Describe the various types of accounting software along with their advantages and limitations.
1) Ready to Use Software: A variety of readymade softwares is available in the market. These softwares are for users at large and are not developed according to the requirements of any specific user. Most popular readymade softwares available in the market is Tally, Ex. Busy etc.
| Advantages | Disadvantages |
|---|---|
|
1. These softwares are developed by a group of highly experienced group of professionals. |
1. These softwares use laser printers which are costly than the use of Dot Matrix Printers. |
| 2. Since these softwares are used by a large number of users, accounting personnel well versed with these software are easily available. | 2. The lwvwl of Secrecy in these software is very low thus the siftware is highly prone to frauds. |
| 3. They are easy to learn and their training is sometimes offered free by the vendor. | 3. These software offer very little scope of linking to other information systems. |
| 4. Because of their use by a large numbers of users, they have better after sales maintenance service. | |
| 5. Because they are available off-the-shelf , time required in developing a tailor made software is saved. | |
| 6. The cost of installation is low. |
2) Customised Software: The term 'Customised Software' means making changes in the ready to use Software so as to suit thespecific requirements of the user. Any readymade software can be changed according to the needs and specifications of the user. However, the cost of installation of Customised softwares are high because the cost of change is to be paid by the user.
| Advantages | Disadvantages |
|---|---|
| 1. These softwares are designed to suit the specific requirements of the users. | 1. Cost of installation and maintenance is higher in comparison to ready to use Software. |
| 2. Level of Secrecy for the data is higher. | 2. Training requirement for using these packages is higher in comparison to ready to use Software. |
| 3. Linkage to other information systems is available on the basis of need of the enterprise. |
3) Tailor-made Software: The term 'tailor-made software' means developing a software according to the needs and specifications of the user. These softwares are not available off-the-shelf.
| Advantages | Disadvantages |
|---|---|
| 1. It being developed sccording to the specifications of the user, takes care of the specific needs of the enterprise. | 1. If the accounts are grouped in an innocent manner, the results will be misleading. |
| 2. The level of secrecy of data and authenticity checks are robust in such softwares. | 2. The cost of development and maintenance of such software is much higher in comparison to readymade or customised software. |
| 3. It is difficult to lern and require specialised training. | |
| 4. Training costs are high since they involve sophisticated applications. | |
| 5. If someone leaves the job, it becomes very difficult for the new employee to be fully conversant with such software. |
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:-
State the different elements of a computer system.
- Q:-
What are the objectives of preparing financial statements ?
- Q:-
What is Accounting Information System?
- Q:-
Distinguish between debtors and creditors.
- Q:-
Voucher is prepared from:
(i) Documentary evidence
(ii) Journal entry
(iii) Ledger account
(iv) All of the above - Q:-
What are the possible reasons for keeping incomplete records?
- Q:- Explain the qualitative characteristics of accounting information.
- Q:-
Explain the factors, which necessitated systematic accounting.
- Q:-
Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when:
(a) When given inside the trial balance?
(b) When given outside the trial balance? - 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.
- NCERT Chapter