Students must practice these AP Inter 2nd Year Accountancy Important Questions 9th Lesson Computerised Accounting System to boost their exam preparation.
AP Inter 2nd Year Accountancy Important Questions 9th Lesson Computerised Accounting System
Very Short Answer Questions
Question 1.
What is Computerised Accounting?
Answer:
Accounting software functions on the concept of database. Accounting software is so designed that once transaction is entered and saved, the information is immediately posted to all appropriate journals, ledger and financial statements.
The accounting process through computers generates accounting records such as Cash Book, Bank Book, Journal, Purchases Book, Sales Book, Ledger and Trial Balance.
Question 2.
What is MIS?
Answer:
Management Information System or MIS broadly refers to a computer based system. It provides Managers with the tools to organize, evaluate and efficiently manage departments with in a organisation. In order to provide past, present and prediction informa¬tion, A management information system can include software. It helps in decision making, data resources and any computerised processes that enable the department to run efficiently.
Question 3.
Ready to Use accounting software. [Mar ’17 (AP)]
Answer:
Ready to Use accounting software is suitable to small business organisations with low volume of accounting transactions. The cost of installation is low and also limited users. It is easy to learn and high adaptability. The vendor offers the training on the software.
Question 4.
Customised accounting software. [March 2020]
Answer:
Customised software is suitable to medium and large business organizations and can be linked to the other information systems. The cost of installation and maintenance is relatively high. It includes modification and additions to the software contents. Secrecy of data and better-maintained software can be possible. Cost of training is high and necessary.
Question 5.
Tailored accounting software. [May ’17 (AP)]
Answer:
This software is used in large business organizations with multi-users and geographi¬cally scattered locations. The tailored software is designed to meet the specific requirements of the users.
Long Answer Questions
Question 1.
Define a computerized accounting system. Distinguish between a manual and computerized accounting system. [Mar ’18 (AP)]
Answer:
Comparison of Manual and Computerized Accounting System:
| Manual Accounting | Computerized Accounting |
| 1. Definition: In this system physical register of journal and ledger are maintained for keeping records. |
In this system we use computers with different accounting software to record. |
| 2. Calculations: All calculations are done manually. |
Record the transactions manually in the data base, but calculations are done by computer system. |
| 3. Ledger Accounts: In manual accounting transactions are posted from the journal into ledger manually. |
Computerized accounting system once transactions are recorded automatically transferred to journal & ledgers. |
| 4. Trial Balance: We have to correct balances of all accounts in our ledger to prepare Trial balance manually. |
Our computerized accounting system will produce Trial balance automatically. |
| 5. Adjustment Entries Record : Both adjustment journal entries and its posting in the ledger accounts will be done manually. |
Only adjustment entries will pass in the computerized accounting system, automatically posting into ledger accounts is done. |
| 6. Financial statements: Financial statements are prepared manually. |
Financial statements are prepared automatically. |
Manual and computerized accounting is aimed at to record, classify and summarize accounting transactions.
Question 2.
Discuss the advantages of computerised accounting system over the manual accounting system.
Answer:
Computerised accounting offers several advantages:
1. Speed: Computerised accounting system process the data very fast when compared to manual efforts.
2. Accuracy: Error is eliminated in a computerized accounting system, than in a manual accounting system.
3. Reliability: Computers are highly reliable compare to human beings because repetitive operations can be done without tiredness, boredom or fatigue.
4. Up-to-Date in Formation: Computerised accounting system are updated auto-matically as and when accounting data is entered and stored.
5. Real Time User Interface.: Most of the automated accounting system are inter linked through a network of computers. This facilitates availability of information to various users.
6. Automated Document Production: Computerised accounting system reports such as Cash Book, Trial Balance, Statement of Accounts by click of a mouse.
7. Scalability: In this system additional manpower is required to data entry operators for storing additional vouchers. But processing expenditure is negligible. Therefore it is highly scalable.
8. Legibility: The data displayed on computer monitor is legible hence errors can be avoided.
9. Efficiency: This system ensure better use of resources and time. This brings about efficiency in decisions.
10. Storage and Retrieval: This system allows the users to store data and permits fast and accurate retrieval of data and information.
Question 3.
Explain the limitations of a computerised accounting system.
Answer:
1. Cost of Training: The sophisticated computerised accounting packages require specialised staff personnel. A huge training cost is incurred for specialised staff.
2. Staff Position: Whenever the accounting system is computerised, there is a significant degree of resistance from the existing accounting staff.
3. Disruption: When the computerized accounting system introduced into the organisation, daily accounting process suffer from loss of routine work and also time. It consumes more time to train the staff.
4. System Failure: Work will disturbed due to hardware failure. The system has to back-up due to human unanticipated errors.
5. Breaches of Security: Computer related crimes are difficult to detect and also alteration of data may not be noticed. But it is easily detected in manual accounting system. Some times passwords or user rights may hacked which leads to change in the accounting records.
6. Ill-effects on Health: The extensive use of computers system may lead to various health problems: eyestain, muscular pains etc. This effects working efficiency of accounting staff.
Software damage and failure may occur due to attacks by viruses.
Question 4.
Explain the various categories of accounting package. [Mar. 2019, ’18(AP)]
Answer:
Computerised accounting system performs accounting activities and produce reports as per needs of the users. Accounting packages are classified into –
a) Ready to use, b) Customised & c) Tailored.
a) Ready-to-Use: It is suitable to small business organisations with low volume of accounting transactions. The cost of installation is low and also limited users. It is easy to learn and high adaptability. The vendor offers the training on the software.
b) Customised: It is suitable to medium and large business organisations and can be linked to the other information systems. The cost of installation and maintenance is relatively high. It includes modification and additions to the software contents. Secrecy of data and better maintained software can be possible. The cost of training is high and necessary.
c) Tailored: This software is used in large business organisations with multi-users and geographically scattered locations. It is designed to the specific requirements of the users.