1st PUC Accountancy Question Bank Chapter 13 Computerised Accounting System

You can Download Chapter 13 Computerised Accounting System Questions and Answers, Notes, 1st PUC Accountancy Question Bank with Answers Karnataka State Board Solutions help you to revise complete Syllabus and score more marks in your examinations.

Karnataka 1st PUC Accountancy Question Bank Chapter 13 Computerised Accounting System

1st PUC Accountancy Computerised Accounting System One Mark Questions and Answers

Question 1.
What is computerised accounting system?
Answer:
It is an accounting information system that processes the financial transaction and events an per GAAP.

Question 2.
Expand GAAP
Answer:
Generally accepted accounting principles = GAAP.

Question 3.
Mention the elements computer system?
Answer:
Computer system elements are Hardware, Software people, procedure, data and connectivity.

Question 4.
What is Hardware?
Answer:
Hardware of computer includes – physical components like, keyboard, mouse, monitor, CPU etc. These are electronic and electromechanical components.

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Question 5.
What is software or program of computer?
Answer:
A set of program, which is used to work with hardware is called its software.

Question 6.
What is firmware?
Answer:
A coded set of instructions stored in the form of circuits is called firmware.

Question 7.
Mention the different types of software.
Answer:
The different types of software are ;

  1. Operating system
  2. Utility program
  3. Application software
  4. Language processors
  5. System software
  6. Connectivity software.

Question 8.
What is procedure as a element of computer system?
Answer:
A procedure means a series of operations in a certain order or manner to achieve desire results.

Question 9.
Mention the different types of procedure in computer system.
Answer:
The different types of computer system procedures are:

  1. HardWare – oriented
  2. SoftWare – oriented
  3. Internal procedure.

Question 10.
List out the capabilities of computer system.
Answer:
Capabilities of computer system are:

  • Speed
  • Accuracy
  • Reliability
  • Storage

Question 11.
List out any two limitations of computer system.
Answer:
The demerits or limitations of computer system are;

  • Lack of common sense
  • Lack of decision making
  • Compulsory instructor.

Question 12.
Mention two features of computerised accounting system.
Answer:
The two features of computerised accounting system are :

  1. Online input and storage of accounting data.
  2. Grouping of ledger accounts is done in the beginning itself.
  3. Quick reporting to management and various types of reports can be produce.
  4. Invoices like purchase and sales can be prepared.

Question 13.
What is accounting information system?
Answer:
Accounting information system, identifies, collects, process and communicates economic information about an entity to a wide variety of users.

Question 14.
What is accounting report?
Answer:
Information supplied to meet a particular need of management is called report. It is helpful for management decision making.

Question 15.
List out the requisite of good accounting report.
Answer:
An accounting report must fulfill;

  • Relevance
  • Timeliness
  • Accuracy
  • Summarisation

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1st PUC Accountancy Computerised Accounting System Six Marks Questions and Answers

Question 1.
State the four basic requirements of a Database Applications.
Answer:
The following are the four basic requirements of a Database Application:
a. Front-end Interface- It acts as an interactive connecting link between the user and the database oriented software through which the user communicates or interacts to the backend database.

b. Back-end Database- It is the data storage system that is hidden from the users. It responds to the requirement of the users to the extent the user is authorised to access.

c. Data Processing- It is a sequence of actions that are taken to transform the input data into useful information for taking various decisions.

d. Reporting System- It is an integrated set of objects that includes all the relevant information that constitutes a report.

Name the various categories of Accounting Package.
The Accounting Packages are classified into the following categories:
a. Ready-to-use or Readymade Software
b. Customised Software
c. Tailored or Tailor-made Software

List the various advantages of Computerised Accounting Systems.
The mentioned below are the various advantages of Computerised Accounting Systems:
a. Speed
b. Accuracy
c. Reliability
d. Up-to-Date Information
e. Real Time User Interface
f. Automated Document Production
g. Scalability
h. Legibility

Give two examples each of the organisations where ‘ready-to-use’, ‘customised’, and ‘tailored’ accounting packages respectively suitable to perform the accounting activity.

‘Ready-to-use’ accounting packages are basically used by the small-sized enterprises. For example, grocery stores, medical stores, etc.

On the other hand, ‘Customised’ accounting packages are basically used by the medium and large business. For example, shopping malls, hospitals, etc.

Whereas, ‘Tailored’ accounting packages are basically used by the geographically scattered businesses. For example, MNC’s, Communication Industries, etc.

Question 2.
Distinguish between ‘ready-to-use’ and ‘tailored’ accounting software.
Answer:

Basis of Difference Ready-to-Use Accounting Software Tailored Accounting Software
1. Nature of Business This software is used in small and conventional businesses. This software is used in large and typical businesses.
2. Adaptability Its adaptability is very high. Its adaptability is very specific and cannot be used by every business houses.
3. Linkage to other Information System Its interface with the other information system is limited Its interface with the other information system is unlimited
4. Number of Users It has limited users. It has huge number of users.
5. Installation and Maintenance Costs The installation and maintenance cost is low. The installation and maintenance cost is comparatively higher

Question 3.
Define a Computerised Accounting System. Distinguish between a Manual and Computerised Accounting Systems.
Answer:
Computerised Accounting Systems is based on the concept of database. It is an accounting information system that processes the financial transactions and events in accordance to the Generally Accepted Accounting Principles (GAAP) to produce reports as per the requirements of the users.

