F.Y.B.B.A.I.

B BUSINESS ACCOUNTNIG

COMPUTARIZED
ACCOUNTING
CONTENTS
COMPUTERIZED ACCOUNTING
Introduction
Meaning
Drawbacks of the Traditional Manual Accounting
System
Data Processing
Data Processing Cycle
Process of Computerized Accounting & Financial
Accounting
Features of a Computer System
Advantages
Disadvantages/Limitations
Application of Computers in Financial Accounting
CAS Software & It's types
Conclusion
 COMPUTERIZED ACCOUNTING

Introduction
For the past few decades, computerized data has been
used mainly in the field of science and technology.
However, as the years go by, computerized accounting
systems are also becoming quite common.
Several accounting firms still perform book-keeping
manually, while most firms comprise financial
transactions that can be a lot for a manual accounting
process.
Moreover, the complicated financial transactions of a
firm are quite difficult to be recorded manually. That
led to the introduction of the concept of computerized
accounting systems.
 01

Computerized accounting is a beneficial use

of current technological advances.

MEANING Not only has it revolutionized the traditional

paper methods of accounting, but it has also
created new types of accounting
It is an accounting system where one or more applications for business.
computers of any type or size are involved in the
processing of financial information i.e. recording
of transactions to preparation and analysis of In this style of accounting, just
financial structure. like the name suggests,
accounting is done with the aid of
a computer.
It tends to involve dedicated
accounting software and digital
spreadsheets to keep track of a
business or client's financial
transactions.
 DRAWBACKS OF THE TRADITIONAL MANUAL
ACCOUNTING SYSTEM

The manual accounting system suffers from the following drawbacks:

It increases unnecessary duplication of work.

01
It is a labourious task resulting in wastage of time.
02
It is expensive due to payment of overtime to staff and
03 stationery expenses incurred.

It decreases speed of work and accuracy due to duplication of

04 work.

The detection and rectification of errors become difficult.

05 To overcome the drawbacks of manual accounting mentioned above, computerized accounting
system has been adapted in modern days. Computerized accounting is an economical and time
saving system.
 DATA PROCESSING Data processing is the recording,
restructuring or manipulating of data
by people or machines to increase
their usefulness and value for some
Every type of data processing requires the following fundamental particular purpose.
operations:
RECORDING: Recording the transcribing of data in a permanent form.
01

CLASSIFYING: Classifying involves grouping of items/transactions on

02 the basis of similarity
Data processing can be
SORTING: Sorting involves the arranging of data or transactions in a performed manually or
03
sesequential manner. electromechanically or
CALCULATING: Calculating involves adding, subtracting, electronically.
04 multiplying, dividing the data to produce usable results.
Advanced calculations such as square roots are also included.
SUMMARISING: Summarising involves the consolidation of
05 data emphasizing the key points and tendencies.

06 REPORTING: The summarised data constitutes information and is

Add your Add your
presented to the management in the formidea
ofhere
reports.idea here
 DATA PROCESSING CYCLE
Collection of data

Preparation of the data into a format suitable for data

entry, as well as error checking
The data processing cycle is the
Entry of the data into the system, which may involve
set of operations used to manual data entry, scanning, machine encoding, and so
transform data into useful forth
information. The intent of this
processing is to create Processing of the data with computer programs
actionable information that can
Transmitting the resulting information to the user,
be used to enhance a business.
typically via screen or printed report, so that it can be
This cycle involves the following acted upon
steps:

Storing the input data and output information for future use
PROCESS OF COMPUTERIZED ACCOUNTING

INPUT PROCESSING OUTPUT

Data & Instructions :

Electronic process Profit & Loss A/c
Cheques/Reciepts
through computers. Balance Sheet
Debit Notes
Credit Notes
Invoices

INPUT: One must put the right data and instructions

PROCESSING: The computer automatically processes the information and instructions

given to it

OUTPUT: After the electronic processing of information you get the finalised records of
the data
The steps that are involved in computerized
financial accounting are :

Planning and opening of an Accounting System

Entering of data

Coding PROCESS OR STEPS IN

Bank Reconciliation COMPUTERIZED

Posting FINANCIAL ACCOUNTING
Printing of trial balance

Finalization of accounts
 SPEED:
Speed refers to the amount of time a computer takes in
accomplishing a task or complete an operation.

