Short Answer Questions
Question 1. Define a computerised accounting system. Distinguish between a manual and computerised accounting system.
Solution 1: A computerised accounting system is that accounting information system that helps in processing the financial transactions and events as per the Generally accepted accounting principles (GAAP).
Below the difference of Manual and computerised accounting system:-
Question 2. Explain briefly any four advantages of computerised accounting system over the manual system.
Solution 2: The advantages of computerise accounting system over the manual system:-
- High Speed:- The accounting speed of a computer is much faster than a human being.
- Reliability:- The extent of reliability of the information generated by a computer is immense. The reliability remains the same despite the volume of the work whereas the reliability of a human work can be doubtful in case of voluminous work.
- Accuracy:- The accuracy of a computer cannot be doubted once a particular program is fed. All the results based on such program would be 100% accurate whereas the result produced by a human being can vary due to carelessness etc.
- Updating of Information:- All the related records in a computer get automatically update once any information is punched in, whereas in case of manual accounts all the records will have to be altered one by one.
Question 3. Computerised accounting system is the best form of accounting system. Do you agree? Comment.
Solution 3: “Computerised accounting system is the best form of accounting system” as below advantages are there:-
- High speed
- Reliability
- Accuracy
- Updating on information
- Efficiency
- Legibility
- Lower Cost
- Timely Reporting
- Flexible Reporting
- Storage and Retrieval
- Secure
- Queries
Question 4. Mention three limitations of the CAS (Computerised Accounting System).
Solution 4: Below are the limitations of CAS:-
- Staff Opposition:- Introduction of computer lead to a lot of retrenchment as well as complication of activities which result in resistance of the staff.
- High Cost of training:- The computerised accounting packages generally require specialised staff personal, which leads to heavy amount of cost of training.
- Adverse effects on health:- The excessive use to computers may lead to various health problems like eye strains, back aches, muscular pain etc.
Question 5. ‘Accounting software is an integral part of the computerised accounting system’ Explain.
Solution 5: ‘Accounting software is an integral part of the computerised accounting system’. Every business need computerised accounting system. But before acquiring any software it is very important to analyse the level of expertise of the people who would use it. Because eventually it is people and not the computer who are responsible for accounting.
The need for the accounting software arises in two situation’s namely:
(i) When the computerised system is replacing the manual system
(ii) When the computerised system already exists in the organisation and it is to be altered according to the recent changes.
Question 6. Briefly list the generic considerations before sourcing accounting software.
Solution 6: The list of generic considerations before sourcing accounting software:-
1.) The cost of installation and maintenance:- A simple cost benefit analysis is done before installing any software.
2.) Flexibility:- It is one of the important considerations before sourcing an accounting software.
3.) Adaptability and Training needs:- The accounting software should be easily understandable and adaptable.
4.) Size of the organisation:- The size of the organisation and the volume of its accounting transactions determine the requirements of the type of accounting software.
5.) The level of MIS reporting:- The level of use and utility of MIS reporting in on organisation determine the acquisition of software to a lot of extent.
Question 7. Give the names of different accounting packages.
Solution 7: Below are the different accounting packages:-
1.) Ready-to-use
2.) Customised
3.) Tailored
Question 8. Give names of two multi-user operating systems.
Solution 8:
Below are the multi-user operating systems:-
1.) UNIX
2.) Linux
Question 9. Explain the following along with their advantages:
(a) Ready to use accounting software.
(b) Customised accounting software.
(c) Tailored accounting software.
Solution 9:
(a) Ready to use accounting software:- A variety of ready-made software’s is available in the market. These software’s are for users at large and are not developed accounting to the requirements of any specific user.
Below are the advantages of Ready to use software are:-
1.) These software are developed by a group of highly experienced group of professionals.
2.) These software’s are used by a large number of users, accounting personnel well versed with these software’s are easily available.
(b) Customised accounting software:- The term ‘Customised Software’ means making changes in the ready to use software so as to suit the specific requirement of the user. Any readymade software can be changed according to the needs and specifications of the user.
Below are the advantages of Customised accounting software:-
1.) These software are designed to suit the specific requirement of the users.
2.) Level of secrecy for the data is higher.
(c) Tailor-made Software:- The term ‘tailor-made software means developing a software according to the needs and specifications of the users. These software’s are not available off-the-shelf.
Below are the advantages of tailor-made software:-
1.) It being developed according to the specifications of the user, takes care of the specific needs of the enterprise.
2.) The level of secrecy of data and authenticity checks are robust in such software’s.
Question 10. Briefly explain three advantages and three disadvantages of computerised accounting.
Solution 10: Below are the advantages of Computerised Accounting:-
- High Speed:- The accounting speed of a computer is much faster than a human being.
- Reliability:- The extent of reliability of the information generated by a computer is immense. The reliability remains the same despite the volume of the work whereas the reliability of a human work can be doubtful in case of voluminous work.
- Accuracy:- The accuracy of a computer cannot be doubted once a particular program is fed. All the results based on such program would be 100% accurate whereas the result produced by a human being can vary due to carelessness etc.
Below are the limitations of Computerised Accounting:-
- Staff Opposition:- Introduction of computer lead to a lot of retrenchment as well as complication of activities which result in resistance of the staff.
- High Cost of training:- The computerised accounting packages generally require specialised staff personal, which leads to heavy amount of cost of training.
- Adverse effects on health:- The excessive use to computers may lead to various health problems like eye strains, back aches, muscular pain etc.
Question 11. Write any three limitation of Ready-made software.
Solution 11:
Below are the limitation of Ready-made software:-
1.) These software use laser printers which are costly than the use of Dot matrix Printers.
2.) The level of secrecy in these software is very low thus the software is highly prone to frauds.
3.) These software offer very little scope of linking to other information systems.
Question 12. Define Software. Explain different type of software used in a computer system.
Solution 12:
In order to solve a problem with the help of computer, a sequence of instructions written in a proper language will have to be fed into the computer. A set of such instructions is known as a “Program” and the set of programs is called Software.
There are six type of computers:-
1.) Operating System
2.) Utility Software
3.) Application Software
4.) System Software
5.) Language Processors
6.) Connectivity Software