 Set Yes in Used In VAT Returns option.
 Select Purchases @12.5% class from VAT / Tax class pop-up menu.
 Click on Yes to create the ledger.
 After you have saved your new ledger, the ledger creation screen reappears. Press the Esc key
twice or click on the close option to go back to the gateway of tally menu.

WHAT ARE THE VOUCHERS AFFECTED BY VAT?

The entire data entry and reporting transactions in tally are based upon the VAT classifications
selected during voucher entry. The vouchers affected by VAT are as follows
 Purchase  Credit note
 Sales  Journals
 Debit note
WRITE SHORT NOTES ON TAX DEDUCTED AT SOURCE (TDS)
Income tax is collected/recovered in two stages, namely
 Pre- assessment stage
 Post- assessment stage
The methods which pre-assessment tax collected are deduction of tax at source, collection of tax at
source, advance payment of tax. To make recovery of tax very easier and effectively, the tax is collected at
hew source of income itself. It is the duty of a person who is making payment of the following types of
income to another person should deduct tax at source at eh prescribed rates. The rate at which tax should be
deducted varies according to the entity & income level of the recipient.
Different heads of income where TDS is deducted.
 Deduction of Tax from salaries
 Deduction of tax at source from interest on securities
 Deduction of tax at source from winnings from lotteries or crossword puzzles
 Deduction of tax at source from winnings from horse race
 Deduction of tax at source from Payments to contractors or sub-contractors
 Deduction of tax at source from Insurance commission
 Payment to non-resident sports man or sports association
 Deduction of tax from commission etc. on sale of lottery tickets
 Deduction of tax at source from Income by way of rent
 Deduction of tax at source from on fees for professional or technical services
 Deduction of tax at source from Income of mutual fund
 Deduction of tax at source from Income from foreign currency bonds
 Deduction of tax at source from Income of foreign institutional investors from securities.
The concept of TDS was introduced in the Income Tax Act, 1961, with the objective of
deducting the tax on an income, at the source of income. It is one of the methods of collecting Income Tax,
which ensures regular flow of revenue to the Government.
TDS in Tally provides an easy-to-use and flexible interface. It helps you to handle intricate cases and
calculate the tax payable to the Income Tax Department. Tally calculates the tax of all parties/ suppliers
where TDS deduction is mandatory. It calculates the TDS automatically and prints Form16A certificates,
Forms 26Q, 27Q, 26, 27 and 27A (Cover Note) for Quarterly/ Annual Returns as per statutory requirement.
It allows the user to view and print various TDS reports, Challans and TDS Outstanding statements.

WHAT ARE THE FEATURES OF TDS?

The TDS functionality in Tally supports the following features:
 TDS is simple and user-friendly for tally users.
 TDS is easy and quick to set up and use.
 TDS made accounting for tax on partial/full payment of bills.
 TDS is flexible for auto and manual calculation in tally.
 It is complete tracking of each transaction from deduction to payment.
 Challan management and printing for prompt and accurate filing of tax.
 The Auto allocation feature prevents error-prone data entry and helps to track the transactions
faster.
 TDS allows multi-party printing.
 Data exports from NSDL complaint to TDS file format.
 TDS Challan, TDS computation and TDS payable reports generate form 16A.

WHAT ARE THE BENEFITS OF TDS?

TDS gives following benefits:
 TDS allows you to configure TDS ledgers by specifying the nature of payment and access
types, along with the rates of TDS.
 TDS determines user-defined expense/payment type with user-defined rates.
 Auto-deduction of TDS based on predefined rates, once the transaction exceeds the threshold
limit.
  It generates Challans and Form 16A certificate.
 Quarterly and annually returns are also generated.
 E-TDS files generate in NDCL compatible formats.

WHAT ARE THE STEPS INVOLVED IN ENABLING TDS IN TALLY?