Manual Accounting Computerised Accounting
1. As the data a recorded under manual accounting are visible. As the data stored in computers are not visible.
2. The rail of events under manual accounting can be easily established The rail of transactions (or) events cannot be established easily under computersied accounting.
3. The data recorded in manual accounting are not subjected to the risk of manipulation The data recorded in computerised ac­counting system are subject to the risk of manipulation.
4. In manual accounting, accounting data cannot be adjusted to produce various special statement and reports Under a computerised accounting system the accounting data can be easily adjusted to generate various special statement and reports.
5. The cost of preparing statement and report under manual accounting is high. The cost of preparing statements and re­ports under computerised accounting is low
6. The reports prepared under manual accounting are mostly board and general purpose reports. Under computerised accounting a number of special reports can be prepared to meet the needs of different mangers.

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Question 4.
Discuss the advantages of Computerised Accounting Systems over the Manual Accounting Systems.
Answer:
The following are the various advantages of the Computerised Accounting Systems over the Manual Accounting Systems:
a. Speed: The speed of a computer is very high and takes very less time in performing various difficult operations. The accounting data is processed comparatively faster through the Computerised Accounting Systems than it can be done through the manual efforts.

b. Accuracy: In Computerised Accounting Systems, the possibility of errors is minimised or reduced as the primary accounting data is entered only once for preparing various accounting reports and for subsequent usage and processes.

c. Reliability: As the Computerised Accounting Systems is well-equipped in performing repetitive operations, so it is comparatively more reliable to perform the operations than the manual system. Also, the Computerised Accounting Systems overcome the limitation of Manual Accounting Systems such as tiredness, boredom or fatigue, etc., thereby enhances the degree of reliability.

d. Up-to-Date Information: In the Computerised Accounting Systems, whenever the new accounting data is entered and stored, the existing accounting records automatically gets updated.

e. Real-Time User Interface- Most of the automated accounting systems are interlinked through a network of computers. The availability of information to various users at the same time on the real-time basis is facilitated under computerised system of accounting. This is very difficult to avail such facility under manual system as this call for availability of multiple copies of the accounting records that can be accessed by many users at the same time.

f. Automated Document Production: Under Computerised Accounting Systems, the accounting reports such as, Cash Book, Trial balance, Statement of Accounts, etc. is very easy to obtain. This is because most of the computerised systems have standardised and user-defined format of accounting reports that are generated automatically.

g. Scalability: The computerised systems of accounting are highly scalable as there requirement of additional manpower is mainly confined to data entry for recording and storing the additional vouchers in the computers. Thus, the additional cost of processing additional transactions is meagre as compared to the cost associated with hiring new accountants to handle additional transactions.

h. legibility: In Computerised Accounting Systems, the accounting records are typed and presented in standard fonts. The various characters especially numbers, alphabets, graphics, etc. are more clear and can be read without any difficulty and ambiguity.

Question 5.
Describe the various types of accounting software along with their advantages and limitations.
Answer:
The various types of accounting software are:
Ready-to-use Software- This type of software is readily available in the market with prescribed and standard features. This accounting software is basically used by the small size business enterprises, where the number of transactions is not so large. The cost of its installation and maintenance is also low. It has limited number of users, its adaptability is very high as it is relatively easier to learn and operate. It does not have a wide scope to link it with other information systems.

Advantages of Ready-made Accounting Software
a. This software is easily available in the market.
b. It is less expensive, as it comes with basic and standard features.
c. It involves a lesser need for training.
d. It is less sophisticated.
e. Its adaptability is very high as it is relatively easier to learn and operate.
f. It is suitable for small-size business enterprises.

Disadvantages of Ready-made Accounting Software
a. It has limited number of users.
b. It is not suitable for medium and large business organisation, where the number of transactions is very large.
c. It fails to cater the specific needs of the users, d. It suffers from the low level of data secrecy.
e. It does not have a wide scope to link it with other information systems.

Customised Software: Customised software is the software that has standardised features to meet the special requirements of the users. It provides the scope of changing the features of accounting software. The functions of this software can be programmed as per the needs and requirements of the users. This type of software best suits the needs of medium and large businesses. Its cost of installation and maintenance is comparatively higher. It can be easily linked to the other information systems.

Tailored Software: Tailored or Tailor-made accounting software is the software that is developed as per the specifications and requirements of the users. This accounting software is generally used in the large business organisations with multi-user and geographically scattered locations. It is designed to meet the specific needs of the users and form an integral part of the organisational MIS. It has infinite number of users.

