Answer the following questions.
Explain the importance of Computerised Accounting System.
Explain the importance of Computerised Accounting System.
Computerised accounting system is based on the concept of database. This system processes the financial transactions and events in accordance with the Generally Accepted Accounting Principles (GAAP) to produce reports as per the requirements of the users.
Importance of Computerised Accounting System
1. Systematic records: This system maintains the systematic records of the financial transactions of a business through which information can be easily derived whenever required.
2. Time Savings: A computer takes very less time in performing various difficult operations. The accounting data is processed comparatively faster through the computerised accounting systems than through manual efforts.
3. Accuracy and Reliability: In computerised accounting system, the possibility of errors is minimised, as the primary accounting data are entered only once for preparing various accounting reports and for subsequent usage and processes. Thus, such accounting records become more reliable.
4. Up-to-Date Information: In computerised accounting system, whenever new accounting data are entered and stored, the existing accounting records are automatically updated. For example, when a transaction related to purchase of machinery is entered in the computerised accounting system, the cash balance and machinery balance on the Assets side of the Balance Sheet are updated immediately. This ensures that the latest information is reflected in the accounting reports at any particular period of time.
5. Real-Time User Interface: Most of the automated accounting systems are inter-linked through a network of computers. The availability of information to various users at the same time on a real-time basis is facilitated in computerised accounting system.
6. Automated Document Production: In computerised accounting system, the accounting reports, such as Cash Book, Trial Balance and Statement of Accounts are very easy to obtain. This is because most of the computerised systems have standardised and user-defined formats of accounting reports that are generated automatically.
7. Statutory Requirements: Computerised accounting system is well-organised and accurate and allows the management to meet the statutory requirements.
Computerised accounting system is based on the concept of database. This system processes the financial transactions and events in accordance with the Generally Accepted Accounting Principles (GAAP) to produce reports as per the requirements of the users.
Importance of Computerised Accounting System
1. Systematic records: This system maintains the systematic records of the financial transactions of a business through which information can be easily derived whenever required.
2. Time Savings: A computer takes very less time in performing various difficult operations. The accounting data is processed comparatively faster through the computerised accounting systems than through manual efforts.
3. Accuracy and Reliability: In computerised accounting system, the possibility of errors is minimised, as the primary accounting data are entered only once for preparing various accounting reports and for subsequent usage and processes. Thus, such accounting records become more reliable.
4. Up-to-Date Information: In computerised accounting system, whenever new accounting data are entered and stored, the existing accounting records are automatically updated. For example, when a transaction related to purchase of machinery is entered in the computerised accounting system, the cash balance and machinery balance on the Assets side of the Balance Sheet are updated immediately. This ensures that the latest information is reflected in the accounting reports at any particular period of time.
5. Real-Time User Interface: Most of the automated accounting systems are inter-linked through a network of computers. The availability of information to various users at the same time on a real-time basis is facilitated in computerised accounting system.
6. Automated Document Production: In computerised accounting system, the accounting reports, such as Cash Book, Trial Balance and Statement of Accounts are very easy to obtain. This is because most of the computerised systems have standardised and user-defined formats of accounting reports that are generated automatically.
7. Statutory Requirements: Computerised accounting system is well-organised and accurate and allows the management to meet the statutory requirements.
