GSEB Class 11 Solutions Chapter 11 Computers and Accounting

Question 1. Write short note on :
(1) Components of Computerised Accounting System.
Answer: The computerised accounting system has three main components: Hardware, Software, and Human ware.
1. **Hardware**: This refers to the actual physical parts of a computer. It is sometimes called the machine or the computer's equipment. Examples of computer hardware include the Central Processing Unit (CPU), Keyboard, Monitor, Mouse, DVD drive, Pen drive, Printer, Sound card, and Speakers. These parts are also categorised as Input devices, CPU, and Output devices. Input devices include the Mouse, Keyboard, Touch screen, and Bar code reader. The Central Processing Unit (CPU) is considered the computer's brain because it handles all computations, logical choices, and controls the machine's operations. The CPU consists of a control unit, memory unit, and arithmetic and logical unit. Output devices include the Monitor, Printer, and Speaker.
2. **Software**: This is a general term for the different types of programs used to make computers and their related devices work. Simply put, software refers to the computer programs required to perform tasks using the computer's various parts. Software can be mainly divided into two types: (1) System software and (2) Application software. System software helps manage the computer system's operations and expand its processing capabilities. Application software is used by users to carry out specific tasks. For instance, Windows 7 is system software, while Tally is application software.
3. **Humanware**: The term Humanware describes the individuals who interact with computers and software. This includes programmers, data entry operators, software engineers, hardware engineers, and system analysts. These people also play a crucial role in the successful implementation of a computerised accounting system.
In simple words: A computerised accounting system has three key parts: hardware (the physical machine parts), software (the programs that run the machine), and humanware (the people who use and manage it). Each part is essential for the system to work properly.

Exam Tip: When describing components, always define each part clearly and provide relevant examples to show understanding.

Question 1. (2) Features of computerised accounting system
Answer: The features of a computerised accounting system are as follows:

• **Speed:** Computers can perform tasks much faster. This helps in quickly preparing accounts and making financial statements and records available on time.
• **Memory power:** Computers have an incredible ability to store data. The capacity to store data is called memory.
• **Accuracy:** Computers perform operations with a high level of accuracy. The accounts prepared using a computer are precise, and the chance of errors is very small.
• **Working capacity:** A computer's working capacity is far greater than human ability. It can work continuously for several days.
• **Cleanliness:** Computerised accounts are much neater compared to manually prepared accounts.
• **Reliability:** Computers are not affected by tiredness, boredom, or fatigue. Therefore, they consistently provide dependable information.
• **Versatility:** Computer and accounting software can perform many different tasks.
• **Automating:** A computer is a machine designed to work automatically. It always functions according to the information or instructions given.
• **Automation of accounting process:** If a business properly chooses its computer system, accounting software, and personnel to manage them, it will gain numerous benefits from automation. However, if any of these components are flawed, it can negatively affect the outcome.
• **Reports and Statements:** Accounting reports and statements can be generated extremely fast using accounting software.

Exam Tip: For a comprehensive answer on features, aim to list at least 5-7 distinct points, providing a brief explanation for each.

Question 1. (3) Accounting Software
Answer: Accounting software is a type of application software that records and processes accounting transactions within various functional modules, such as accounts payable, accounts receivable, payroll, and trial balance. It functions as an accounting information system.
**Types of Accounting Software**: The following are the categories of accounting software:
1. **Ready-made Software**: Ready-made software is developed not for a single user but for general users. Since these softwares are for widespread use, it is not always necessary for every user to utilise all their modules. These types of software are affordable. Some examples of ready-made software include Tally, Tally Ex, Busy, Profit, and Professional Accountant. Among all these available ready-made softwares, Tally appears to be the most popular and commonly used accounting software. Because many people use such software, it is easy to find individuals who can operate it.
2. **Customised Software**: When ready-made software is changed to fit a customer's or user's specific needs, it is called customised software. Modifying ready-made software to meet a customer's needs makes it easier for the customer to use. However, these are not cheap, as the customer has to pay extra fees for the modifications. The benefits and drawbacks of this type of software are similar to those of ready-made software. For example, the design of an invoice can be changed to suit the customer's needs.
3. **Tailor-made Software**: Tailor-made software is developed according to a client's specific requirements. Some clients have accounting software built entirely to their needs. Since such software is designed and created based on a customer's specific needs, it is not readily available in the market. When this software is designed with the customer's needs in mind, the customer receives all the information, features, and statements required. However, it can be more costly than ready-made options.
When choosing accounting software, factors like its cost, the organisation's requirements, flexibility, data exchange or transfer capabilities, training needs, and maintenance costs should be considered.
In simple words: Accounting software helps manage money tasks like paying bills and tracking balances. There are three kinds: ready-made software (for everyone, cheaper), customised software (ready-made changed for you, more expensive), and tailor-made software (built from scratch for your exact needs, most expensive). Choosing the right one depends on your budget and what your business needs.

