Computerised Accounting System

• The computer is an electronic device, which is used to perform substantial computations, including numerous arithmetic and logic operations
• Without the intervention of a human operator.

• It does not have learning power.
• Cannot make judgement based on feeling and knowledge.
• They cannot think & learn as humans do.
• They cannot express their ideas.

• Accuracy
• Speed
• Automation
• Storage capacity
• Reduction in time
• Reduction in paperwork
• Reliable

• Hardware
• Software
• Humanware

(a) processor

(b) motherboard

(c) random access memory

(d) read only memory

(e) secondary memory unit

(f) mouse

(g) keyboard

(h) monitor

(i) speaker

(j) printer

• The processor or microprocessor or Central process unit is a small chip that resides in the motherboard.
• It tells the computer how to control the flow of the instructions.
• The processor has different parts:
• Control unit: This unit of the processor controls all the activities of the processor and also controls the input and output devices of the computer.
• Arithmetic Logic Unit: it performs the mathematic calculations like additions, subtractions, multiplications and makes a logical comparison of different numbers.
• Memory Unit: A processor has its own memory inside it in the shape of small cells. Each memory cell is called a “Register”. Data comes in registers from primary memory (RAM) of the computer.

• The motherboard is the main circuit board of your computer and is also known as the mainboard or logic board.
• In motherboard, many devices are added such as CPU, ROM, memory, RAM expansion slots, PCI slots, and USB ports.

• RAM is also known as volatile memory or Primary memory.
• RAM is the memory where data and program instruction are stored while the computer is in operation.
• The data store in RAM is lost forever when the power is turned off.

• It is a non-volatile memory.
• The data cannot be stored in ROM.
• ROM which holds the data permanently that cannot be changed.

• It is a memory where programs and data are kept on a long-term basis.
• Secondary memory devices are Hard disk, portable flash drives, CDs, DVDs.

• The mouse is an electro-mechanical, hand-held device.
• It is used as a pointer. It can be used for selecting menu commands, moving icons.

• It is an input device that is used for input of text or numbers into the computer in the CUI (Character User Interface).

• It is also called ‘Computer Screen’ or ‘Display’.
• It is part of the computer system which visually communicates with the user.

• It is a device that converts analogue audio signals into the equivalent air vibrations
• In order to make an audible sound.

• Printers are devices used for producing information as a hard copy.

Computer software can be divided into the following three categories.

• It is a set of programs, active all the time in the memory of the computer,
• It manages the resources of the computer for their better and effective use. Example – Windows XP Software.

• It is a set of computer programs used to perform supporting operations on a computer.
• Utility Software usually focuses on how the computer infrastructure (including the computer hardware, operating system, application software and data storage) operates.

• Application Software is the user-oriented program.
• It is designed and developed for performing certain jobs, such as accounting, word processing and designing.

• People interacting with the computer and executing the program or software are known as Humanware.
• They use hardware and software to develop, maintain and use the information system of the computer memory.

• Data is the basic component of the information;
• It can be understood as the information that is raw and unorganised.

• It is a transformed set of data in such a way that it helps to reduce future uncertainty.
• It contributes to the decision making the process.

• Information System is an integrated set of components for collecting, storing, processing and communicating information.

• ‘MIS’ is a computerised database of financial information organised and programmed
• In such a way that it produces regular reports on operations for the management of an operation.

• It is a system of collecting, storing and processing financial and accounting data
• That is used for the purpose of decision making.
• Components of an Accounting Information system are: People, data,
• Software, procedure, Information Technology and internal controls.

• Speed
• Accuracy
• Reliability
• Efficiency
• Security
• Up-to-date information
• Real-time user interface
• Automated document production
• Legibility
• Lower Cost
• Quality reports
• MIS reports
• Storage and retrieval

• System failure
• Cost of training
• Staff operation
• Disruption
• Inability to check unanticipated errors

• Readymade Software
• Customised software
• Tailor-made-software

• Readymade softwares are the software that is developed not for any specific user but for the users in general.
• It is suitable for a small organisation where the volume of accounting transactions is very low.
• Readymade softwares are Economical
• This software is easy to learn.

• Customised Software means making changes in the readymade software to suit the specific requirements of the user.
• It is suited for large and medium business.
• The cost of installation and maintenance is relatively high.
• The vendor has to be paid for customisation.
• Secrecy of data and software can be better maintained.
• The training costs are high as users have to be trained for using the software.

• It is a software that is specially developed for some specific organisation or for other users.
• It is an important part of MIS.
• It is developed for the large business organisation with multi-users.
• This software requires specialised training to users.

• Size of organisation
• Cost of installation and maintenance
• Flexibility
• Ease of Adaptation and Training Needs
• Utilities
• Exporting and importing data facility
• Expected Level of Secrecy