The accounting for a small firm might be as simple as an excel spreadsheet. The chapter introduces the students of Class 11 about the importance and the function of computer-based calculations, which is very beneficial in the business world. 7) Ill-effects on Health: Continuous use of the computer systems for long hours leads to various health problems such as back issues, eyestrain, muscular pain, etc. 4 0 obj
This point too needs to be well read by the students as questions may arise from these sections. They should know what to write when this question appears in the exam. This is an emerging study that is to be well acknowledged and understood by the student. These limitations are as given below; Every Computerized Accounting System is implemented to perform the accounting activity (recording and storing of accounting data) and generate reports as per the requirements of the user. These systems help in setting up various income and expense accounts, and handle the large amount of data. Customized software is suited for large and medium businesses and can be linked to the other information systems. Accounting, by definition, is the process of identifying, recording, classifying and summarizing financial transactions to produce the financial reports for their ultimate analysis. 
UNIX environment allows multi-users compared to Windows. This drastically affects the efficiency with which the accounting staff can work, and also increases their medical expenditure. Further, the selection of hardware is dependent upon various factors such as the number of users, level of secrecy and the nature of various activities of functional departments in an organization. This factor involves the availability and design of various reports expected from the accounting software, the data entry, the flexibility between the multiple users, etc. The requirement of MIS reports, and the extent to which they are required also affects the choice of accounting software. This is because the system contains data handling and inbuilt checking features. The legal reporting requirements in a given country and the business needs affect the software contents. Due to this, the organisation conducts special training of their staff. 
COTS (commercial off-the-shelf) software is the most widely used accounting software in the world. 1 0 obj
The NCERT Solutions are helpful to understand the chapter with great perfection. b) When the new computerised accounting system is required as a replacement to an existing computerised accounting system because of changing needs of the organisation. In a computerised accounting system, the data is displayed using standardised fonts. This means that the choice of the accounting software would depend upon the requirement and suitability to the organisation. x[oGn?53}X,8d7Hw(X(w=5 RtWWWzU#~s87c{?__|eqww?yo-->>|_-BrkE#/ R"y#_EL}M:g
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F 5j9R#}p@Bk89hL P0l/_\v-n]4?|6+`-aTrhEtuY+MHLHya#EVW>K;oM]f-H6%+Jg$?T* Ready-to-Use accounting software is suited to organizations running small/conventional business where the frequency or volume of accounting transactions is very low. This chapter is new, hence they might fall off track, these revision notes will not allow me to do the same. The revision notes will keep them on track with the revising strategy. This facilitates efficient decision-making and report generation. Such software is suitable for medium and large businesses, can be linked to other information systems, and can be modified. MS Word, MS Excel, etc. The accounting database is well-organized with active interface that uses accounting application programs and reporting system. 1. A computerised accounting system is resisted by the existing accounting staff, because they fear that the computerised accounting system, being much better than manual accounting, would eliminate the need of the existing accounting staff, and their roles would reduce to being a data entry operator. In a computerized accounting system, the framework of storage and processing of data is calledoperating environmentthat consists of hardware as well as software in which the accounting system, works. Despite the several advantages of computerised accounting systems, it also has some limitations that emerge from the operating environment. What do you mean by manual accounting systems? Before the exam, they can only revise this chapter and focus more in the practical chapters by investing less time in this chapter. The type of accounting software to be sourced also depends upon the size of the organisation. Before sourcing an accounting software, various factors need to be considered. When an organisation switches from a manual accounting system to a computerised accounting system, a lot of working hours are lost because of the changes in the working environment. #Y14_P5xrF@LO'N+STdEc50YcUl3>7fZ`0K{A)B(d#%F This drastically affects the efficiency with which the accounting staff can work, and also increases their medical expenditure. Computerized accounting software aids organizations in managing large financial transactions, data, reports, and statements with more efficiency, speed, and accuracy. 2. @'tG \^$1%- FQ(9qnt@J=`zcC7K88*R kyRD"?q7GCa>;H:5v$(,j\5"P[0`{PVE?PcX@ 9H @`&^
