Page 290 - DMGT104_FINANCIAL_ACCOUNTING

Financial Accounting

Notes important part of the organizational MIS. The secrecy and authenticity checks are robust in such
softwares and they offer high flexibility in terms of number of users. To summarise, the following
table represents the comparison between the various categories of accounting software:
Basis Ready to use Customised Tailored
Nature of business Small, conventional Large, medium Large, typical
business business business
Cost of installation and maintenance Low Relatively high High
Expected Level of secrecy Low Relatively high Relatively high
(Software and Data)
Number of users and their interface Limited As per Unlimited
specifications
Linkage to other information system Restricted Yes Yes
Adaptability High Relatively high Specific
Training requirements Low Medium High

Self Assessment

Fill in the blanks:
7. …………………… is an integral part of the computerised accounting system.

8. ………………… accounting software is suited to organisations running small/ conventional
business where the frequency or volume of accounting transactions is very low.

Task Enumerate the basic requirements of any computerised accounting system.

13.5 Summary

 The most popular system of recording of accounting transactions is manual which requires
maintaining books of accounts such as Journal, Cash Book, Special purpose books, and
ledger and so on.
 A computerised accounting system is an accounting information system that processes the
financial transactions and events as per Generally Accepted Accounting Principles (GAAP)
to produce reports as per user requirements.
 Accounting software is an integral part of the computerised accounting system. An
important factor to be considered before acquiring accounting software is the accounting
expertise of people responsible in organisation for accounting work. People, not computers,
are responsible for accounting.

13.6 Keywords

Accounting Software: It is an integral part of the computerised accounting system.
Computerised accounting system: A computerised accounting system is an accounting
information system that processes the financial transactions and events as per Generally Accepted
Accounting Principles (GAAP) to produce reports as per user requirements.
Manual Accounting: It is recording of financial transaction through books of original entry.

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