CBSE Class 11 Accountancy Revision Notes Chapter 12

CBSE Class 11 Accountancy Revision Notes Chapter – 12 Applications of Computers in Accounting 

Chapter 12 of Class 11 Accountancy curriculum introduces students to the applications of computers in Accounting. Computers are an essential part of our lives and they are used almost everywhere to make processes more effective and efficient. The same goes for accounting. In this chapter, students will learn about the different components of computers, which will serve as an introduction to computerised accounting systems that are discussed in the next chapter.

To help students with their preparation for this chapter, Extramarks offers CBSE Class 11 Accountancy Revision Notes Chapter 12 Application of Computers in Accounting. These are clear and concise notes that summarise all the important concepts covered in the chapter so that students don’t have to read the entire chapter during the revision before their exams. These Revision Notes are available for download on the Extramarks’ website. 

Revision Notes for CBSE Class 11 Accountancy – Chapter 12 – Free Download

Class 11 Accountancy Chapter 12 Revision Notes

A computerised accounting system is simply a mix of hardware and software components that together help manage, create, and present the financial information of an organisation. It keeps track of all the financial transactions of the business, organises it into their respective accounts, and finally creates automated reports and financial statements for stakeholders and decision-makers to make informed decisions.

Capabilities of Computer System

The capabilities of a computer system include Speed, Accuracy, Reliability, Versatility, and Scalability.

• Speed: A computer is no doubt much faster in processing financial transactions or any other information for that matter as compared to humans. This results in tremendous efficiency.
• Accuracy: A computer is less prone to errors as compared to humans.
• Reliability: A computer is immune to tiredness, boredom, or fatigue unlike humans, which makes computerised accounting systems much more reliable.
• Versatility: A computer can handle many versatile tasks related to an accounting system with ease. It can record transactions, organise them into accounts, create MIS reports and much more.
• Scalability: Today the scale at which some companies operate is only possible because of technology. Handling the accounting of such global giants is only possible because of computerised systems that can scale quite easily.

Limitations of a Computer System

A computer performs a task better than humans in many areas, but it has limitations such as a lack of common sense, zero IQ, and decision-making power. A computer system blindly follows the instructions without analysing the consequences. The machine is incapable of thinking or making decisions. It lacks intelligence, knowledge, and wisdom.

Components of a Computer

A computer comprises the functional components, including the Input Unit, Central Processing System, and Output Unit. 

Input Unit: The input Unit controls the input devices that receive data, the examples being the keyboard and mouse.

Central Processing Unit (CPU): The CPU instructs the data to enter the system, places the data into the memory, and receives the data when required. The CPU is also responsible for data output. Three main segments of the CPU in a computer system are the Arithmetic and Logic Unit, Memory Unit, and Control Unit.

Output Unit: The CPU has an output device called a monitor that translates the data from machine language to human language.

Evolution of Computerised Accounting

The computerised accounting system has gradually evolved, considering high speed, storage, and processing capability. It is essential to provide real-time data to align with the complex transaction process. TPS (Transaction Processing System) has become highly significant to support substantial business operations to use loads of information without hassle. In recent times, many devices have automated the input processes.

Transaction Processing System (TPS)

TPS is one of the earliest computerised systems invented to meet the business requirements of larger enterprises. It records, processes, validates and stores multiple transactions. A Transaction Processing System follows the steps given below while processing a transaction. These include data entry, validation, processing and revalidation, reporting, storage, information etc. 

Features of Computerised Accounting System

The features of a computerised accounting system are:

• It can input the accounting data online and stock for further processing.
• Sales and purchase invoices are printable.
• The system assigns a unique code to each account and transaction.
• The accounting system can provide instant management reports, including the ageing statement, stock statement, trial balance, profit and loss account, balance sheet, GST returns, stock valuation, payroll report, etc.

Management Information System (MIS)

MIS stands for Management Information System. It provides the necessary information to make decisions and manage a business firm with efficacy. The system facilitates a company’s long-term objectives and works on multiple levels of management, for example, operational, strategic, and tactical levels.

Accounting Information System (AIS)

AIS refers to the Accounting Information System which identifies, collects, and processes financial information about a company and spreads the data to the users as needed. The system can make appropriate decisions using the data. The AIS is a part of the Management Information System.

Designing of Accounting Reports

A report sums up the data to meet the specific needs of enterprises. The content and design of the data influence the decisions made by a company. The accounting report needs to be informative for the users to ensure a smooth decision-making process. 

The accounting reports must have relevance, accuracy, completeness, and punctuality.

The reports are mostly summary reports, demand reports, exception reports, customer reports, or responsibility reports.

Data Interface between the Information Systems

The AIS is an integral part of the Management Information System. It receives and circulates information to the other MIS. The data interface relationship between various components and subcomponents of a Management Information System can be of different types as follows:

1. Accounting Information System, Manufacturing Information System, and Human Resource Information System
2. Accounting Information System and Manufacturing Information System
3. Marketing Information System and Accounting Information System

Class 11 Accountancy Chapter 12 Revision Notes

Chapter 12 explains the application of computers in accounting. Students learn about how computers contribute to the calculation and maintaining accounting records. CBSE Revision Notes for this chapter provided by Extramarks help the students to study the concept in-depth and score well in the examination while saving a lot of their time and energy.

Accountancy needs frequent revisions. Students might forget the lessons if they do not revise the chapters consistently. A quick read of CBSE Revision Notes right before the exam will give students the confidence to score well.

Topics Included in Revision Notes

The topics included in the revision notes are:

• Meaning and Elements of Computer System
• Capabilities of Computer System
• Limitations of Computer System
• Components of Computer
• Evolution of Computerised Accounting
• Transaction Processing System
• Features of Computerised Accounting
• Management Information System
• Accounting Information System
• Designing of Accounting Reports
• Data Interface Between the Information System
• Accounting Information System
• Manufacturing Information System

Key Takeaways of the Revision Notes and Few Suggestions for the Students 

1. Meaning and Elements of Computer System
2. Capabilities of a Computerised Accounting System
3. Transaction Processing System
4. Features of Computerised Accounting System

Computerised Accounting Systems is a very important chapter when it comes to how accounting is actually applied in today’s day and age. A thorough reading of this chapter will give students a practical understanding of Accounting Systems. This knowledge will prove to be very useful when students start their careers in the future.

Why these Revision Notes?

1. Students can understand the chapter with clarity.
2. They can assess their preparation and performance on their own.
3. Students do not need extra study support.
4. The revision notes help the students complete the syllabus and work hard on their weaker sides.

NCERT Solutions Chapter 12 Class 11 Accountancy Revision Notes

Apart from Revision notes, Students can also find detailed solutions to the end-of-chapter exercises for Chapter 12 of their Class 11 Accountancy textbook on the Extramarks’ website. These solutions will help students solve these exercises and cross-check their own understanding. The solutions can be accessed anytime by students.