Exam Tip: When asked about types of software, always define each type and provide at least one relevant example to illustrate your point.

Question 1. (4) Accounting reports
Answer: Accounting reports can be easily prepared using accounting software. These reports are designed with the specific needs of the report in mind. Data, once processed, turns into information. When related information is summed up and presented to meet a particular need, it becomes a report. Such reports become valuable for users in their decision-making process. When creating an accounting report, its goals, content, completeness, and usefulness should be kept in mind to make it effective.
Examples of some such accounting reports include:
1. Cash flow statement,
2. Creditors' report,
3. Debtors' report,
4. Product-wise cost report,
5. Profit-Loss Account, and
6. Balance Sheet.
In simple words: Accounting reports are summaries of financial data created by software. They help people make decisions by presenting important information clearly. Things like cash flow statements or balance sheets are good examples.

Exam Tip: Define what accounting reports are, explain their purpose, and list several key examples to provide a complete answer.

Question 1. (5) Accounting Information System (AIS)
Answer: An Accounting Information System (AIS) is a system that processes data related to financial transactions in a way that provides useful information for internal decisions within the unit and for external parties. An AIS is a component of a Management Information System (MIS). The information provided by an AIS is helpful for managers in making internal decisions. Such information also becomes useful to external parties.
The above discussion shows that an Accounting Information System (AIS) provides various useful accounting data to both internal and external users, helping them in decision-making.
AIS can offer the following reports or statements related to accounting:

• **Profit and Loss statement:** From this statement, external parties can get information about the business's profit or loss, which is the result of its operations. Directors can gain information about the profitability of various products or divisions or departments from this statement.
• **Balance Sheet:** From this statement, internal and external parties can get information about the financial position of the units, meaning data about the assets and liabilities of the unit.
• **Debtors' report:** This report provides information relating to debtors or customers, as per the business organisation's needs.
• **Creditors' report:** This report can provide information relating to creditors or suppliers, as per the business organisation's needs.
• **Other reports:** A business organisation may prepare other reports as needed. For example, a Report about information of bank transactions can be prepared for the Managing Director.

Exam Tip: When defining AIS, clarify its role in decision-making, its relation to MIS, and list key reports it provides.

Question 2. How does Accounting Software provide facility for data exchange with other information system ?
Answer: Accounting software offers data exchange capabilities with other information systems in the following ways:
1. Through an internet web browser, any information can be accessed at any time from anywhere. If permission is granted, such accounting information can be changed, copied, or printed.
2. Accounting information can be uploaded. For example, if information about each sale bill is uploaded for filling VAT returns, the process of filing returns will be very easy.
3. Accounting information can be sent via e-mail. With such features or facilities, a lot of money and time is saved.
4. Accounting information or statements can be exported. For example, a Balance Sheet can be exported to an Excel Sheet.
In simple words: Accounting software helps share data in several ways. You can access information online, upload data like sales bills for easy tax filing, email reports to save time and money, and export statements (like a Balance Sheet to Excel) for other uses.

Exam Tip: When explaining data exchange, focus on practical methods like online access, uploading, emailing, and exporting, as these highlight the software's versatility.

Question 3. State the advantages of Computerised Accounting System.
Answer: The advantages of a Computerised Accounting System are as follows:
(1) When preparing accounts, it helps easily comply with legal requirements.
(2) Accounting information can be obtained very quickly.
(3) Accounting information can be accessed anywhere and at any time.
(4) Reliability and authenticity are increased in accounting information.
(5) Accounting information can be stored.
(6) Various accounting reports can be generated depending on the organisation's needs.
(7) Information can be managed as needed.
(8) Necessary information or reports can be uploaded easily.
(10) The chances of fraud or manipulation can be reduced.
(11) The chances of errors are reduced in accounting information.
(12) Accounting information can be transferred or exchanged easily by e-mail.
(13) Accounting information or statements can be exported.
(14) Various accounting reports can be prepared easily using accounting software.
(15) With computers, ledger entries become simple and fast for posting.
(16) Accounts prepared by computers are much neater.
(17) It is possible to get many copies of the required statement.
(18) Quick decisions based on accurate information or summaries are possible.
(19) Computerized accounting reduces the dullness of repetitive accounting tasks, which are tiring and time-consuming.
(20) Computerized accounting helps standardise accounting routines and procedures.
In simple words: Computerised accounting helps follow rules, provides quick and reliable information anywhere, and makes storing and sharing data easy. It reduces errors and fraud, makes reports cleaner, speeds up tasks, allows for quick decisions, and makes accounting less boring.