Advantages of Customised and Tailor-made Accounting Software
a. This software is suitable for medium and large business organisation.
b. It caters the specific requirements and needs of the users.
c. It can be modified as per the needs of the organisation.
d. It has high level of security’ and minimises the loss and unauthorised access of data.
e. It cannot be easily imitated or duplicated in the market due to difference in the needs and requirements of different users.
f. It does not involve high cost of training as the training can be imparted within the ‘ organisation by the experienced personnel.
g. It can be easily linked to the other information systems, h. It forms an integral part of the organisational MIS.

Disadvantages of Customised and Tailor-made Accounting Software
a. It involves high cost of installation and maintenance.
b. Developing customised software is a time-consuming process and involves high cost of development.
c. Maintenance of this software is difficult as there exists limited availability of knowledge to the developers.
d. It lacks standard training module.

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Question 6.
‘Accounting software is an integral part of the Computerised Accounting Systems’ Explain. Briefly list the generic considerations before sourcing accounting software.
Answer:
The accounting software does form an integral part of the Computerised
Accounting Systems. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals. This is one of the important aspects that should be taken care of before introducing Computerised Accounting Systems, as the accounting professionals are responsible for accounting and the not computers.

The following are some of the important points that should be taken into consideration before introducing accounting software in an organisation.
1. Flexibility: This is the most important factor that should be considered before sourcing accounting software. The accounting software should be flexible in form of data entry, retrieval of data and generating design of reports. The software should be able to run on different computers having different operating systems and having different configurations. It should provide some flexibility among its users.

2. Cost of Installation and Maintenance: The selection of accounting software largely depends upon its cost to the organisation. The cost of accounting software includes cost of installing the related components and hardware, maintenance and alteration costs, cost of training the staff and cost involved in recovering data in case of data failure. An organisation needs to evaluate the benefits of the software against its costs.

3. Size of Organisation The size of an organisation also determines the selection of accounting software. The small-sized organisations, where the volume of business transactions is not so large, usually opt for simple and single user oriented software. On the other hand, large scale organisations, where the volume of business transactions is very large choose the latest and sophisticated software for meeting the multi-user requirements.

4. Training Needs- Another factor that affects the choice of software is the training needs.There is some accounting software that requires comparatively lesser training and is more user-friendly. While, there are some other complicated software that requires continuous and thorough training.

5. Level of Secrecy: The level of expected security is one of the important factors that an organisation bears in mind before sourcing accounting software. Software should be able to prevent the unauthorised access and manipulation of data. It should have in built features of security.

6. Utilities/MIS Reports- Another factor which helps in determining the software selection isthe MIS reports and the extent to which they are used in the organisation.

7. Vendor Reputation and Capability- The selection of software is also affected by the capability and competence of the vendor. It depends upon the reputation of the vendor in the market, the user-reviews of the similar software, the extent of post-sales support services from the vendors, etc.

‘Computerised Accounting Systems are best form of accounting system’. Do you agree? Comment.
Yes, we agree with this statement that ‘Computerised Accounting Systems are best form of accounting system’. It becomes very easier to work with Computerised

Accounting Systems leading to reduction in the accounting errors. Moreover, the computerised accounting reports are highly reliable, thereby enhances the overall efficiency.

Due to the following positive aspects, the Computerised Accounting Systems certainly enjoy an edge over the Manual Accounting Systems.
a. Speed: The speed of a computer is very high and takes very less time in performing various difficult operations. The accounting data is processed Comparatively faster through the Computerised Accounting Systems than it can be done through the manual efforts.

b. Accuracy: In Computerised Accounting Systems, the possibility of errors is minimised or reduced as the primary accounting data is entered only once for preparing various accounting reports and for subsequent usage and processes.

c. Reliability: As the Computerised Accounting Systems is well-equipped in performing repetitive operations, so it is comparatively more reliable to perform the operations than the manual system. Also, the Computerised Accounting Systems overcome the limitation of Manual Accounting Systems such as tiredness, boredom or fatigue, etc., thereby enhances the degree of reliability.

d. Up-to-Date Information: In the Computerised Accounting Systems, whenever the new accounting data is entered and stored, the existing accounting records automatically gets updated.

e. Real-Time User Interface- Most of the automated accounting systems are interlinked through a network of computers. The availability of information to various users at the same time on the real-time basis is facilitated under computerised system of accounting.

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f. Automated Document Production: Under Computerised Accounting Systems, the accounting reports such as, Cash Book, Trial balance, Statement of Accounts, etc. is very easy to obtain. This is because most of the computerised systems have standardised and user-defined format of accounting reports that are generated automatically.

g. Scalability: The computerised systems of accounting are highly scalable as the requirement of additional manpower is mainly confined to data entry for recording and storing the additional vouchers in the computers. Thus, the additional cost of processing additional transactions is meagre as compared to the cost associated with hiring new accountants to handle additional transactions.

h. Legibility: In Computerised Accounting Systems, the accounting records are typed and presented in standard fonts. The various characters especially numbers, alphabets, graphics, etc. are more clear and can be read without any difficulty and ambiguity.

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