Define a computerised accounting system. Distinguish between a manual and computerised accounting system.
A Computerised Accounting System is that accounting information system that helps in processing the financial transactions and events as per the Generally Accepted Accounting Principles (GAAP) and leads to the generation of reports as per the requirements of the users.
An accounting system whether manual or computerised has two parameters, namely,
1) It has to follow the well defined concepts known as the accounting principles
2) It has to maintain the user-defined structure for maintained of records and generation of reports.
| Basis of Distinction | Manual Accounting |
Computerised Accounting |
|---|---|---|
| 1. Identifying Financial Transactions | In this system, identification of financial transactions is done manually by applying the principles of accounting. | In this system also identification of financial transactions is done manually by applying the principles of accounting. |
| 2. Recording | In this system, the recording of transactions in the books of original entry and related calculations such as adding, subtraction and totalling are done manually. | In this system, the recording of transactions i.e., storing of data in database is done manually and all other calculations are done by computers. |
| 3. Classification |
In this system, classification i.e., posting to ledger accounts is done manually. |
In this, the stored data are processed automatically by the software to give us ledger accounts. |
| 4. Summarising | In this system, summarising i.e., balancing of ledger accounts and the preparation of trial balance is done manually. | In this, transactions once recorded are stored in the database which will produce trial balance automatically. |
| 5. Adjustment Entries | The identification, recording and posting of adjustment entries is done manually. | In this, identification and recording of adjustment entries is done manually and their posting etc. is done by software. |
| 6. Financial Statements | In the manual process, preparation of trial balance is essential to produce the financial statements. | In this, financial statements are generated from the software itself and therefore there is no need to prepare a trial balance. |
Popular Questions of Class 11 Accountancy
- Q:- Explain the qualitative characteristics of accounting information.
- Q:-
Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.
From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner. - Q:- Describe the role of accounting in the modern world.
- Q:- What do you mean by an asset and what are different types of assets?
- Q:-
Differentiate between source documents and vouchers.
- Q:-
Complete the following sentences with appropriate words:
(a) Information in financial reports is based on .....................
(b) Internal users are the ..................... of the business entity.
(c) A ..................... would most likely use an entities financial report to determine whether or not the business entity is eligible for a loan.
(d) The Internet has assisted in decreasing the ..................... in issuing financial reports to users.
(e) ..................... users are groups outside the business entity, who uses the information to make decisions about the business entity.
(f) Information is said to be relevent if it is ......................
(g) The process of accounting starts with ............ and ends with ............
(h) Accounting measures the business transactions in terms of ............ units.
(i) Identified and measured economic events should be recording in ............ order. - Q:-
What is a journal? Give a specimen of journal showing at least five entries.
- Q:-
Define accounting and state its objectives.
- Q:-
Enumerate informational needs of management.
- Q:-
Complete the following work sheet:
(i) If a firm believes that some of its debtors may ′default′, it should act on this by making sure that all possible losses are recorded in the books. This is an example of the ___________ concept.
(ii) The fact that a business is separate and distinguishable from its owner is best exemplified by the ___________ concept.
(iii) Everything a firm owns, it also owns out to somebody. This co-incidence is explained by the ___________ concept.
(iv) The ___________ concept states that if straight line method of depreciation is used in one year, then it should also be used in the next year.
(v) A firm may hold stock which is heavily in demand. Consequently, the market value of this stock may be increased. Normal accounting procedure is to ignore this because of the ___________.
(vi) If a firm receives an order for goods, it would not be included in the sales figure owing to the ___________.
(vii) The management of a firm is remarkably incompetent, but the firms accountants can not take this into account while preparing book of accounts because of ________ concept.
Recently Viewed Questions of Class 11 Accountancy
- Q:-
What do you understand by ledger folio?
- Q:-
Find the correct statement:
(i) Credit a decrease in assets
(ii) Credit the increase in expenses
(iii) Debit the increase in revenue
(iv) Credit the increase in capital - Q:-
Explain the concept of cost of goods sold?
- Q:-
Briefly explain the term ‘favourable balance as per cash book’.
- Q:-
Which stakeholder group... would be most interested in
_____________________________ (a) the VAT and other tax liabilities of the firm
_____________________________ (b) the potential for pay awards and bouns deals
_____________________________ (c) the ethical or environmental activities of the firm
_____________________________ (d) whether the firm has a long-term future
_____________________________ (e) profitability and share performance
_____________________________ (f) the ability of the firm to carry on providing a
service or producing a product. - Q:-
Distinguish between debtors and creditors.
- Q:-
Define the purpose of maintaining subsidiary journal.
- Q:-
Discuss the concept-based on the premise do not anticipate profits but provide for all losses.
- Q:-
The periodic total of sales return journal is posted to :
(i) Sales account
(ii) Goods account
(iii) Purchases return account
(iv) Sales return account - Q:-
Distinguish between bill of exchange and promissory note.
- NCERT Chapter