We can enable TDS in Tally by pressing the F11: Features button on the vertical button bar. There
are three features of the company here in Tally – Accounts, Inventory and Statutory & Taxation. To enable
the TDS, follow the steps given here:
 In the Gateway of Tally menu, click on the F11: Features button located in the vertical button
bar. A company features screen appears.
 Click on the Statutory & Taxation option. The Statutory & Taxation features window appears.
 Under the Statutory and Taxation, set Enable Tax Deducted at Source (TDS) option to Yes.
 Also enable the Set/Alter TDS Details option.
 Now, press the Enter Key. A company TDS Deductor details screen appears.
 Let us understand various options present in the Company TDS Deductor Details screen.
 Tax Assessment Number:
The Tax Assessment Number (TAN) is the ten-digit alphanumeric number which is issued by
Income Tax Department to the deductors. Only one TAN number is required for all types of deduction to
one deductor. This TAN is quoted on all Challans. A challan is a Payment made for the TDS returns and all
certificates issued in Form No.16/16A. This is the form which contains all the documents and other
correspondences with Income-tax Department. The format of the 10 digit TAN number is like this:
BLRJ00123A which means
 BLR – The first three digits indicate the location code of the TAN allotment center.
 J: It indicates the first alphabet of the deductor’s name.
 00123: It indicates the number within the location.
 A: It indicates the check digit for security and verification.
 Income Tax Circle/Ward (TDS): The Income Tax Department issues Income Tax Circle/Ward
(TDS) which you have to fill in this field.
 Deductor Type: The Deductor type is selected depending upon the organization from the list
whether it is Government or other.
 Name of person responsible: This is the name of the person responsible to file the TDS Returns of
your company.
 Designation: Enter the designation of the person responsible for the filing of the TDS returns.

WRITE SHORT NOTES ON ‘LEDGERS PERTAINING TO TDS’.

The information required to create TDS ledgers depends on the features opted by you in company
features screen. If you set the enable TDS option to No, you will not find any TDS related information in
the ledger creation screen. Hence make sure that TDS option is set to Yes.
TDS ledger names can be created under main group heads such as duties and taxes, sundry creditors,
sundry debtors, all current assets groups etc. TDS ledgers can also be created depending on the type of TDS
expense. You need to set the Maintain bill wise details for non-trading Accounts also to Yes in F11:
features to get the Is TDS Application option. The TDS ledger master screen now contains a tax related
option to specify the tax details.

WHAT ARE THE STEPS INVOLVED IN CREATION OF LEDGER?

The tax ledger holds the entire automatic calculation for TDS tax deductions at the vouchers entry
level. It is internally enabled to calculate tax. The option to specify the tax type is available only for ledgers
under the Duties and Taxes group. The tax ledger master screen can be created by undertaking the
following steps:
 Gateway of TallyAccounts Info  Ledgers  Create
 Type the Name of the Tax Ledger under Name option
 Select Duties & Taxes option from the List of Groups pop-up menu beside the under option.
 In the Type of Duty /Tax option select the TDS from the list.
  In the Nature of Payment option, select the appropriate nature of TDS payment from the List of
TDS Nature of Payment pop-up menu applicable according to the organization policies or as desired
by the government.
 In the Ignore TDS Exemption Limit option, if the total transaction limit exceeds the actual limit, you
need to set the Ignore TDS Exemption Limit field to Yes. Doing so will ensure that the tax is not
calculated up to exemption.
 In the Inventory values are affected option, if you want to record the transaction related to the
inventories, then set this option to Yes.

WHAT ARE THE STEPS INVOLVED IN CREATION OF A TDS PARTY LEDGER?

Follow the step given here to create a TDS Party Ledger:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the Name of the Party under Name option
 Beside the under option, select the Sundry creditors / Sundry debtors option from the List of
Group pop-up menu.
 Set the Maintain balances bill-by-bill? Option to Yes.
 Enter the details in the Default Credit Period, if applicable.
 By default, the Inventory Values are affected? options is set to be No.
 Set the Is TDS Applicable? Option to Yes. Enabling this option will open the TDS Details form.
 Select the Deductee Type from the List of deductee types pop-up menu.
 Set Yes for Is Lower / No Deduction Applicable?
 Select the Section Number from the list is selected, the cursor moves to the TDS Lower Rate (%)
field.
 Enter the TDS lower rate beside the TDS Lower Rate (%) field.
 Set Yes for Ignore Surcharge Exemption Limit?
 Accept Yes to save the Ledger.

