Page 283 - DMGT104_FINANCIAL_ACCOUNTING

Unit 13: Computerised Accounting

and so on. The accountant is required to prepare summary of transactions and financial statements Notes
manually. The advanced technology involves various machines capable of performing different
accounting functions, for example, a billing machine. This machine is capable of computing
discount, adding net total and posting the requisite data to the relevant accounts.
With substantial increase in the number of transactions, a machine was developed which could
store and process accounting data in no time. Such advancement leads to number of growing
successful organisations. A newer version of machine is evolved with increased speed, storage,
and processing capacity. A computer to which they were connected operated these machines.
As a result, the maintenance of accounting data on a real-time basis became almost essential.
Now maintaining accounting records become more convenient with the computerised accounting.
The computerised accounting uses the concept of databases. For this purpose an accounting
software is used to implement a computerised accounting system. It does away the necessity to
create and maintain journals, ledgers, etc., which are essential part of manual accounting. Some
of the commonly used accounting software’s are Tally, Cash Manager, Best Books, etc.
Accounting software is used to implement a computerised accounting. The computerised
accounting is based on the concept of database. It is basic software which allows access to the
data contained in the data base. It is a system to manage collection of data insuring at the same
time that it remains reliable and confidential.

Following are the components of computerised accounting software:
1. Preparation of accounting documents: Computer helps in preparing accounting documents
like Cash Memo, Bills and invoices, etc., and preparing accounting vouchers.

2. Recording of transactions: Every day business transactions are recorded with the help of
computer software. Logical scheme is implied for codification of account and transaction.
Every account and transaction is assigned a unique code. The grouping of accounts is done
from the first stage. This process simplifies the work of recording the transactions.

3. Preparation of Trial Balance and Financial Statements: After recording of transaction,
the data is transferred into Ledger account automatically by the computer. Trial Balance is
prepared by the computer to check accuracy of the records. With the help of trial balance
the computer can be programmed to prepare Trading, Profit & Loss account and Balance
Sheet. These components can be shown as:

Figure 13.1: Components of Computerised Accounting Software

Recording of transaction
in respective voucher

Sales Purchases
Ledger

Trial Balance

Trading and Profit &
Balance Sheet
Loss Account

LOVELY PROFESSIONAL UNIVERSITY 277