KH nKbpbBJULVrTYm8pLQ$x%(ZJ@q+7d^BA'mu3.&ME3-j!%3#o@E_iN H'=UN8BIdFe--%_KS'z3 X{0!du@Q`%B!Ae6:`OVe$CuxH$G`l^_RTz The type of software determines the structure of the hardware. It is even possible to emulate the legitimate user of a system, or discover his password through trickery, and thus gain access to the entire accounting information. 4. When accounting data is entered into the computerised accounting system, the effect is recorded in all the corresponding accounts and transactions automatically. This is the ideal billing application for you if you operate a small business. Accounting Packages - This topic is also very important; they need to know the packages related to each software. 7. A large amount of data can be stored in a computerised accounting system within a small physical space. Similarly, an accounting software can appear expensive, but might involve very less installation and maintenance costs, making it a more feasible option. A computerised accounting system needs trained staff. This is a new research project that the student should be aware of and comprehend. From our portal itself students can get the access of free pdfs of the NCERT solutions. : This is the data storage system which cannot be accessed by the user. In tailored software for large businesses, the user rights may be restricted to purchase vouchers for the purchase department, sales vouchers to the billing accountants and petty cash module access with the cashier. Variety of accounting software is available in the market. To learn more, view ourPrivacy Policy. For storing additional vouchers, the only requirement is to introduce more data entry operators. They are interconnected through a wide network of computers, such that the information is available and accessible to multiple users simultaneously. : This requirement involves a sequence of actions that need to be taken such that the data can be transformed into useful information. Enter the email address you signed up with and we'll email you a reset link. The training needs are simple and sometimes the vendor (supplier of software) offers the training on the software free. Academia.edu no longer supports Internet Explorer. 3. The ease of adaptation and the training required to use a software also impacts the choice of the accounting software. The user should be able to run the software on variety of platforms and machines, e.g. The MIS reports and the degree to which they are used in the organization also determine the acquisition of software. The operating procedure should be well-defined, and it should be suitably blended with the organisations operating environment.
Physical records, pads of paper, and books are used in manual accounting systems when transactions are manually recorded. This is because the system contains data handling and inbuilt checking features. 3 0 obj The software should enable the user to directly transfer the database from one system or software to another. A computerized accounting system is an accounting information system that processes the financial transactions and events as per Generally Accepted Accounting Principles (GAAP) to produce reports as per user requirements. There are numerous techniques in which the data or programmes can be altered for fraud or embezzlement. An accounting information system which is used for processing financial transactions in accordance with the accounting principles is called a computerised accounting system. % 3. Customised software is the software which is customised for some special requirements of the user. %as= U$HsRU(c!6:L" 6L0' Privacy Policy, Trial Balance And Rectification Of Errors, Accounting System Using Database Management System. A manual accounting system is a bookkeeping system for documenting business activity transactions that do not include the use of specialist accounting software on a computer system. Academia.edu uses cookies to personalize content, tailor ads and improve the user experience. The user can interact with the front-end interface to communicate with the back-end database. The same data is used to prepare the accounts and make the reports. However, the choice of the accounting software would depend upon the suitability to the organization especially in terms of accounting needs. This is because the cost of installation is generally low and number of users is limited. N%TW(K. Concept of Computerised Accounting System, Generally, each computerised accounting system has two. Vedantu provides this chapter's capsuled revision notes, which will aid students in reviewing the material. Calculations are performed automatically by the accounting software. Various upgrades are required as well to keep the systems updated. Students may easily download the free PDF from Vedantu and use these review notes to improve their preparation level. This results in a great cost to the organisation. Another important consideration is the reputation and capability of about, This depends upon how long has he been the vendor is in business of software development, whether there are other users of the software and. : The reporting system is an integrated set of various objects that form the report using the information. Adjusting entries are made for rectification of errors. Configuring SAP ERP Financials and Controlling, Financial Accounting in Practice: Practical Questions