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Computerized Accounting-
Assignment-1:(28.10.2024)
Long –Question:
Q-1.Briefly Explain The Computerized Accounting And Explain Feature Of
Computerized Accounting?

Answer:

I. A computerized accounting system is a software program that uses a database

to process financial transactions and produce reports for a business. It can be
stored on a company's computer, network server, or accessed remotely via the
internet.
II. Maintain the Account By Computer Software.
III. Computerised accounting may be defined as the process of maintaining
accounts within a computerised environment.

CHARACTERISTIC / FEATURE OF COMPUTERISED ACCOUNTING:

The following are the features of computerised accounting:
1.) Simple and Integrated:
Computerised accounting system provides a platform that integrate all major operations
of the business-like purchase, sales, finance, inventory, human resource and
manufacturing.

2.) Speed:
In comparison to manual accounting system, computerised accounting system can
record and perform accounting work at a higher speed.

3.) Accuracy:
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Computers are known as GIGO i.e. garbage in garbage out. As everything is done
through programme, high degree of accuracy can be achieved.

4.) Reliability:
Computers are used to process large volumes of data and hence, data provided by it are
reliable.

5.) Versatility:
Computer accounting software have the ability to perform diverse tasks. For example,
by simply recording accounting entries through accounting software, one can get trial
balance, trading account, profit and loss account, balance sheet and it provide accurate
reports.

6.)Transparency: In computerised accounting, the organisation will have greater

transparency of day-to day business operations and access to the vital information.

7.) Scalability:
Computerized accounting software enables processing of any volume of data in tune
with the change in the size of the business

8.) On-line Facility:

Computerized accounting offers online facility to store and process transaction and data
so as to retrieve information to generate and view financial reports in any part of the
world.

9.) Security:
In Computerised accounting only the authorised user are permitted to have access to
accounting data. but under manual accounting system, it is very difficult to secure such
information is open to dealing by any person with the books of account.
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Q-2.What Are The Advantages And Disadvantages Of Computerized

Accounting?
Answer:

Advantages Of Computerised Accounting:

1.) Automation:
All the calculation are handle by the computerised software and computerised
accounting eliminates many of the Mundane (Boring) and time consuming process
compared with manual accounting.

for example if onece make invoices are proceed automatically thus saving time.

2.) Operating Cost:

Computerized system is a reliable and time-saving device. The volume of job handled
with the help of computerized system results in economy and lower operating costs.
The overall operating cost of this system is low in comparison to the manual system.

3.) Quality:
Quality: The use of computerised accounting system are usually neat, accurate and
more legible than a manual account..

4.) Efficiency:
This system need more efficient person in comparison to the manual system. The
computer makes speed and accuracy in preparing the records and create accounts and
thus, increases the efficiency of employees.

5.) Accuracy:
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This accounting system is designed to be accurate to the minutest detail. Once the data
is entered into the system, all the calculations, including additions and subtractions, are
done automatically by software.

6.) Standardization:
Computerised accounting follows a proper way of accounting routines and procedures.
Therefore, it provide standardization accounting records.

7.) Speed:
Accounting data is processed faster by using a computerized accounting system than it is
achieved through manual efforts because computers are require less time performing a
task than human beings..

8.) Security:

Computerized accounting systems allow users to store their data in one central location.
Thus, even if you lose a paper having valuable information, there is no risk of the
information being stolen. Data is stored in a centralized location.

Dis-Advantages Of Computerised Accounting:

1.) Unemployment:
The introduction of computers in accounting work reduces the number of employees in
an organization. Thus, it leads to greater amount of unemployment.

2.) Uneconomical:
A small firm cannot install a computer accounting system because of its high installation
and maintenance cost. To be more economical there should be large volume of work. If
the system is not used to its full capacity, then it would be highly uneconomical.
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3.) Special Skills:

Computer system required for highly specialized operators. The availability of such
skilled personnel is very scarce and very costly.

4.)Cost:
The sophisticated computerised accounting packages generally require specialised skill
staff. As a result, huge training costs are incurred to understand the use of software tool
and feathres in use of computerised accounting systems.

5.) System Failure:

The danger of the system crashing due to hardware failures and the subsequent loss of
work in computerized accounting system. However,it providing a back-up arrangements
to stop the system crashing. Software damage and failure due to attacks by viruses.

6.) Fraud:
Accounting software data requires extra levels of security to prevent fraud. Software
makes it easier for users to alter data & making fraud easier to data transfermation.

7.) Health Issues:

The extensive use of computers systems can create some various health problems: bad
backs, eyestrain, muscular pains, etc. It causes increased the medical expenditure on
staff.

Q-3.Distinguish / Difference Between Computerized Accounting And Mannual

Accountng System ?

Basis Manual Accounting Computerized Accounting

Meaning Manual Accounting is a Computerized Accounting is an
system of accounting that accounting system that uses an
uses physical registers and accounting software for
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account books for keeping recording financial transactions

financial records. electro-nically.

Recording Recording is possible Recording is possible through

through book of original computerised data base or
entry. vouchers.
Calculation All calculations are to be All calculations are performed by
done manually. computer system.

Speed Comparatively slow Fast

Accuracy Accuracy depends upon the Relatively higher accuracy is
sincerity of accountants. expected.

Rectification of errors Errors made can be rectified Rectifications can be made by

through adjustment or altering the original wrong
rectification entries. entries.

Data Backup There is no provisions of There is provisions of huge data

huge data storage and storage and backup facilities.
backup facilities.

Processing Transactions once recorded Transactions once recorded can

can be summarised and be processed immediately within
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processed manually so it fraction of second automatically.

takes huge time.

Security Physical safe keeping or Records can be secured with the

Manual account system help of digital security and
records depends upon the password.
lock and key.

Short –Question:
Q-1.What is the definition of Computer?
Answer:

A computer is an electronic device which takes raw data as input with the help of set of
instruction it gives desired output. It has the ability to store, retrieve, and process data.

Q-2.What is the definition of Accounting?

Answer:

Accounting is the art of recording, classifying and summarizing in a significant

manner in terms of money, transactions and events which are in part at least of
a financial character and interpreting the results.

Q-3. What is the definition Computerized Accounting?

Answer:

I. A computerized accounting system is a software program that uses a database

to process financial transactions and produce reports for a business. It can be
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stored on a company's computer, network server, or accessed remotely via the

internet.
II. Maintain the Account By Computer Software.