WRITE SHORT NOTES ON TDS VOUCHERS?

The Voucher enables you to book the expenses directly and helps you to deduct the TDS and pay the
amount to the party for their services. Now follow the step given here to create a TDS voucher.
 Gateway of tally  Accounting voucher  Press F7 for Journal
 In the particulars column, select Fees for professional or Technical services from the list in the
particulars column and enter the amount in the debit column.
 Select the party from the list of ledgers pop-up menu and the amount appears automatically in the
credit column.
 Press the enter key to view the bill wise details screen;
 Select the type of ref as new ref.
 Select the TDS Ledger from the list to the right.
 Now, the Is Lower / No Deduction, Section Number and TDS Lower Limit options are automatically
picked up by the system and the pointer moves to the amount option.
 The amount is automatically picked up by the system, but you can also modify the amount here.
 Press the enter key to save the bill-wise details;
 Accept yes to save the journal voucher.

WHAT DO YOU MEAN BY TAX COLLECTED AT SOURCE (TCS)? STATE THE FEATURES
OF TCS.
TCS is the Tax Collected by the seller from the buyer/ lessee at the source. The goods are specified
under section 206C of the Income Tax Act. If the purchase value of goods is M, the amount payable by the
buyer is M + N, where N is the value of tax at source. The seller deposits N (Tax Collected at Source) at
any designated branch of banks authorized to receive the payment.
List of specified goods/ transaction
 Alcoholic liquor – 1 %
 Tendu leaves – 5 %
 Timber obtained under forest lease – 2.5 %
 Timber obtained other than forest lease – 2.5 %
  Any other forest produce not being timber or tendu – 2.5 %
 Scrap (reusable) – 1 %
 Licensing or leasing of parking lot, toll plaza, mining & quarrying – 2 %

Features of TCS in tally

The TCS function in Tally supports the following features
 It is simple and easy-to-use for the user.
 It preserves TCS records.
 It prints TCS challan from Tally.
 It automatically generates TCS returns from Tally and file.
 E-TCS (electronic format) filling facility is provided in Tally.

What are the difference between TDS and TCS

1. In case of TDS, the person making the payment (for services received by him) deducts tax. In case
of TCS, the person receiving payment (for goods sold) collects tax. In case of TDS, the payer
deducts tax from out of the income of the payee. On the other hand, in case of TCS, the person
receiving income (seller) collects tax from the person paying the income (buyer).
2. Various nature of payment with respect to which TDS is applicable, is dealt with by several
sections in the income tax Act. On the other hand goods/contracts in respect of which TDS is
applicable, is dealt with by section 206c only.
3. Terms used for TDS are deductor (payer) and deductee (payee). Terms used for TCS are
collector(seller) and collectee (buyer)

WHAT ARE THE STEPS INVOLVED IN ENABLING TCS IN TALLY?

To enable Tax Collected at Source (TCS) is Tally, perform the following steps:
 Gateway of Tally  F11: Company Features  F3: Statutory & Taxation
 Set Yes in Enable Tax Collected at Source and Set/Alter TCS Details
 Press Enter to view Company TCS Collector Details and enter the necessary details
according to the requirement.
 Accept changes by pressing the Enter key.

