Application of Computers in Handling The Accounts

application of
computers in
handling the
accounts
Meaning of Computer Accounting
 Accounting is the language of the business. Different parties such as

shareholders, stakeholders, tax authorities, stock exchanges, etc. are
interested in the accounting information for their varied needs.
 A full disclosure is insisted by Securities Exchange Board of India [SEBI] and
therefore, full information and its neat, simple, and quick presentation has
become very essential. Manually maintained accounting system may not be
able to provide all these facilities.
 In recent times, computers are being used to maintain the accounting records
and for the preparation, analysis, and interpretation of accounting
statements. Hence, the system operated through computers is called as
computerized accounting or simply, accounting in computerized environment.
Role of Computers in
Accounting
Role of Computers in Accounting:
The manual system of recording accounting transactions requires maintaining books of
accounts such as journal, cash book, special purpose books, and ledger and so on. From
these books summary of transactions and financial statements are prepared manually.
The advanced technology involves various machines, which can perform different
accounting functions, for example a billing machine. This machine is capable of
computing discount, adding net total and posting the requisite data to the relevant
accounts.
With substantial increase in the number of transactions, a new machine was developed
to store and process accounting data with greater speed and accuracy. A computer, to
which it was connected, operated this machine.
As a result, the maintenance of accounting data on a real-time basis became almost
essential. Now maintaining accounting records become more convenient with the
computerized accounting.
Objects of Introduction of Computers
in Accounting
 Labor Saving: Labor saving is the main aim of introduction of
computers in accounting. It refers to annual savings in labor cost or
increase in the volume of work handled by the existing staff.
 Time Saving: Savings in time is another object of computerization.
Computers should be used whenever it is important to save time. It is
important that jobs should be completed in a specified time such as
the preparation of pay rolls and statement of accounts. Time so saved
by using computers may be used for other jobs.
 Accuracy: Accuracy in accounting statements and books of accounts
is the most important in business. This can be done without any errors
or mistakes with the help of computers. It also helps to locate the
errors and frauds very easily.
Objects of Introduction of Computers
in Accounting
 Minimization of Frauds: Computer is mainly installed to
minimize the chances of frauds committed by the
employees, especially in maintaining the books of
accounts and handling cash.
 Effect on Personnel: Computer relieves the manual
drudgery, reduces the hardness of work and fatigue, and
to that extent improves the morale of the employees.
Special Features of Computerized
Accounting System
1. It leads to quick preparation of accounts and makes available the accounting
statements and records on time.
2. It ensures control over accounting work and records. 3. Errors and mistakes
would be at minimum in computerized accounting.
4. Maintenance of uniform accounting statements and records is possible.
5. Easy access and reference of accounting information is possible.
6. Flexibility in maintaining accounts is possible.
7. It involves less clerical work and is very neat and more accurate.
8. It adapts to the current and future needs of the business.
9. It generates real-time comprehensive MIS reports and ensures access to complete
and critical information instantly.
Advantages of Computerized
Accounting
 Better Quality Work: The accounts prepared with the use of computers are usually uniform,
neat, accurate, and more legible than manual job.
 Lower Operating Costs: Computer is a labor and time saving devise. Hence, the volume of job
handled with the help of computers results in economy and lower operating costs.
 Improved Efficiency: Computer brings speed and accuracy in preparing the records and
accounts and thus, increases the efficiency of employees.
 Facilitates Better Control: From the management point of view, greater control is possible and
more information may be available with the use of computer in accounting. It ensures efficient
performance in accounting work.
 Greater Accuracy: Computerized accounting ensures accuracy in accounting records and
statements. It prevents clerical errors and omissions.
SOFTWARE
WHAT DO YOU MEAN BY SOFTWARE?
 Software is a set of instructions, data or programs used to operate computers and

execute specific tasks. It is the opposite of hardware, which describes the physical
aspects of a computer. Software is a generic term used to refer to
applications, scripts and programs that run on a device. It can be thought of as the
variable part of a computer, while hardware is the invariable part.
DIFFERENT TYPES OF SOFTWARES
 Application software
 System software
 Programming software
 Drivers software
APPLICATION SOFTWARE
 The most common type of software, application software is a computer software

package that performs a specific function for a user, or in some cases, for another
application. An application can be self-contained, or it can be a group of programs
that run the application for the user. Examples of modern applications include
office suites, graphics software, databases and database management programs,
web browsers, word processors, software development tools, image editors and
communication platforms.
SYSTEM SOFTWARE
 These software programs are designed to run a computer's application programs

and hardware. System software coordinates the activities and functions of the
hardware and software. In addition, it controls the operations of the computer
hardware and provides an environment or platform for all the other types of
software to work in. The OS is the best example of system software; it manages
all the other computer programs. Other examples of system software include
the firmware, computer language translators and system utilities.
PROGRAMMING SOFTWARE
 Computer programmers use programming software to write code. Programming

software and programming tools enable developers to develop, write, test
and debug other software programs. Examples of programming software include
assemblers, compilers, debuggers and interpreters.
DRIVERS SOFTWARE
 Also known as device drivers, this software is often considered a type of system
software. Device drivers control the devices and peripherals connected to a
computer, enabling them to perform their specific tasks. Every device that is
connected to a computer needs at least one device driver to function. Examples
include software that comes with any nonstandard hardware, including special
game controllers, as well as the software that enables standard hardware, such as
USB storage devices, keyboards, headphones and printers.

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application of

 Accounting is the language of the business. Different parties such as

 Software is a set of instructions, data or programs used to operate computers and

 The most common type of software, application software is a computer software

 These software programs are designed to run a computer's application programs

 Computer programmers use programming software to write code. Programming

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