Computerised Accounting System
- A computerised accounting system (CAS) refers to use of computers in performing accounting functions with the help of application softwares i.e. accounting softwares.
- It eliminates necessity to create and maintain journals and legers.
- The basic requirement of CAS are accounting framework and operating procedure. Operating environment is a framework of storage and processing of data in a computerised accounting system.
- Types of hardware and software selected depend on secrecy level, types of users, number of users etc.
- Computerised accounting has far superior features as compared to manual accounting in terms of recording of transactions, generation of reports, adjustment entries etc.
- However in both the systems identification of financial transaction is done by the accountant.
- Advantages of computerised accounting systems include high speed, accuracy, up-to-date information, automated document presentation, scalability, quality reports, etc.
- CAS has many limitations also like high cost of training, staff opposition, system failure, computer frauds and crimes, health problems etc.
- Database is an application that manages data and allows fast storage and retrieval of data, for example ORACLE & SQL SERVER. Database varies with basic requirements like front end i.e., Developer/2000, Visual Basic,etc., and back end interface i.e., Microsoft access, data processing i.e., segregating numbers into relevant groups, aggregating them, taking ratios, plotting, etc. and reporting system.
- Application of computerised accounting system includes Spread sheets, General ledger, Accounts receivable, Payroll software, etc.
- Automation of accounting process implies carrying out the accounting function by means of accounting software where human intervention is minimum.
- Stages of automation involve planning, selecting appropriate accounting software and hardware, preparing chart of accounts, grouping of accounts and generation of reports.
- Grouping of accounts refer to process of coding the accounts in a manner that they appear properly in financial statements.
- Process of grouping involves giving a code to each main head, sub-head and thereafter individual account heads.
- Financial reports can be classified as statutory reports and MIS Accounting software is the application software that records and processes accounting transactions within functional modules.
- It functions as an accounting information system and may be purchased from third party and developed in-house by the company.
- Accounting software packages classified into ready made software, customised software and tailor made software.
- Factors of sourcing accounting software are flexibility, cost of software, size of organisation, reputation of the vendor, fulfillment of business requirements, etc.
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The need of accounting software arises in-Marks:1
When the computerised accounting system is implemented to replace the manual system
The need of accounting software arises in that situation when the computerised accounting system is implemented to replace the manual system.
Accuracy and reliability areMarks:1
These are the advantages of computerized accounting system.
Advantage of computerized accounting system isMarks:1
Up-to date latest information
Computerised accounting system has two basic requirements:-Marks:1
Both a and b
Computerized accounting system has two basic requirements-
1. Accounting framework
2. Operating procedure
Computerised accounting system is based on the concept of:-Marks:1
It is totally based on database.