WHAT ARE THE STEPS INVOLVED IN CREATING PARTY LEDGERS FOR DEBTORS /
CREDITORS?
In tally, party ledgers are quite useful in categorizing clients of an organization. For smooth
maintenance of records, you can put clients and their financial and accounting details under different ledgers
and identify who is creditor or debtor for whom. Now follow the steps given here to create party ledger in
Tally:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Type the Name of the Party under Name option
 Beside the under option, select the Sundry Debtors / Sundry Creditors option from the List of
Group pop-up menu.
 Set the Maintain balances bill-by-bill? Option to Yes.
 Enter the details in the Default Credit Period, if applicable.
 By default, the Inventory Values are affected? options is set to No.
 Set the Is TCS Applicable field? Option to Yes. Enabling this option will open the TCS Details
form.
 Select from the List of Collectee types menu shown in the right side of the screen for Buyer /
Lessee in TCS Details screen.
 Set Yes for Is Lower / No Collection Applicable?
 Select the Section Number from the list is selected, the cursor moves to the TDS Lower Rate (%)
field.
 Enter the TCS Lower Rate (%) as 10%
 Set Yes for Ignore Surcharge Exemption Limit?
 Accept Yes to save the Ledger.
HOW TO CREATE THE FOLLOWING LEDGERS FOR TCS?
(1) Sales ledger for TCS
(2) TCS ledger under Duties and taxes
Sales Ledger for TCS
Undertake the following steps to create a sales ledger:
 Gateway of Tally  Accounts Info  Ledgers  Create
 Enter a name for the sales account ledger
 Choose the sales accounts option besides the Under option from the list of groups menu
 Set the Inventory Values are affected? to Yes, if you are maintaining inventory. Otherwise, leave
it as No.
 Press the Enter key or click on Yes to save the changes.
TCS Ledger under Duties and taxes
A ledger is created under duties and taxes only when some sort of tax or duty is levied on selling
products or goods. One good example could be selling timber products by any businessman of one state into
the market of another state. In such an example, the businessman has to pay the duty to the state where he is
selling the timber products. Let us now undertake the following steps and learn to create ledgers under
duties and taxes.
 Gateway of Tally  Accounts Info  Ledgers  Create
 In the Ledger Creation screen, enter the name of the TCS ledger in the Name option.
 In the Under option, select Duties & Taxes from List of Groups pop-up menu.
 Select TCS from Types of Duty/Tax pop-up menu for the Type of Duty/Tax option.
 Select from the Nature of Goods/ Contract/ License/ Lease option.
 Set No for Inventory Values are affected?
 Accept Yes to save the Ledger.

HOW TO CREATE A SALES VOUCHER FOR TCS?

Undertake the following steps to create Sales Voucher:
 Gateway of Tally  Accounting Vouchers  F8: Sales
 Press Alt + I to enable the Invoicing mode.
 Select the Party’s A/c from the List of Ledger Accounts pop-up menu.
 Select Sales Ledger from the List of Ledger Accounts pop-up menu.
 Select the Stock Item from the List of Items in Name of Item.
 Enter the Quantity and the Rate to get the amount in the Amount field.
 Select the TCS party ledger for sales from the list of ledgers accounts pop-up menu under the
Name of Item and press the Enter key.
 By default, the gross amount is displayed in TCS Details in the TCS Computation screen. The
gross amount, if required, can be modified at this stage.
 Enter new reference and Due Date, or Credit Days.
 Press Enter to accept and save.

WRITE SHORT NOTES ON SERVICE TAX.

Service tax is an indirect tax levied on certain category of services provided by a person, firm,
agency etc. The government of India has marked a set of services as taxable under the service tax structure.
A firm/person providing a service that comes under the service tax category has to pay service tax. Service
tax is to be shown separately in the invoice and is payable based on the payment realized.
For example, when you buy a service that falls under service tax category, you avail service tax
credit based on the payment made. Therefore, you pay service tax on the services that you sell and get credit
on the service tax payable when you buy a service. The following are a few examples of taxable services.
 Advertising agency
 Air travel agents
 Banking and other financial services
 Broadcasting services
 Practicing Chartered Accountants services
 Clearing and forwarding agents
  Practicing company secretary’s services
 Consulting engineer
 Practicing cost accountants services etc.

IMPORTANT TERMS USED IN SERVICE TAX

Input Service – any service (a) used by a provider of a taxable service fro providing an output
service or (b) used by the manufacturer in relation to the manufacture of final products and clearance of such
products.
Output service – any taxable service provided by the provider of taxable service to a customer,
client, subscriber, policyholder or any other person.

