Exploring Stock Valuation Methods in Tally Prime for Precise Financial Insights

Costing Methods

Different Types of Costing Methods

At Zero Cost
Average Cost
FIFO (First in, First out)
FIFO Perpetual
Last Purchase Cost
LIFO Annual (Last-in, First-out)
LIFO Perpetual
Monthly Average Cost
Standard Cost

Types of Costing Methods

At Zero Cost:

At times, you may need to record transactions where there is no monetary cost involved.
No Impact on Financials

Average Cost:

Average Cost is one of the inventory valuation methods available in Tally.
It calculates the cost of items based on the average cost of all units in stock.

FIFO (First in, First out):

FIFO is one of the inventory valuation methods available in Tally.
It values inventory based on the assumption that the first items added to stock are the first to be used or sold.

FIFO Perpetual:

FIFO Perpetual constantly tracks the cost of inventory as it enters and leaves the stock.
This provides a real-time, up-to-date valuation of inventory.

LIFO Perpetual:

LIFO Perpetual is one of the inventory valuation methods available in Tally.
It values inventory based on the cost of the most recently acquired items.

Last Purchase Cost:

Last Purchase Cost is one of the inventory valuation methods available in Tally.
It values inventory based on the cost of the most recent purchase transaction for each item.

LIFO Annual (Last-in, First-out):

LIFO Annual is one of the inventory valuation methods available in Tally.
It values inventory based on the assumption that the most recently acquired items are consumed or sold first.

Monthly Average Cost:

Monthly Average Cost is one of the inventory valuation methods available in Tally.
It values inventory based on the average cost of items acquired during a particular month.

Standard Cost:

Standard Cost is one of the inventory valuation methods available in Tally.
It values inventory based on predetermined, fixed costs set for each item.

Stock Valuation Methods

Company Details

A1 Computer Accessories
Address	Commercial Complex, Hasthampatti, Valipalayam, Tiruppur, Tamil Nadu 641601
Mobile No	9784562132
Email	a1computeraccessories@gmail.com
Website	a1computeraccessories.in

Stock Item	Stock Valuation Method
HARD DISK CASE COVER	FIFO Perpetual
POWER BANK	FIFO Perpetual
SSD HARD DISK	LIFO Perpetual

Recording of purchase and sales Transactions

01-12-23 Purchased the following goods from Mohan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	100 Nos	2000
POWER BANK	100 Nos	3000
SSD HARD DISK	100 Nos	4000

05-12-23 Purchased the following goods from Shreenivasan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	50 Nos	1500
POWER BANK	50 Nos	2500
SSD HARD DISK	50 Nos	3500

06-12-23 Purchased the following goods from Shreenivasan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	10 Nos	1600
POWER BANK	10 Nos	2600

10-12-23 Sold the following goods to Ruthresh and the cash payment was made immediately by the customer.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	120 Nos	2500
POWER BANK	120 Nos	3500
SSD HARD DISK	40 Nos	4500

Create a New Company

Create a New Company:

Go to the Gateway of Tally.
Select "Create Company" or "Alt+ K" (exact wording may vary based on your version).

Enter Company Details:

Fill in the required company details in the "Company Creation" screen. For "A1 Computer Accessories," you can enter the following information:

Company Name: A1 Computer Accessories
Address: Commercial Complex, Hasthampatti, Valipalayam, Tiruppur, Tamil Nadu 641601
Mobile No: 9784562132
Email: a1computeraccessories@gmail.com
Website: a1computeraccessories.in

Configure Features (Optional):

You can configure additional features and settings based on your business requirements. This includes financial years, taxation details, etc.

Save and Activate:

After entering the details, press Enter to save the information.

Stock Groups

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Inventory Info:

Select "Inventory Masters" from the main menu.

Create Stock Group:

Under "Inventory Masters," choose "Stock Groups."

Create a New Stock Group:

Select "Create" (or use Alt + C as a shortcut) to create a new Stock Group.

