NCERT Class 11 Accountancy Computerized Accounting System Worksheet

Class 11 Accountancy Practice Sheet: NCERT Class 11 Accountancy Computerized Accounting System Worksheet

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A computerized accounting system is an accounting information system that processes the financial transactions and events as per accounting principles (GAAP) to produce reports as per user requirements. In a computerized accounting system, the framework of storage and processing of data is called operating environment which consists of hardware and software in which the accounting system works. 
Modern computerized accounting system is based on the concept of database. A database is implemented using a database management system, which is defined by a set of computer programs (software) that manage and organize data effectively. 
 
Data Base Concepts 
Data – Data are facts and figures about any phenomenon like people, places, objects, entities or events. It is usually expressed in monetary units like number of units produced, number of hours worked, quantity of materials consumed etc. 
Database – The data collected is to be stored so that they can be used by different people. This requires the creation of database. Thus database is a collection of data that is shared and used for multiple purposes. Telephone directory is an example for database. 
 
Basic requirements of a database 
1. Front-end interface – It is an interactive link between the user and database, through which the user communicates to the back-end database. E.g. a purchase transaction is entered through “purchase voucher” which appears on the monitor. 
2. Back-end database – It is the data storage system which is hidden from the user and responds to the requirements of the user to the extent the user is authorized to access. 
3. Data Processing – It is a series of actions that are taken to transform the data into useful information which is meant for decision making. 
4. Reporting system – Reporting is an integrated set of objects, which provides meaningful information to the users.
 
Comparison between Manual Accounting and Computerised Accounting
 
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Advantages of computerized accounting system 
1. Speed – Accounting data is processed in a lightning speed when it is compared with the manual effort. 
2. Accuracy – The possibility of error is eliminated because the primary accounting data is entered only once. 
3. Reliability – Computers are highly reliable compared to human beings as they are free from tiredness, boredom or fatigue. 
4. Up-to-date information – The accounting records in a computerized accounting system are updated automatically as and when the data is entered and stored and it will be reflected in all the reports within no time. Therefore, latest information is available without any additional effort. 
5. Real time user interface – Most of the automated accounting system are inter-linked through network of computers, so that the information is available to various users at the same time on a real time basis. 
6. Automated Document Production – The accounting reports such as cash book, trial balance, balance sheet etc. are obtained just by a mouse click. 
7. Legibility – The reports and data displayed on a monitor or printout is more legible than handwritten words. So that the chances errors are minimized. 
8. Efficiency – Computer accounting system ensures better use of resource and time. 
9. Quality reports – The reports generated by this system are error free and highly objective and can be relied upon. 
10. MIS reports – Computerized accounting system facilitates the real time production of management information reports, which will help the management to monitor and control the business effectively. E.g. Credit limit to a particular customer can be set. 
11. Storage and Retrieval – Computer accounting system allows the users to store data in a manner that does not require a larger amount of physical space as in the case of manual accounting. 
12. Motivation and employee interest – The computer system requires specialized training for staff which makes them feel highly motivated and develops interest on the job. 
 
Limitations of computerized accounting system 
1. Cost of training – A huge amount may be spent for the training of employees in order to adjust with this system of accounting. 
2. Staff opposition – It is quite common, because the employees having a fear that they shall be less important to the organization. 
3. Disruption – In the beginning stage of implementing this system in an organization, it will suffer a significant loss of work time. 
4. System failure – The danger of system failure is very serious limitation of this system such as software damage, data loss, virus attacks etc. 
5. Inability to check unanticipated errors – Since the computers lack capability to judge, they cannot detect unanticipated errors as human beings commit. 
6. Breaches of security – Alterations in records by unauthorized persons (hacking) will mislead the accounting information. 
7. Ill-effects on Health – The extensive use of computers may lead to various health problems such as back pain, eyestrain, muscular pain etc. 
 
Accounting Packages – Variety of accounting software are available in the market. The most popular software used in India are Tally and Tata Ex. Other popular software are Sage, Wings 2000, Best Books, Cash manager, Ace Pays etc. They are also known as accounting packages.
 
The accounting packages are classified into three: 
1. Ready to Use – These types of accounting packages are suitable to small scale business where the frequency or volume of transactions are very low. 
2. Customized – Customized means altered for individual requirements. Standardized accounting software available in the market may not suit or fulfill the user requirements, in such a case it must be customized as per the requirement of the customer. 
3. Tailored – These packages are specially designed to meet the specific requirements of the users. Usually they are applicable to large scale organizations.