WHAT ARE THE STEPS TO ENABLE SERVICE TAX IN TALLY

Undertake the following steps to enable Service Tax in Tally:
 Gateway of Tally  F11: Features  F3: Statutory & Taxation
 Set Yes to Enable Service Tax and Set/Alter Service Tax Details options.
 Now, press the Enter key in the Company Features screen to get the Company Service Tax Details
window.
 Enter the necessary details and click on Yes to save the changes.

WHAT ARE THE STEPS INVOLVED IN CREATION OF A SERVICE TAX LEDGER.

Service tax ledger is used to calculate service tax. The rate of service tax is set to predefined values
in tally and this can be changed in a transaction. Tally will automatically update all the changes affected by
the service tax rates. To create service tax ledger, undertake the following steps:
 Gateway of Tally  Account Info  Ledger  Create
 Type the Ledger Name besides the Name option.
 In the Under option, select Duties & Taxes from List of Groups pop-up menu.
 Select service tax beside the type of Duty/Tax.
 Set Yes beside the inventory values are affected option.
 Click on Yes to create the ledger.

HOW TO CREATE SALES LEDGERS AND PURCHASE LEDGERS FOR SERVICES?

Creating sales ledger for services
Sales ledgers are created for keeping the records of sales. If you are selling a service, then create a
ledger for the service provided. These ledgers can be in Sales Accounts or Direct Incomes Groups.
Undertake the following steps to create a Sales Ledger for Services in Tally:
 Gateway of Tally  Account Info  Ledger  Create
 Type the Name of the service besides the Name option.
 In the Under option, select Sales Accounts or you can select Direct Incomes from List of Groups
pop-up menu.
 Set the Inventory values are affected to Yes, if you are maintaining service as item. For example:
You sell consultancy charged by the number of hours.
 Set the Is Service Tax Applicable option to Yes.
 Select the category of service, such as Chartered Accountant, from the List of Service Categories
pop-up menu.
 Press the enter key after selecting the service category. Click on yes to save the ledger.

Creating purchase ledgers for services

Creating ledgers for purchasing services fall under purchase accounts and direct expenses group.
Any purchases made for the services are recorded in the purchase ledger. Undertake the following steps to
create purchase ledgers in tally:
 Gateway of Tally  Account Info  Ledger  Create
 Type the Name of the service you are buying besides the Name option.
 In the Under option, select Purchase Accounts or you can select Direct Expenses from List of
Groups pop-up menu.
 Set the Inventory values are affected to Yes.
  Set the Is Service Tax Applicable option to Yes. When you set the Service Tax Applicable option
to Yes, you will get the Category Name screen with the List of Service Categories pop-up menu.
 Click on Yes to save the ledger.

SECURITY CONTROL
WHAT IS SECURITY CONTROL? WHAT ARE THE TYPES OF SECURITY LEVELS?
Security control
By using Security control we can prevent the non-essential tasks which are performed by an
employee in an organisation, for example, a data entry operator could create Masters, view the Trial
Balance, Final Accounts, Ratio Analysis or delete essential information etc. Security controls need to be
defined based on the work profile of an employee. Typically, in an organisation the administrator has all the
access rights to the system, whereas the employees are given access rights based on their work profile
demonstrating segregation of duties.

Types of Security Levels

In Tally, there are two levels of Securities available by default, namely Owner and Data Entry.
1. Owner: The owner has full access rights which will enable him to work with all the
features of Tally, except for Tally Audit and Company Alteration which are reserved for
the Administrator. Based on pre-defined security levels the Administrator can create other
security levels and assign or restrict access based on the requirement.
2. Data Entry: Data Entry has restricted access but the administrator can assign or restrict
the access based on the requirement.
Creating security levels
Gateway of tally use <Alt> + <F3: Cmp Info> Security Control

TALLY AUDIT
WHAT IS TALLY AUDIT?
Audit is an important function of any business organization, it denotes that the business has true and
fair transactions during the year.
Tally has an inbuilt feature – Tally Audit which enables the auditor to perform an audit or track
changes that affect the integrity of a transaction, such as changes made to Group or Ledger Masters and
Amounts in the Voucher) are reflected in the Tally Audit Listings.

HOW TO ACTIVATE THE TALLY AUDIT?

