Question
Discuss the advantages of computerised accounting system over the manual accounting system.
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Answer
Computerised accounting offers several advantages vis-a-vis manual accounting, these are summarised as follows;
- Speed: Accounting data is processed faster by using a computerised accounting system than it is achieved through manual efforts. This is because computers require far less time than human beings in performing a task.
- Accuracy: The possibility of error is eliminated in a computerised accounting system because the primary accounting data is entered once for all the subsequent usage and processes in preparing the accounting reports. Normally, accounting errors in a manual accounting system occur because of repeated posting of same set of original data by several times while preparing different types of accounting reports.
- Reliability: The computer system is well-adapted to performing repetitive operations. They are immune to tiredness, boredom or fatigue. As a result, computers are highly reliable compared to human beings. Since computerised accounting system relies heavily on computers, they are relatively more reliable than manual accounting systems.
- Up-to-Date Information: The accounting records, in a computerised accounting system are updated automatically as and when accounting data is entered and stored. Therefore, latest information pertaining to accounts get reflected when accounting reports are produced and printed. For example, when accounting data pertaining to a transaction regarding cash purchase of goods is entered and stored, the cash account, purchase account and also the financial statements (trading and profit and loss account) reflect the impact immediately.
- Real Time User Interface: Most of the automated accounting systems are inter-linked through a network of computers. This facilitates the availability of information to various users at the same time on a real time basis (that is spontaneously).
- Automated Document Production: Most of the computerised accounting systems have standardised, user defined format of accounting reports that are generated automatically. The accounting reports such as Cash book, Trial balance, Statement of accounts are obtained just by click of a mouse in a computerised accounting environment.
- Scalability: In a computerised accounting system, the requirement of additional manpower is confined to data entry operators for storing additional vouchers. The additional cost of processing additional transactions is almost negligible. As a result the computerised accounting systems are highly scalable.
- Legibility: The data displayed on computer monitor is legible. This is because the characters (alphabets, numerals, etc.) are type written using standard fonts. This helps in avoiding errors caused by untidy written figures in a manual accounting system.
- Efficiency: The computer based accounting systems ensure better use of resources and time. This brings about efficiency in generating decisions, useful informations and reports.
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₹
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(i)
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Bank overdraft as per the Cash Book.
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80,000
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(ii)
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Cheques deposited as per the bank statement but not entered in the Cash Book.
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3,000
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|
(iii)
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Cheques recorded for collection but not sent to the bank.
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10,000
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|
(iv)
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Credit side of bank column casted short.
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1,000
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|
(v)
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Bank charges recorded twice in the Cash Book.
|
100
|
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(vi)
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Customer's cheque returned as per the Bank Statement.
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4,000
|
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(vii)
|
Cheques issued but dishonoured on technical grounds.
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3,000
|
|
(viii)
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Bills collected by bank directly.
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20,000
|
|
(ix)
|
Cheque received entered twice in the Cash Book.
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5,000
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What is a Cash Book? What are the types of Cash Book? How is it balanced?