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Factors to be considered before sourcing accounting software 
1. Flexibility – It must be suitable to the organization, its users (accountants), operating system like Windows 98/2000/Professional/XP/2007, Ubuntu etc. 
2. Cost of Installation and maintenance – A cost benefit analysis must be done before sourcing accounting software. Some software is available very cheap to buy, involve heavy maintenance and alterations costs such as cost of adding extra requirements, training to staff, updating new versions etc. 
3. Size of organization – It is an important factor for the choice of accounting package. Small organizations and non-profit organizations may opt for simple, single user operated software. While a large organization may require customized or tailored software to meet the multi-user requirements, geographically scattered and connected through complex networks. 
4. Ease of adaptation and training needs – Some accounting software is user friendly requiring a simple training to users, while some others are complex in nature. 
5. Utilities / MIS reports – The MIS reports and the degree to which they are used in the organization also determine the acquisition of software. If we want to generate only the final accounts may depend on a ready to use software. 
6. Expected level of secrecy (Software and Data) – Another consideration before buying accounting software is the security features which prevent unauthorized personnel from accessing or manipulating data in the accounting system. Therefore it must be capable to protect by passwords. 
7. Exporting/Importing data facility – The transfer of database to other systems or software like MS Word, MS Excel or to some other MIS reporting system, is sometimes expected from accounting software in order to make reporting more flexible. 
8. Vendors reputation and capability – It should also be considered before sourcing an accounting software. This depends upon how long he has been in this business of software development, and tries to ensure their capability to extend services in future.

 

Important Questions for NCERT Class 11 Accountancy Computerized Accounting System
 

Question. Which one is the advantage of accounting?
(a) Replacement of memory
(b) Shows the present value of the business
(c) Accounting does not record price level changes
(d) Accounting is not fully exact

Answer :  A

Question. Adjustment Entries/Non-Cash Entries are recorded in
(a) Payment Voucher
(c) Contra Voucher
(b) Journal Voucher
(d) Purchase Voucher

Answer :  B

Question. There are ........... pre-defined groups in tally :
(a) 15
(b) 13
(c) 28
(d) 2

Answer :  C

Question. Out of the following which is the branch of Accounting?
(a) Financial Accounting
(b) Cost Accounting
(c) Management Accounting
(d) All of these

Answer :  D

Question. This is a non-accounting voucher.
(a) Receipt Voucher
(c) Memo Voucher
(b) Payment Voucher
(d) Journal Voucher

Answer :  C

Question Which of the following software is not an operating software:
(a) MS-DOS
(b) Windows XP
(c) MS Word?

Answer :  C

Question. For creating a company we use
(a) Alt + F1
(c) Alt + F2
(b) Alt + F3
(d) ESC key

Answer :  B

Question. For receipt voucher, we use ………. Key.
(a) F6
(c) F4
(b) F5
(d) F7

Answer :  A

Question Which of the following is a limitation of a computer:
(a) Speed
(b) Accuracy
(c) Intelligence?

Answer :  C

Question. To change period in Tally we use .......... Key.
(a) FI
(c) F5
(b) F3
(d) F2

Answer :  D

Question Which of the following is not an input device:
(a) Scanner
(b) Keyboard
(c) Monitor?

Answer :  C

Question. The last step in accounting as a process of information is
(a) recording the transaction.
(b) preparation of financial statements,
(c) communication of Information.
(d) All of these.

Answer :  C

Question. Basic function of accounting is
(a) to record all business transactions.
(fa) to interpret financial data.
(c) to assist the management in performing functions effectively.
(d) None of the above.

Answer :  A

Question. For print option in Tally we use ………. Short cut key.
(a) Ctrl + P
(c) Alt + P
(b) Shift + P
(d) Arrow Key

Answer :  C

Question. Which of the following will not be recorded in the books of account?
(a) Purchased a LED TV for personal use, amount paid from personal account
(b) Purchased machinery of Rs. 1,00,000
(c) Purchased goods for Rs. 25,000
(d) Paid Salaries and Wages

Answer :  A

Question. Accounting is
(a) A process concerned with summarising of the recorded transactions.
(b) Not the language of business.
(c) An art of recording, classifying and summarising financial transactions in a significant manner.
(d) All of the above.

Answer :  C

Question. Which of the following is the objective of Accounting?
(a) Systematic Recording
(b) Comparison and Evaluation
(c) Solvency Position
(d) Forecasting

Answer :  A

Question. Book keeping is concerned with
(a) recording financial data relating to business transactions.
(b) designing for systems recording, classifying, and summarizing recorded data.
(c) interpreting data for internal and external users.
(d) All of the above.

Answer :  A

Question. Which of the following is not the user of accounting information?
(a) Short-term creditors
(b) Debtors
(c) Government
(d) Owners

Answer :  B

Question. Two primary qualitative characteristics of financial statements are
(a) Understandability and materiality.
(b) Relevance and reliability.
(c) Relevance and Materiality.
(d) All of thes.

Answer :  B

Free study material for Accountancy

Free CBSE Practice Worksheets: Class 11 Accountancy Chapter 13 Computerised Accounting System

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