Enable the Security Controls and Tally Audit feature while creating a company. We can use the
administrator Login ID or create an Auditor’s Login ID, password and assign the Basic Facilities of an
Owner or as required.
For existing companies we have to execute the following steps to enable Tally Audit:
Gateway of Tally  Alt + F3: Company Info  Alter
 In the Company Alteration screen set Yes to Use Tally Audit Features.
 Administrator can access the Tally Audit Reports. Tally Audit monitors significant changes,
like voucher date, value etc. (change in voucher narration etc., are ignored) for voucher & ledgers.
Display  Statement of accounts  Tally Audit
 The auditor can display or print the Tally Audit Listing and verify the transactions made.
 In case the auditor is satisfied with the authenticity of the transaction or the changes made, he
will accept all or selective transactions by clicking the relevant button.
 Once the transactions are accepted, they are removed from the audit listing and will not be
displayed again.

WHAT ARE THE STEPS INVOLVED IN ACCEPTING TALLY AUDIT LEDGER?

Undertake the following steps to display the changes made to the Ledger Masters
Gateway of Tally  Display  Statement of Accounts  Tally Audit  Ledgers
The Audit Ledgers screen is displayed. The listing here differs from the vouchers by two ways
 It allows you to display all Ledger Accounts and toggle between the ledgers that have been changed
by pressing F6: All Accts/Audit List.
  The F12: Configure button is not available and the Tally Audit Listing does not display the user
names, in case the Tally Audit feature is activated later. On accepting the verification of Ledger the
user names will be displayed.
 Changes made to the Ledger Name or their Opening Balances or newly created Ledgers since the last
audit are displayed in the List of New / Modified Ledgers. In case the Ledger names are
interchanged, the auditor can identify this by comparing the ledger Id assigned to each ledger and
comparing them to an earlier hard copy of the audit listings.
 On verification of the transactions the auditor clicks on F7: Accept One to accept each transaction
one by one or clicks on F7: Accept All to accept all the transactions. On acceptance of the
transactions by the auditor, the transactions will be removed from the Audit Listing Details.
 Alternately, the auditor can take a hard copy of the audit listing, verify the transactions manually and
accept them.
 To avoid interchanging or altering of Ledger Names and Opening Balance it is advised that the
user/auditor take a printout of the audit listing displaying the ledger Id, ledger Name and Opening
Balance immediately after creating the ledger masters and posting their opening balance

WHAT ARE THE STEPS INVOLVED IN ACCEPTING TALLY AUDIT VOUCHER?

Undertake the following steps to display the audit listings for vouchers:
Gateway of Tally  Display  Statement of Accounts  Tally Audit  Vouchers
 The Tally Audit Listing screen showing the List of New/Modified Vouchers is displayed
 Press F12: Configure and set Show Entered / Altered By to Yes.
 The Tally Audit Listing screen is displayed. On verification of the transactions the auditor
clicks on F7: Accept one to accept each transaction one by one or clicks on F7: Accept All to accept all the
transactions.
 On acceptance of the transactions by the auditor, the transactions will be removed from the
Audit Listing Details.
 Alternately, the auditor can take a hard copy of the audit listing, verify the transactions
manually and accept them.

EXPORT OF DATA
WHAT IS EXPORT OF DATA IN TALLY?
Tally allows the user to export reports or data which can be viewed or published using any one of the
standard formats available. We can also import the same data into another company using Tally. We may
also find Export of Data very suitable to move selective data between remote Tally locations, like branches,
associates etc.
For example, we may export all the purchase orders data to factories located at distant places. The
factories, in turn, export the receipts notes & purchase invoice in respect of goods received by them from
vendors, to the Head office. Thus Head Office gets the complete data of purchases (orders, Goods receipt
notes, Purchase invoice) at a centralized place, in respect of all factories.
Tally keeps data in proprietary format. Other applications cannot read Tally Data directly. So, tally
data is a closed system and cannot be used outside Tally. However, you can export tally data in various
standard form (like ASCII, XML etc) which may be used in other applications very conveniently.

