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Chapter 10: Computers in Accounting

Computers are used extensively in accounting for tasks like recording transactions, processing payrolls, maintaining records, and preparing reports. An accounting information system gathers, processes, stores, and reports financial data for management decision making. Computers are helpful for transaction processing systems to routinely record business transactions, validate and store data, and generate outputs and queries. Computerized accounting systems allow for online data input and storage, automatic ledger updates, and instant reports.

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0% found this document useful (0 votes)
59 views3 pages

Chapter 10: Computers in Accounting

Computers are used extensively in accounting for tasks like recording transactions, processing payrolls, maintaining records, and preparing reports. An accounting information system gathers, processes, stores, and reports financial data for management decision making. Computers are helpful for transaction processing systems to routinely record business transactions, validate and store data, and generate outputs and queries. Computerized accounting systems allow for online data input and storage, automatic ledger updates, and instant reports.

Uploaded by

Rishi Shibdat
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

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Accountancy Notes PDF


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Applications of Computers in Accounting


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(Class – 11 / Chapter- 10)

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Computers In Accountancy, are used extensively for administration and office purposes. It is used to provide
accurate and reliable information related to firms’ financial activities and status through advanced computerised
accounting systems.

Elements of a Computer System


● Hardware – In a computer system, the hardware is the physical features. Few hardware elements
instruments are a printer, monitor, and keyboard, etc. The hardware helps the users to connect the
software quickly, which is used to display the tasks result that is being performed.
● Software – Software is a group of programmes, also known as computer instructions, which assists the

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user to perform a particular task. Both software and hardware guide the user to interact with the computer
system. Six main types of software are an operating system, application software, utility software, language
processors, system software, and connectivity software.
● People – The third element is the user who is interacting with the computer system is also an element of it.

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There are three types of people: programmers, system analysts, and end-users.
● Procedures – Procedure is a collection of instructions, written in code, to tell a computer how to
accomplish and calculate a task, and run the software, etc. The three types of procedures in a computer
system are a hardware-oriented procedure, software-oriented procedure, and internal procedures.

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● Data – Data are the facts and figures that we feed on the computer. These data are processed through the
computer system as information and formed as organized data. This organized data is used by
management for making various decisions.

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● Connectivity – The connectivity happens when the computer is linked to a network. It supports the sharing
of files, information, and other services. Computers are usually connected to a network through Bluetooth,
Wi-Fi, LAN cables, and satellites etc. The popular example of connectivity in a computer system is the
internet.
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Accounting Information Software
Accounting Information Software (AIS) records and processes all kinds of financial exchange records inside
functional modules. An AIS will gather, process, break down, and store budgetary information of an organization.
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Also, when called upon, it will recover and report such information to its clients, in particular bookkeepers,
advisors, budgetary officials’ CFO, inspectors, government charge specialists, and so forth. Softwares like AIS’
assessment gets archived naturally and are further sent electronically to government revealing offices. Budgetary
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reports are kept up basically by entering data and making reports with a lot of formulas and backend programs, a
considerable lot of which can be arranged by the client.
Computers are required in accounting for the following tasks:
1. To note down business transactions.
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2. Processing and maintaining payrolls.


3. Maintaining personal records.
4. Keeping effective stock control.
5. Invoicing of sales.
6. To maintain ledgers of creditors.
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7. To make bills.
8. To prepare accounts of credit and debit.
9. Classification of accounting transactions through sorting; merging and updating.
10. Prepare reports in the form of ledger accounts and balance sheets.
11. Stores accounting.

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Transaction Processing System:


They can perform and record the daily routine transactions which are necessary to conduct the business.
Process of TPS
1. Collection of data.
2. Validation of data
3. Manipulation of data
4. Storage of data
5. Generation of output
6. Query support.

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Features of Computerised Accounting System:
1. Online input and storage of accounting data.
2. Automatically update the ledger etc.

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3. Printout of purchases and sales invoices.
4. Grouping of accounts.
5. Instant Reports like Stock Statement, Trial Balance, Trading and Profit, and Loss A/c, Balance Sheet, Value
Added Tax (VAT), Payroll, etc.

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6. Codification of accounts and transactions.

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