Enter Stock Group Details:

Enter the following details for the Stock Group:

Name: Stock in Hand
Under: Choose the parent group if you have one or leave it as Primary.

Save the Stock Group:

Press Enter to save the Stock Group.

Units

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Inventory Info:

Select "Inventory Masters" from the main menu.

Create Units of Measurement:

Under "Inventory Masters," choose "Units of Measure."

Create a New Unit:

Select "Create" (or use Alt + C as a shortcut) to create a new unit.

Enter Unit Details:

Enter the following details for the unit:

Symbol: nos
Formal Name: Numbers
Number of Decimal Places: Enter the appropriate number of decimal places (usually set to 0 for whole numbers).

Save the Unit:

Press Enter to save the unit.

Stock Item

Stock Item	Stock Valuation Method
HARD DISK CASE COVER	FIFO Perpetual
POWER BANK	FIFO Perpetual
SSD HARD DISK	LIFO Perpetual

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Inventory Info:

Select "Inventory Masters " from the main menu.

Create Stock Items:

Under "Inventory Masters," choose "Stock Items."

Create Stock Item for HARD DISK CASE COVER:

Select "Create" (or use Alt + C as a shortcut) to create a new stock item.
Enter the following details:

Name: HARD DISK CASE COVER
Under: Select the appropriate stock group or leave it as Primary.
Units: Choose the unit of measurement (e.g., nos for numbers).
Stock Valuation Method: FIFO Perpetual

Activate Costing Methods:

After specifying the stock valuation method, set "Use Costing" to "Yes" and "Activate Costing Methods" to "Yes."

Press Enter to save.

Create Stock Item for POWER BANK:

Create another stock item for POWER BANK following the same steps, but with the following details:

Name: POWER BANK
Under: Select the appropriate stock group or leave it as Primary.
Units: Choose the unit of measurement (e.g., nos for numbers).
Stock Valuation Method: FIFO Perpetual
Press Enter to save.

Create Stock Item for SSD HARD DISK:

Create a third stock item for SSD HARD DISK with the following details:

Name: SSD HARD DISK
Under: Select the appropriate stock group or leave it as Primary.
Units: Choose the unit of measurement (e.g., nos for numbers).
Stock Valuation Method: LIFO Perpetual
Press Enter to save.

Recording of purchase and sales Transactions

01-12-23 Purchased the following goods from Mohan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	100 Nos	2000
POWER BANK	100 Nos	3000
SSD HARD DISK	100 Nos	4000

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Vouchers:

Select "Vouchers" from the main menu.

Select Purchase Voucher:

From the "Vouchers" menu, choose "F9: Purchase" or navigate to "Voucher Entry" and select "Purchase."

Enter Voucher Details:

Set the voucher date to January 12, 2023.

Enter Party Details:

In the "Party A/c Name" field, enter "Cash."

Enter Stock Item Details:

Enter the details for each stock item:

Stock Item 1 (HARD DISK CASE COVER):

Qty: 100 Nos
Rate: Rs. 2000 per unit

Stock Item 2 (POWER BANK):

Qty: 100 Nos
Rate: Rs. 3000 per unit

Stock Item 3 (SSD HARD DISK):

Qty: 100 Nos
Rate: Rs. 4000 per unit

Enter Accounting Details:

Specify the ledger accounts for cash payment and other relevant details.

Save the Voucher:

Press "Ctrl+A" to save the voucher.

05-12-23 Purchased the following goods from Shreenivasan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	50 Nos	1500
POWER BANK	50 Nos	2500
SSD HARD DISK	50 Nos	3500

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Vouchers:

Select "Vouchers" from the main menu.

Select Purchase Voucher:

From the "Vouchers" menu, choose "F9: Purchase" or navigate to "Voucher Entry" and select "Purchase."

Enter Voucher Details:

Set the voucher date to December 5, 2023.

Enter Party Details:

In the "Party A/c Name" field, enter "Cash."