WHAT ARE THE VARIOUS DATA FORMATS USED IN TALLY. WRITE A NOTE ON REPORT
DATA AND RAW DATA.
Tally uses 3 formats to export data:
 ASCII (Comma Delimited)
 HTML (Web Publishing)
 XML (Data Interchange)
We get exported tally data in 2 formats. Reports are exported in linear format and raw data in flexible
format.
Report data
Report is processed from the transactions. For example, data exported from Trial Balance is a
processed data obtained from vouchers using the masters. You cannot import report data in tally. Report
data is useful to transport reports in electronic form and to use in other applications.
Raw data
This contains basic data of masters & vouchers. It can be imported into tally. So, this is useful to
move data from one tally database to another tally database.

WHAT ARE THE PROCEDURES FOR EXPORTING THE REPORT DATA, MASTER DATA
AND VOUCHER DATA?
Export of Report data
Click export button at the respective report screen to get the report export screen now specify as follows:
 Select default language (All languages)
 Select the data format in which you like to export the report.
 On Selecting HTML format, you will also select the appropriate resolution for display of the report.
Higher the resolution, wider would be the report.
 Enter the filename for the exported data.
The report, as per the options set in the report configuration, the report data are exported in the
selected format and stored in the file specified.

Export of Masters Data

Select Display  List of Masters. Click export button to get masters export screen now specify as
follows
 Select the data format in which you like to export the report.
 Enter the filename (to store data in other folder, enter filename with complete path) for the
exported data.
 Select the master to be exported. The specified masters data are stored in the selected format and
stored in the file specified.

Export of voucher data

Select Display  Day book and Press F2: period and specify the period for which you like to Export
data. Click Export button to get vouchers export screen. Now specify as follows:
 At format field, select the data format in which you like to export the report.
 At output file name field, enter the filename for the exported data.
 At the lower part, set the configuration option.
 At select the voucher to show, select the voucher types as follows:
 All vouchers: To export all vouchers for the selected period.
 Accounts vouchers only: To export all types of accounting vouchers (Contra, receipt,
Payment, journal, sales, purchases, debit note & credit note, memo, reverse journal).
 Inventory Vouchers only: To export all types of inventory vouchers.
The vouchers data are exported in the selected format and stored in the file specified.

IMPORT OF TALLY DATA

WRITE A NOTE ON IMPORT OF DATA IN TALLY.
In [Link] 9 we can import data from earlier versions of Tally, [Link] 9 and any third party
application using the predefined format of XML.

Import of Tally data:

Drill down through the import data option to get an import of data sub menu listing following options:
1) Masters and 2) Vouchers.
To Import Data,
 Gateway of Tally  Import of Data
 The Import of Data menu will be displayed

WHAT ARE THE PROCEDURES TO IMPORT & RE-IMPORT OF MASTER DATA AND
VOUCHER DATA?
To Import Masters execute the following steps:
Gateway of Tally  Import of Data  Masters
  In the Import of Masters screen, enter the required path and filename in the Import File
Name (XML) field. If the file is located in the default folder, then you need to provide the filename only.
 In the field Treatment of entries already existing select the required Behaviour
 Combine Opening Balances: Select this option to import data of different branches and
consolidate the opening balances. You can also select this option when the opening balances of existing
masters are Zero and need to be overwritten by the balances in the data being imported.
 Ignore Duplicates Select this option to import new masters along with the existing
masters in Tally ignoring the duplicates.
 Modify with New Data Select this option to replace the existing balances with those
existing in the data imported and also override the other options available in Behaviour list.
 Press Enter to Import Masters.
 Double click on [Link] file located in the [Link] folder to view the import log.
IMPORTING VOUCHER DATA
To import vouchers execute the following steps:
 Gateway of Tally Import of Data  Vouchers
 In the Import of Vouchers screen, enter the required path and filename in the Import File
Name (XML) field.
 Press Enter to import the Vouchers
 Double click on [Link] file located in the [Link] 9 folder to view the import log.
Import file name (XML)
Enter here the source XML filename (including drive and path) from where data is to be imported. A
progress bar indicates data being imported. While importing data, tally checks integrity of all data and
existence of all related masters. If anything is missing, the record would not be imported. Tally writes import
activities and failure, if any in tally. IMP file, at the same folder where tally software resides (recording error
encountered during import, if any).