and Answers for Students, Library of Congress Cataloguing in Publication Data, , , BQOE III FUNDAMENTALS OF ACCOUNTING AND FINANCE. Hardware and software become outdated in years, and sometimes even in months due to the constant improvement in technology. This means that the computer updates the existing accounting records as soon as the new data is entered and stored into the system. The user can interact with the front-end interface to communicate with the back-end database. PE/YbV&;t151*7uxJ@ >'r . If the organisation requires cost records as well, then the software needs to be customised as per the requirements. Also, it should offer some flexibility between the users of the software, the switch over between the accountants (users), operating systems and the hardware. Hence to achieve the same students of standard 11 are guided by us in this revision material. Advantages of Computerized Accounting System. Adjusting entries cant be made for rectification of errors. Small organizations, e.g. The following factors are usually taken in considerations before sourcing accounting software. However, this software offers little scope of linking to other information systems. Sometimes, certain software which appears cheap to buy, involve heavy maintenance and alteration costs. 7) Scalability: The Computerised system can process and store a large amount of data. Students can access the notes provided by Vedantu anywhere and anytime as per their convenience. 3. The accounting software should be able to run on a wide variety of machines and systems, such as on Linux. stream Accounting databases contain an active interface which enables the user to use various accounting application programs and reporting systems. They can perform certain tasks in fractions of a second. Due to this, the organisation conducts special training of their staff. 9. 2) Staff Opposition: A computerised accounting system is resisted by the existing accounting staff, because they fear that the computerised accounting system, being much better than manual accounting, would eliminate the need of the existing accounting staff, and their roles would reduce to being a data entry operator. The factors that need to be considered before sourcing an accounting software are as follows: The flexibility of an accounting software is an important consideration before sourcing it. The students can easily download the free pdf given by us and enhance their preparation level with these revision notes. 8) Legibility: In a computerised accounting system, the data is displayed using standardised fonts. It is even possible to emulate the legitimate user of a system, or discover his password through trickery, and thus gain access to the entire accounting information. endobj Every computerized accounting system has two basic requirements; Suitably with the operating environment of the organization. nLOU The computerised accounting system helps in generating true accounting reports that are highly reliable. Unanticipated errors cannot be detected because the computers lack the capability to judge. It responds and provides the user with the required data depending upon the extent of authority to access. The customization includes modification and addition to the software contents, provision for the specified number of users and their authentication, etc.
It is automatically prepared and is provided at just a click of a button. Thus, it saves a large amount of physical space while storing a higher amount of data as compared to manual accounting systems. <>>> Students may easily download the free PDF from Vedantu and use these review notes to improve their preparation level. Both hardware and software are interdependent. Data is recorded in the customised database of the software. An organisation needs to consider these factors and choose the suitable accounting software as per their requirements. The level of secrecy is an important factor to consider because cheap accounting software is usually obtained at the cost of secrecy. The need to acquire an accounting software arises in the two cases stated below: a) When the computerised accounting system is implemented as a replacement to an existing manual accounting system. By using our site, you agree to our collection of information through the use of cookies. Students qualifying with good marks in the Class 11 exams have a higher perspective to score even a higher percentage in the Class 12 boards exam. 3) Disruption: When an organisation switches from a manual accounting system to a computerised accounting system, a lot of working hours are lost because of the changes in the working environment. endobj 8) Obsolescence: A major limitation of computer systems is obsolescence. There are many types of accounting software, one among them is Commercial off-the-shelf software. ;9-W~}(=_rt0 ^{% ,EWP]U0<6s1jImr|R1xE":EaEC$88zEVR:-Sq%WbLb.