Account 4 Marks Question

Management Information System (MIS) is a planned system of collecting, processing, storing and disseminating the data in the form of information to perform the task of decision making and management of an organisation.
Human Resource Information System (HRIS) maintains the records of the employees and prepares salaries and wages payable to them.
Relationship between MIS and HRIS. HRIS provides MIS with the information such as, the qualifications, skills, experiences and past performances of an individual employee. The MIS in turn uses this information to take appropriate decisions. This helps in placing the right person with right qualities at right job positions. This also helps in making decisions regarding promotions and increments of the employees.

The term Customised Software means making changes in the readymade software to suit the specific requirements of the user, i.e., making it user-specific. The software available off-the-shelf is modified to suit the requirements of the user. For example, the design of the invoice is changed to the specifications of the user. The developer, to meet specific user requirements, can modify all the readymade softwares. However, the user has to bear the cost of such changes. The advantages and disadvantages of readymade software are also the advantages and disadvantages of Customised Software.

Applications of Computers in Accounting.

1. Recording of all business transactions: All the relevant business transactions are recorded accurately and regularly or making available up to-date accounting information to the management.
2. Preparation of various ledger accounts: It prepares various ledger accounts such as Cash, Bank, Sales, Purchases, Debtors and various nominal and real accounts.
3. Processing the payroll information: It processes the payroll inforrnation relating to wages and salaries paid or payable during the accounting period.
4. Preparation of Trial Balance: It prepares the trial balance to ensure the arithmetical accuracy of accounting transactions so recorded, arranged and classified systematically.
5. Preparation of Final Account: It is helpful in preparing the final accounts such as Manufacturing Account, Trading Account, Profit and Loss Account, Profit & Loss Appropriation Account and the Balance Sheet at the end of the accounting period. It also provides for the automatic reconciliation of accounts.

The term Customised Software means making changes in the readymade software to suit the specific requirements of the user, i.e., making it user-specific. The software available off-the-shelf is modified to suit the requirements of the user. For example, the design of the invoice is changed to the specifications of the user. The developer, to meet specific user requirements, can modify all the readymade softwares. However, the user has to bear the cost of such changes. The advantages and disadvantages of readymade software are also the advantages and disadvantages of Customised Software.

However, computerised accounting suffers from the following disadvantages:

1. Controls: If adequate controls are not built and, where built, are not followed, it can lead to loss of data. It is important to take back-ups at regular intervals to avoid such a situation.
2. Data Corruption: The data can get corrupted through viruses that may come in through the internet or the use of external input devices without scanning them for viruses.
3. Trained Computer Operators: Untrained computer operators can lead to loss of data.
4. Limitations of Software: The software is developed on the basis of the experiences of the team of developers. As such, it may not be able to deal with a specific problem that may arise.

“A computer is a data processor that can perform substantial computations, including numerous arithmetic and logic operations, without intervention of human operator during the run." -International Standards Organisation
We can also define a computer as an electronic digital machine that acts as per the set of instructions (called program or software) and is used for processing.

An organisation consists of various interdependent decision making units at every level of management and department. All these separate departments take decisions for their respective fields to achieve the desired common organisational objectives. The organisation as a whole needs to set its targets, draft plans and formulate various policies. These activities are based on the information (in form of data) regarding the past experiences and expected future conditions. It is on the basis of this information that an organisation allocates its resources and attempts to accomplish its determined targets. Thus, it can be said that on one hand, information facilitates the decision making process while on the other hand, decisions took in the past acts as a pool of information in the future.

Advantages of Word Processor:

1. Instead of typing the full matter again, any word, line or paragraph previously typed can be changed, erased or shifted to new location. New words or lines can also be insertec wherever needed.
2. Printing facilities are also available in a word processor. We can obtain the error free printed copies of the matter and also without any sign of the rectification of an error.
3. The matter once typed can be arranged in different formats, styles and also in a desired width of the page. If a new line or word is inserted or deleted, the space between the words is automatically adjusted in a fraction of a second.
4. The word processor also helps in checking the spelling of words. It contains a dictionary and automatically identifies the words in the typed matter that are not found in the dictionary.

Readymade Softwares are the softwares that are developed not for any specific user but for the users in general. Since, the readymade softwares are for general user, it is not necessary that all the modules of such softwares are of use for every user. It is likely that a particular module say 'Payroll' may not be used because the enterprise has very few employees. Similarly, a service enterprise will not require VAT module while a retail enterprise will not require Service Tax module. Some of the Readymade Softwares available are Tally, Ex, Busy and Professional Accountant. Out of these, Tally is very widely used.

Readymade Software: Readymade Softwares are the softwares that are developed not for any specific user but for the users in general. Since, the readymade softwares general user, it is not necessary that all the modules of such softwares are of use for every user. It is likely that a particular module say 'Payroll may not be used because the enterprise has very few employees. Similarly, a service enterprise will not require VAT module while a retail enterprise will not require Service Tax module. Some of the Readymade Softwares available are Tally, Ex, Busy and Professional Accountant. Out of these, Tally is very widely used.

Accounting software is used to collect information about and report on the financial viability of a business. This software is critical to the proper administration of an organization. Before deciding upon which software package to use, it is important to understand the different types of accounting software, and under what circumstances each one should be used. The following list itemizes the general classifications of accounting software:

• Electronic Spread Sheets.
• Word Processor.
• Data Base Management.

Trial Balance has a number of accounts for expenses, income, assets and liabilities. All the account heads cannot be shown in the final accounts as they will not remain understandable. Account heads are grouped in various sub-heads according to their nature and the final amount in the subgroup is shown in the final accounts. For example, salary, wages, staff welfare and other similar account heads may be grouped under Establishment Expenses or Employee Cost and the final amount be shown in the Profit and Loss Account (Statement of Profit and Loss, in the case of companies). In fact, the process of grouping is carried out along with the preparation of chart of accounts since the two stages are inter-related.