WRITE SHORT NOTES ON BACK UP

Data on the computer is vulnerable to different types of threats and any data lost cannot be
recovered. Hence, there is a need to store data at a different location by taking a backup. It is advisable to
take data backup at frequent intervals as per the policies laid down by the organization and also ensure that
the data backup is secured logically and physically.
Tally provides the mechanism of taking backup of data from one storage medium into other. Backup
can be taken in the local hard disk or in an external media. The source and the destination of the backup
data must be given by the user, and tally will do as per the given data. You can create a main backup
directory under which subdirectories can be created to take backup on a daily basis.

WHAT ARE THE STEPS INVOLVED TO TAKE BACKUP OF DATA?

Back up of data can be carried out by executing the following steps:
Go to Gateway of Tally > Press F3: Company Info or Press Alt+F3  Backup
 In the Backup Companies on Disk screen, by default the cursor is at Name of Company, press
Backspace to change the Source or the Destination.
 Source - it is the source folder that contains data for which backup has to be taken, by default it is the
Data folder of [Link] 9
 Destination - it is a folder or an external device (pen drive/Portable Hard Disk etc.,) connected to the
same or another computer where the data backup has to be stored.
 Select the companies whose backup has to be taken from the List of Companies. To stop selecting
the companies, select End of List.
 Accept to continue taking the backup
 The Backing up Companies screen is displayed with the name of the company being backed up and
the percentage of backup completed.

WRITE SHORT NOTES ON RESTORE.

Restore means return to its original, usable and functional condition. [Link] 9 allows you to
restore data from one storage media to another. . However, it is advisable not to restore the backup on to the
original data directory, to avoid it from being overwritten.
The user must ensure the following points before restoring the data backup:
 Do not restore old or irrelevant data.
 Do not restore data from a damaged media.
 Do not restore data in the same folder as the existing data, since it may overwrite the existing
data.
To restore the back-up taken on another media, execute the following steps:
Go to Gateway of Tally > Press F3: Company Info Restore.
In the Restore Companies on Disk screen provide the following paths:
 Destination - is the folder where the backup data is restored.
 Source - is the folder which contains the backup data files, it can be a folder on the same device on
another device connected to the computer.
 Select the name of the company from List of Companies to restore the data. The user can select
one or more companies from the List of Companies to restore the data.
 Accept to continue restoring the data.
 The Restore Companies screen displays the status of data being restored.

WHAT IS OPEN DATABASE CONNECTIVITY (ODBC) AND WHAT ARE THE TWO TYPES OF
CONNECTIVITY THAT ARE USED IN TALLY?
With Open Database Connectivity you can dynamically exchange data between [Link] 9 and any
other application dynamically. You must ensure that MS-Query is installed on the computer in which you
will be installing [Link] 9. This enables ODBC as soon as [Link] 9 is installed.
The ODBC server is displayed on the information block of the information pane. Mostly two types of
connectivity used in tally. These are outward connectivity and inward connectivity.

TYPES OF CONNECTIVITY
1. Outward Connectivity
Using the outward connectivity feature of [Link] 9, you can transfer data between
programs without additional programming. The user can transfer data from [Link] 9 to Microsoft Word
or Excel.
Using the Outward Connectivity feature you can:
 Generate Labels from ledger addresses stored in [Link] 9
 Create templates for reports, forms and plug in up-to-date data from [Link] 9.
 It allows users to use popular programs in tally’s ODBC thereby giving them the flexibility to
create their reports with up-to-date data from Tally.
2. Inward connectivity
Inward connectivity integrates data from other systems with [Link] 9. With this feature
you can use data from other systems in [Link] 9 by creating an integrated system.
For example, a customer contact management program containing details like status of an
order and last contact made can be brought into [Link] 9 and merged into a report containing
outstanding balances. Changes made to the data are immediately reflected in [Link] 9.

*********** UNIT- V Completed ***********