Enter Stock Item Details:

Enter the details for each stock item:

Stock Item 1 (HARD DISK CASE COVER):

Qty: 50 Nos
Rate: Rs. 1500 per unit

Stock Item 2 (POWER BANK):

Qty: 50 Nos
Rate: Rs. 2500 per unit

Stock Item 3 (SSD HARD DISK):

Qty: 50 Nos
Rate: Rs. 3500 per unit

Enter Accounting Details:

Specify the ledger accounts for cash payment and other relevant details.

Save the Voucher:

Press "Ctrl+A" to save the Purchase Voucher.

06-12-23 Purchased the following goods from Shreenivasan and the cash payment was made immediately.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	10 Nos	1600
POWER BANK	10 Nos	2600

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Vouchers:

Select "Vouchers" from the main menu.

Select Purchase Voucher:

From the "Vouchers" menu, choose "F9: Purchase" or navigate to "Voucher Entry" and select "Purchase."

Enter Voucher Details:

Set the voucher date to December 6, 2023.

Enter Party Details:

In the "Party A/c Name" field, enter "Cash."

Enter Stock Item Details:

Enter the details for each stock item:

Stock Item 1 (HARD DISK CASE COVER):

Qty: 10 Nos
Rate: Rs. 1600 per unit

Stock Item 2 (POWER BANK):

Qty: 10 Nos
Rate: Rs. 2600 per unit

Enter Accounting Details:

Specify the ledger accounts for cash payment and other relevant details.

Save the Voucher:

Press "Ctrl+A" to save the Purchase Voucher.

10-12-23 Sold the following goods to Ruthresh and the cash payment was made immediately by the customer.

Stock Item	Quantity	Rate
HARD DISK CASE COVER	120 Nos	2500
POWER BANK	120 Nos	3500
SSD HARD DISK	40 Nos	4500

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Vouchers:

Select "Vouchers" from the main menu.

Select Sales Voucher:

From the "Vouchers" menu, choose "F8: Sales" or navigate to "Voucher Entry" and select "Sales."

Enter Voucher Details:

Set the voucher date to December 10, 2023.

Enter Party Details:

In the "Party A/c Name" field, enter "Cash."

Enter Stock Item Details:

Enter the details for each stock item:

Stock Item 1 (HARD DISK CASE COVER):

Qty: 120 Nos
Rate: Rs. 2500 per unit

Stock Item 2 (POWER BANK):

Qty: 120 Nos
Rate: Rs. 3500 per unit

Stock Item 3 (SSD HARD DISK):

Qty: 40 Nos
Rate: Rs. 4500 per unit

Enter Accounting Details:

Specify the ledger accounts for cash received and other relevant details.

Save the Voucher:

Press "Ctrl+A" to save the Sales Voucher.

REPORTS

Stock Summary

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Stock Summary:

From the "Gateway of Tally," select "Reports" or press Alt + G.

Select Stock Summary:

In the "Reports" menu, choose "Stock Summary."

Stock Group Summary

Stock Item Vouchers

Go to Gateway of Tally:

Navigate to the "Gateway of Tally."

Access Stock Summary:

From the "Gateway of Tally," select "Reports" or press Alt + G.

Select Stock Summary:

In the "Reports" menu, choose "Stock Summary."
Press Alt+ N to enable the "Auto Repeat Columns" option.

Stock Item Vouchers

Costing Methods Calculation

FIFO Perpetual

Hard Disk Case Cover

First Purchase details (01-12-2023): 100 * 2000 = Rs. 2,00,000
Second Purchase details (05-12-2023): 50 * 1500 = Rs. 75,000
Third Purchase details (06-12-2023): 10 * 1600 = Rs. 16,000

After Sales Transaction:

First Purchase details: Total Quantity is sold
Second Purchase details: 30 Remaining - 30 * 1500 = Rs. 45,000
Third Purchase details: 10 Remaining - 10 * 1600 = Rs. 16,000

Therefore, the total stock value of Hard disk case cover is 61,000 as per FIFO Perpetual.