Page 285 - DMGT104_FINANCIAL_ACCOUNTING

Unit 13: Computerised Accounting

3. Processing and Revalidation: The processing of data occurs almost instantaneously in Notes
case of Online Transaction Processing (OLTP) provided a valid data has been fed to the
system. This is called check input validity. Revalidation occurs to ensure that the transaction
in terms of delivery of money by ATM has been duly completed. This is called check
output validity.
4. Storage: Processed actions, as described above, result into financial transaction data i.e.
withdrawal of money by a particular customer, are stored in transaction database of
computerised personal banking system. This makes it absolutely clear that only valid
transactions are stored in the database.

5. Information: The stored data is processed making use of the Query facility to produce
desired information.
6. Reporting: Reports can be prepared on the basis of the required information content
according to the decision usefulness of the report.
Take the case of a club, for example, where the number of transactions and their variety is
relatively small, a Personal Computer with standardized software may be sufficient. However,
for a large business organisation with a number of geographically scattered factories and offices,
more powerful computer systems supported by sophisticated networks are required to handle
the voluminous data and the complex reporting requirements. In order to handle such
requirements, multi-user operating systems such as UNIX, Linux, etc., are used.
Modern computerised accounting systems are based on the concept of database. A database is
implemented using a database management system, which is define by a set of computer
programmes (or software) that manage and organize data effectively and provide access to the
stored data by the application programmes. The accounting database is well-organized with
active interface that uses accounting application programs and reporting system.
Every computerised accounting system has two basic requirements:
 Accounting Framework: It consists a set of principles, coding and grouping structure of
accounting.
 Operating Procedure: It is a well-defined operating procedure blended suitably with the
operating environment of the organisation.
The use of computers in any database oriented application has four basic requirements as
mentioned below;

 Front-end Interface: It is an interactive link or a dialog between the user and database-
oriented software through which the user communicates to the back-end database. For
example, a transaction relating to purchase of goods may be dealt with the accounting
system through a purchase voucher, which appears on the computer’s monitor of data
entry operator and when entered into the system is stored in the database. The same data
may be queried through reporting system say purchase analysis software programme.

 Back-end Database: It is the data storage system that is hidden from the user and responds
to the requirement of the user to the extent the user is authorised to access.
 Data Processing: It is a sequence of actions that are taken to transform the data into
decision useful information.
 Reporting System: It is an integrated set of objects that constitute the report.
The computerised accounting is also one of the database-oriented applications wherein the
transaction data is stored in well-organized database.

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