Role of Computers in Accounting

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MODULE - 2
Trial Balance and Computers

Computer and Computerised Accounting System

Notes

12
COMPUTER AND COMPUTERISED ACCOUNTING SYSTEM
With the expansion of business the number of transactions increased. The manual method of keeping and maintaining records was found to be unmanageable. With the introducton of computers in business, the manual method of accounting is being gradually replaced. And finally, the database technology has revolutionised the accounts department of the business. organisations. In this lesson, we will study about characteristics of computer, role of computers in accounting, need of computerised accounting, etc.

OBJECTIVES After studying this lesson, you will be able to: state the meaning and characteristics of computer; describe the components of Computer: explain the limitations of a Computer; explain the role of computer in accounting; differentiate between manual accounting and computerised accounting; state the need for computerised accounting; describe the basic requirements of computerised accounting. 12.1 COMPUTER AND ITS CHARACTERISTICS Computer is an electronic device that can perform a variety of operations in accordance with a set of instructions called programme. It is a fast data processing electronic machine. It can provide solutions to all complicated situations. It accepts data from the user, converts the data into information and gives the desired result. Therefore, we may define computer as a device that transforms data into information. Data can be anything like marks

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ACCOUNTANCY

Computer and Computerised Accounting System obtained in various subjects. It can also be name, age, sex, weight, height, etc. of all the students, savings, investments, etc., of a country. Computer is defined in terms of its functions. Computer is a device that accepts data, stores data, processes data as desired, retrieves the stored data as and when required and prints the result in desired format. Characteristics of computer A Computer is better than human being. It possesses some characteristics. These are as follows: Speed It can access and process data millions times faster than humans can. It can store data and information in its memory, process them and produce the desired results. It is used essentially as a data processor. All the computer operations are caused by electrical pulses and travels at the speed of light. Most of the modern computers are capable of performing 100 million calculations per second. Storage Computers have very large storage capacity. They have the capability of storing vast amount of data or information. Computers have huge capacity to store data in a very small physical space. Apart from storing information, today’s computers are also capable of storing pictures and sound in digital form. Accuracy The accuracy of computer is very high and every calculation is performed with the same accuracy. Errors occur because of human beings rather than technological weakness; main sources of errors are wrong program by the user or inaccurate data. Diligence A computer is free from tiredness and lack of concentration. Even if it has to do 10 million calculations, it will do even the last one with the same accuracy and speed as the first.

MODULE - 2
Trial Balance and Computers

Notes

ACCOUNTANCY

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MODULE - 2
Trial Balance and Computers

Computer and Computerised Accounting System Versatility Computer can perform wide range of jobs with speed, accuracy, and diligence. In any organisation, often it is the same computer that is used for diverse purposes such as accounting, playing games, preparing electric bills, sending e-mail and so on. Communication Computers are being used as powerful communication tools. All the computers within an office are connected by cable and it is possible to communicate with others in the office through the network of computer. Processing Power Computer has come a long way today. They began as mere prototypes...
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