FEATURES OF A ACCURACY:

COMPUTER The accuracy of the computer depend upon the quality of

the input ad instructions. Thus, computer is accurate as the
input and instructions are.
SYSTEM
STORAGE:
A computer system possesses Computer can store huge data, information and software
salient features which in i.e., programme files, in its storage space depending upon
comparison to human beings turn the capacity of hard disk installed.
out to be its capabilities.

The following are the features of RELIABILITY:

a computer system: It refers to the ability with which the computers remain
functional to serve the user. Computer systems are well-
adapted to performing repetitive operations.
CONSISTENCY:
Computer gives the same results without any variations on
consistent basis irrespective of the number of times the
programme is run. This property of repeating the same
results without variation is known as consistency.

VERSATILITY:
A computer can perform almost any task given to it,
provided it is reduced to a series of logical steps. Versatility
refers to the ability of computers to perform a variety of
tasks simple as well as complex.

NO I.Q:
A computer has no intelligence of its own i.e. it cannot take
its own decisions. It only does what it is told to do and in
what sequence. For this the instructions to the coomputer
have to be precise and to the point.
ADVANTAGES Reduce the time spent
on manual processes
Automated invoices,
credit notes and
OF Speed, accuracy, and
reliability of
receipts

COMPUTERIZED accounting executions

Innovative financial
technology
ACCOUNTING High efficiency along
with top security
Computerized accounting has Faster record-keeping
many advantages over traditional Real-time user leads to more business
manual accounting. interference along with
quality report
The following are few of the preparation, which is Save money on resources
advantages of computerized mostly automated
accounting:
DISADVANTAGES /
Failure of systems such as technical
01
failures like virus attacks, circuit
problems in the computer, etc.
LIMITATIONS OF
COMPUTERIZED 02
The cost of training to master
Computerized accounting systems is
usually a bit expensive.
ACCOUNTING
Disruptions are quite common
The disadvantages of computerized 03
accounting are as follows:

Most accounting systems

04 suffer from an inability to

check errors that are not

anticipated.

COMPUTERIZED ACCOUNTING
 Computer helps the financial accounting department to
make the primary and secondary record of the books of
accounts more systematically and scientifically.
APPLICATION OF On the basis of the same data various income statements
and position statements are prepared analytically to
COMPUTERS IN FINANCIAL disclose the financial performance and financial position
ACCOUNTING of the enterprise.
The informative financial statements are ultimately
communicated to the interested parties- internal and
external.
 Standard accounting system can be of two types i.e. ;
General Purpose Software
Tailor-made Software

COMPUTERIZED
GENERAL PURPOSE SOFTWARE:
ACCOUNTING SYSTEM
01
It has a certain amount of flexibility and

SOFTWARE AND ITS can be used by various customers by

adjusting their requirements according

TYPES to the software

Software is the general name given to 02 TAILOR-MADE SOFTWARE:

all programmes and routines A "tailor-made" software is
associated with effective use of developed according to the
specifications of particular customer
hardware resources. The commonly
or organization.
used operating systems are;
WINDOWS
MS-DOS
UNIX
 Computerized Accounting System which is technically known as Electronic
Data Processing (EDP) accounting system is an integrated computer, based
system which allows the user to enter the transaction into the program
once and all accounts are updated as necessary. It is also a specialized
CONCLUSION machine system use in gathering information. It also provides information
for decision making functions and has been of tremendous benefits not
only in banks also to all manner of firms and organizations.
Computerized accounting system has helped in facilitating the provision of
timely, quick customer service delivery, accurate and reliable information,
required by them (Banks and other firms and organizations). It has also
brought about quality performance in banking operations by abiding by the
accounting instructions and guidelines which help them to minimize
risk/challenges that are likely to be encountered in the course of their
duties as well as evolves adequate measures to combat such challenges
and achieve success.
The Team
F.Y.B.B.A.I.B

Saquib Khan Saranyaa Mudaliyar Shangh Peter Shruti Yadav Siddharth Gaikwad


Arogyam

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