Page 287 - DMGT104_FINANCIAL_ACCOUNTING

Unit 13: Computerised Accounting

to accounting data. Security provided by the computerised accounting system is far superior Notes
compared to any security offered by the manual accounting system.

13.2.2 Basic Requirements of the Computerised Accounting System

The basic requirements of any computerised accounting system are the followings:

 Accounting framework: It is the application environment of the computerised accounting
system.
A healthy accounting framework in terms of accounting principles, coding and grouping
structure is a precondition for any computerised accounting system.
 Operating procedure: A well-conceived and designed operating procedure blended with
suitable operating environment of the enterprise is necessary to work with the computerised
accounting system.
The computerised accounting is one of the database-oriented applications wherein the transaction
data is stored in well-organized database. The user operates on such database using the required
interface and also takes the required reports by suitable transformations of stored data into
information.
Therefore, the fundamentals of computerised accounting include all the basic requirements of
any database-oriented application in computers.

On the basis of the discussions, these are the following differences between manual accounting
and computerised accounting

Table 13.1: Difference between Manual Accounting and Computerised Accounting

Point of Difference Manual Accounting Computerised Accounting
1. Recording Recording of financial transactions is Data content of these transactions is
through books of original entry. stored in well designed data bases.
2. Classification Transactions recorded in the books No such data duplications is made. In
of original entry are further classified order to produce ledger accounts the
by posting them into ledger stored transaction data is processed to
accounts. This results in transaction appear as classified so that same is
data duplicity. presented in the form of report.
3. Summarising Transactions are summarized to The generation of ledger accounts is
produce trial balance by ascertaining not necessary condition for trial
the balances of various accounts. balance.
4. Adjusting Adjusting entries are made to adhere There is nothing like making adjusting
entries to the principle of matching. entries for errors and rectifications.
5. Financial The preparation of financial The preparation of financial
statements statements assumes the availability statements is independent of
of trial balance. producing the trial balance.

Self Assessment

Fill in the blanks:
3. A computerised accounting system is an accounting information system that processes the
financial transactions and events as per …………………… to produce reports as per user
requirements.
4. …………………… is the first stage of computerised accounting system.

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