CBSE Class 11 Accountancy Revision Notes Chapter 13

CBSE Class 11 Accountancy Revision Notes- Chapter 13 Computerised Accounting System

The previous chapter introduced students to computers and the different applications computers have in accounting. Building on the previous chapter, Chapter 13 of Class 11 Accountancy curriculum introduces students to computerised accounting systems, their benefits and limitations. Since the concepts covered in this chapter have limitless practical applications, students should cover this chapter thoroughly from their exams and careers perspective.

Extramarks offers CBSE Class 11 Accountancy Revision Notes for Chapter 13 Computerised Accounting System to help students with their exam preparation. The notes include explanations of all the important concepts covered in the chapter in a clear and concise manner. Students will find these notes very useful in their last-minute preparations and can access these notes from the Extramarks’ website.

Revision Notes for CBSE Class 11 Accountancy – Chapter 13 – Free Download

Access CBSE Class 11 Accountancy Chapter 13 – Computerized Accounting System Notes

Chapter 12 of the Class 11 Accountancy syllabus introduces the computerised accounting system to the students. This section has been recently added to the syllabus by NCERT as it acknowledges the value of computers in modern-day accounting systems. The chapter covers the properties of a computerised accounting system, its many advantages, core components, and its limitations.

Concept of Computerised Accounting System

An accounting information system that processes financial transactions while maintaining the accounting principles is known as a computerised accounting system. One can store the accounting information on a computer, network server, or remotely via the internet. The system deals with many income and expenditure accounts with a large amount of data.

Most computerised accounting systems are dependent on well-designed databases. It comprises a functioning interface that enables the user to leverage various accounting programs and reporting systems.

Usually, every computerised accounting system has two basic requirements:

1. Accounting Framework: It contains a series of accounting principles, coding, and structures.
2. Operating Procedure: It must be well-defined and need to blend well with the organisation’s operating environment.

The computer used in any database-centric application has four fundamental requirements:

1.Front-end Interface

The interface serves to be a link between the user and the software. The users can connect to the front-end interface to interact with the back-end database.

2.Back-end Interface

The back-end interface is a data storage system that the user cannot access. It responds and provides the users with the needed information based on the authority level to access.

3.Reporting System

The reporting system is a blend of various objects that can create accurate and useful accounting reports using the data stored in the system.

4.Data Processing 

Data processing includes a set of actions to transform the data into helpful and relevant information. 

Comparison between Manual and Computerised Accounting

Accounting refers to the processes of identification, recording, and classification of financial transactions to create financial reports.

The following points discuss the differences between manual and computerised accounting systems.

1. Manual Accounting is a system that keeps a record of financial transactions using hard copies, books, registers, and accounts books. A computerised accounting system refers to the accounting system that preserves financial records using accounting software.
2. In manual accounting, data gets recorded in the book of original entries. On the other hand, in computerised accounting, a customised database is used to store the data.
3. A computerised accounting system is much faster than a manual accounting system.
4. In a manual accounting system, calculations are performed manually, whereas, in a computerised system, automatic accounting software helps in the accounting process.
5. In a manual accounting system backing up the entries is impossible, but is possible in the computerised system.
6. A manual accounting system prepares the trial balance when required, whereas a computerised accounting system prepares and provides the trial balance every day.
7. In a manual accounting system, financial statements are prepared at the end of a specific period but; in a computerised accounting system, financial statements are always available, and it is just one click away.

Advantages of Computerised Accounting System

The advantages of a computerised accounting system in comparison to a manual accounting system are:

1. Speed
2. Accuracy
3. Updated Information
4. Reliability 
5. Real-Time User Interface 
6. Scalability 
7. Automated Document Production
8. Efficacy 
9. Readability  
10.  Quality Report
11.  Storage & Retrieval
12.  MIS Reports 
13.  Motivation and Employees’ Interest

Limitations of Computerised Accounting System

Despite the advantages of computerised accounting systems, it has several restrictions and limitations that can emerge from the operating environment. The potential obstacles are as follows:

1. Training Cost
2. Staff Opposition
3. Disruption
4. Sudden Failures
5. Incapable of Checking Unanticipated Errors
6. Breaches of Security 
7. Adverse Impact on Health
8. Obsolescence 

Sourcing of Accounting Software

Humans operate accounting software. The expertise of individuals responsible for accounting is one crucial factor to be considered before the accounting software. The requirement for a new accounting software arises in any one of the two cases:

• If the computerised accounting system is to become the replacement for an existing manual accounting system.
• When you require a new computerised accounting system as a replacement to an existing computerised accounting system to meet the changing needs of the organisation.

Accounting Packages

A computerised accounting system records and stores the accounting data and creates reports based on the information. The accounting packages used in the computer system belong to any one of the following categories:

1.Ready to Use Software

Ready-to-use software is easy to use, less expensive to install, and best for small businesses. The training process to leverage such software is also very simple. Mostly, small and medium enterprises use this software as the secrecy level is relatively low, and it is less likely to connect to other information systems.

2.Customised Software

Customised software is designed based on the specific requirements of the user. This kind of software is suitable for medium and large businesses as it can connect to other information systems. The installation and training cost is pretty high. 

3.Tailored Software 

Tailored software is best suited for large business companies which expand over a bigger demographic space. Multiple users can use the software. The secrecy level is high, and the training and installation cost is very high due to the requirement for expert staff. Mostly, large and typical business enterprises use this kind of software. 

Generic Considerations before Sourcing an Accounting Software

Before you source any accounting software, you must consider various factors, including the flexibility of the software, installation charges, size of the organisation, secrecy level, etc. An enterprise needs to focus on these factors and select the best-suited accounting software as per the requirements.

The factors are as follows:

1. Flexibility
2. Installation and Maintenance Cost
3. Company Size
4. Training Needs and Adaptability 
5. MIS Reports/ Utilities 
6. Level of Secrecy (Data and Software)
7. Importing/Exporting Data Facility 
8. Vendors’ Reputation and Capability 

Class 11 Accountancy Chapter 13 Revision Notes

Chapter 14 focuses on the advantages of computerised accounting systems for businesses. The chapter is crucial from a practical as well as an examination perspective. Extramarks offers clear and concise CBSE Revision Notes for this chapter that students can easily download for free.

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

The most fundamental topics in the chapter are as follows:

1. Concept of Computerised Accounting System
2. Accounting Framework
3. Accounting Packages 
4. Generic Considerations 

Why these Revision Notes?

The revision notes play a crucial role in helping the students prepare for the examination. The reasons behind studying these revision notes:

• The revision notes help the students to keep track of the chapter throughout.
• The capsuled notes support the students to finish the chapter soon.
• The revision process will be on track.
• The students can browse the revision notes before the exam to remember the theory and work more on the practical section.