$YQXxFqC#W],J 4]Za_L_/"h]{B From Where we will get the NCERT Solutions? A simple guideline to take such a decision is the cost benefit analysis of the available options and the financing opportunities available to the firm. 9) Efficiency: Computerised accounting system ensures an optimum and efficient use of time and resources. In computerised accounting, the chance for an error to occur is eliminated because the data used is entered only once, that is at the very beginning. The transfer of database to other systems or software is sometimes expected from the accounting software. The Computerised system can process and store a large amount of data. Computerized accounting systems increase inventory control and payment collection, saving time and boosting cash flow, thanks to their efficiency and ease of use. The computer system can perform repetitive operations without tiredness, boredom, or fatigue, and are thus, more reliable than human beings. The following table compares the manual accounting system to the computerised accounting system. For producing simplified financial statements, cash flows, and ratio analysis, a ready-to-use software is good enough. Accounting, generally is a subject of calculations, more than theory students here practice the sums, which is very unusual to this chapter, where theory questions are asked too hence the students might have a tendency to ignore this chapter, then they can refer to these capsuled notes to prepare for their exams. This type of software is generally used by large and medium sized business enterprises. The operating system also affects the security of the system. They are stored on a computer, network server, or remotely via the Internet. a"Z:F2?2]m,}rvLN8@&JV Hardware and software become outdated in years, and sometimes even in months due to the constant improvement in technology. Continuous use of the computer systems for long hours leads to various health problems such as back issues, eyestrain, muscular pain, etc. The solutions are very standard and hence must be studied by the students. Another consideration before buying accounting software is the security features, which prevent unauthorized personnel from accessing and/or manipulating data in the accounting system. The computer system can perform repetitive operations without tiredness, boredom, or fatigue, and are thus, more reliable than human beings. Due to this, the organisation conducts special training of their staff. : This acts as a link between the user and the software. An important consideration before sourcing accounting software is flexibility, viz. Generic Considerations - This point too needs to be well read by the students as questions may arise from these sections. 3) Reliability: Reliability refers to the ability with which computers serve the users.
This is a serious issue to be considered when using a computerised accounting system. This makes a computerised accounting system highly scalable. For example: Transferring information from ledger to spreadsheet software. However, some other complex software packages linked to other information systems require intensive training on a continuous basis. The training required to use such software is simple. Computerised accounting refers to the system of accounting in which financial records are maintained electronically using an accounting software. \RFvA %ofK/!>XEdUN]Y0I&4[r\mB7 The computerised accounting system processes data at a much faster speed and requires far less time than human beings to perform a task. Limitations of Computerised Accounting System. 5) Inability to Check Unanticipated Errors: The error detection system in the computerised accounting system is designed to detect and check known and anticipated errors. Organizations may need to transfer information directly from the ledger into spreadsheet software such as Lotus or Excel for more flexible reporting. 4. Every accounting system, manual or computerized, has two aspects. In UNIX, the user cannot make the computer system functional unless the user clicks with a password, which is not a restriction in Windows. 6) Breaches of Security: There are numerous techniques in which the data or programmes can be altered for fraud or embezzlement. Accounting pages feature four or more printed columns and numerous rows for the essential information, such as date, description, and monetary amounts, with natural divides. It may be observed that conceptually, the accounting process is identical regardless of the technology used. The user operates on such database using the required and desired interface and also takes the desired reports by suitable transformations of stored data into information. 2. Since the need to train the software users is important, the training costs are therefore high. The students should solve this NCERT guide as they are already solved by the experts and also this is the standard guide for the students. Accounting software is used to gather information about a company's financial sustainability and to report on it. 5) Inability to Check Unanticipated Errors: The error detection system in the computerised accounting system is designed to detect and check known and anticipated errors. Tailored software is suitable for large business organisations which are spread out over a large geographical area. The computerised accounting system assists the management in effective control and monitoring of the business by enabling real time production of reports related to management information. First, it has to work under a set of well-defined concepts calledaccounting principles. In some ready to use accounting softwares, the exporting, importing facility is available but is limited to MS Office modules only, e.g.