Exam Tip: When listing advantages, try to group similar benefits (e.g., speed, accuracy, data management) to ensure a comprehensive yet clear answer. Aim for at least 10-12 distinct points.

Question 4. State the limitations of Computerised Accounting System.
Answer: The limitations of a Computerised Accounting System are as follows:
(1) **Investment**: A small business cannot install a computer accounting system because of its high installation and maintenance costs. Often, units invest large sums in choosing improper hardware and software, and they are unable to gain proper benefits from such investments.
(2) **Specialized operators**: A computer system needs highly specialised operators. The availability of such skilled personnel is very rare and very expensive.
(3) **Fear of unemployment**: Computerisation can lead to increased unemployment because accounting work done with automation requires fewer people compared to manual accounting. Therefore, staff worry about losing their jobs and show less interest in computers.
(4) **Defective programs**: If software or computer programs are faulty, the desired benefits cannot be achieved.
(5) **Changes in technology**: Frequent changes occur in computer hardware and software. Therefore, computer hardware and software should be chosen carefully, considering the long-term need so that the investment does not become useless quickly. Investing in old technology will result in frequent expenses to upgrade it.
(6) **Insufficient work**: If the business unit has too little accounting work, then this system becomes costly and cumbersome.
In simple words: Computerised accounting has drawbacks: it's expensive to set up and maintain, needs skilled operators who are costly, and can cause job losses. If the software has flaws, it won't work well. Also, technology changes fast, so constant upgrades are needed, and it's not worth it for small workloads.

Exam Tip: For limitations, focus on financial aspects (cost, investment), human resources (specialised skills, unemployment), and technical issues (defective programs, rapid obsolescence) to provide a well-rounded answer.

Question 5. State the differences between the Traditional Manual System and Computerised Accounting System.
Answer:

Exam Tip: For comparative questions, always use a table format to present differences clearly. Ensure each point of comparison is directly contrasted between the two systems.

Question 6. Answer the following questions in brief :
(1) State names of some ready-made accounting software available in the market.
Answer: Some ready-made accounting softwares available in the market are:
Tally, Tata Ex, Busy, Professional Accountant, Profit, Account Mate, CYMA, Intacct, SAP Oracle, Kashoo, Less Accounting, Sage, etc.
In simple words: Some common ready-to-use accounting software options include Tally, Busy, and Sage, among many others available for businesses.

Exam Tip: When listing examples, try to recall popular or widely recognised names in the specific category to demonstrate broader knowledge.

Question 6. (2) Out of all the ready-made accounting software available in market, which one appears to be the most popular and widely used accounting software ?
Answer: Among all the ready-made accounting software available in the market, Tally is considered the most popular and commonly used accounting software.
In simple words: From all the ready-made accounting software, Tally is the one most people use and find popular.

Exam Tip: For questions asking for the "most popular" or "widely used" specific item, identify the key product accurately.

Question 6. (3) What is tailor-made accounting software ?
Answer: Some customers or clients have accounting software developed entirely according to their needs. This type of software is not easily available in the market. Therefore, it is known as tailor-made accounting software. In other words, tailor-made accounting software is software created to meet the exact specifications of a customer or client.
In simple words: Tailor-made accounting software is custom-built for one specific client, meeting their exact business needs and not sold to others.

Exam Tip: Emphasise the "custom-built" aspect and the "specific needs of a single client" when defining tailor-made software.

Question 6. (4) Give the name of any four groups of accounts.
Answer: The names of four groups of accounts are as follows:
1. Bank Accounts,
2. Bank OCC Account,
3. Capital Account, and
4. Current Assets.
In simple words: Four types of account groups are Bank Accounts, Bank OCC Accounts, Capital Accounts, and Current Assets.

Exam Tip: When listing items, ensure you provide the exact number requested (e.g., "any four groups") and use clear, standard terminology.