Solution: Unix and Linux are examples of multi-user operating systems used to handle voluminous data and complex reporting requirements.

Transcription

1 1. State the fur basic requirements f a database applicatins. Slutin: The fur basic requirements f database applicatins are Frnt-end interface Back-end database Data prcessing Reprting System 2. Name the varius categries f accunting package. Slutin: The varius categries f accunting packages are Ready t use Custmized Tailred 3. Give examples f tw types f perating systems. Slutin: Unix and Linux are examples f multi-user perating systems used t handle vluminus data and cmplex reprting requirements. 4. List the varius advantages f cmputerised accunting systems. Slutin: Large Vlume f Transactins: In the present-day business envirnment, the transactins f a business are nrmally large in vlume. The cmputerized accunting system can stre and prcess such vluminus transactins with speed and accuracy. Scalability: A cmputerized accunting system is scalable t handle the grwing transactins. Security: The accunting data under the cmputerized envirnment is safer than the accunting data under the manual system. The data can be kept secure by using a passwrd, i.e., allwing nly authrized users t access the data. Timely Reprting: Availability f reprts n time enables the management t take quick decisins, which is an imprtant element fr the success f an enterprise. A cmputerized accunting system makes these reprts available as and when required. 1

2 Lwer Cst: The cst f maintaining bks f accunts under the cmputerized prcess is lwer than in the manual prcess. Less Paper Wrk: Under the cmputerized prcess, there is less paper wrk as cmpared t the paper wrk in the manual prcess. Flexible Reprting: Reprting under the cmputerized prcess is flexible in cmparisn t the manual prcess. The database can be prcessed further t btain the desired reprt. Fr example, data relating t debtrs can be analyzed t ascertain the list f custmers t whm sales abve Rs. 1,00,000 has been made in an accunting year r f the regular custmers f the enterprises and s n. Queries: Replies t queries based n external factrs can be btained easily under a cmputerized prcess. Fr example, list f debtrs wh have nt paid n time can be taken ut by prcessing the database. Accurate: Cmputer statements are far mre accurate in cmparisn t manual statements. Updating: Updating and treatment f wrng transactins are easily dne. Financial Statements: Frm the day bk, the Vucher Psting sftware can manage the General Ledger, Trial Balance and Balance Sheet. 5. Give tw examples each f the rganisatins where ready-t-use, custmised, and tailred accunting packages respectively suitable t perfrm the accunting activity. Slutin: The term Custmised Sftware means making changes in the readymade sftware t suit the specific requirements f the user, i.e., making it user specific. The sftware available ff-the-shelf is mdified t suit the requirements f the user. Fr example, the design f the invice is changed t the specificatins f the user. The develper, t meet specific user requirements, can mdify all the readymade sftwares. The term Tailr made sftware refers t designing and develping user specific sftware. These sftwares, being user specific, are nt available ff the shelf but are develped t meet the requirement f the user n the basis f discussin between the users and the develpers. Readymade sftwares are the sftwares that are develped nt fr any specific user but fr the users in general. Since, the readymade sftwares are fr general user, it is nt necessary that all the mdules f such sftwares are f use fr every user. It is likely that a particular mdule says Payrll may ndt be used because the enterprise has very few emplyees. 6. Distinguish between a ready-t-use and tailred accunting sftware. Slutin: S. N. Basis Ready t Use Tailred 1. Nature f business Small, cnventinal business Large, typical business 2

3 2. Cst f installatin and maintenance Lw High 3. Expected level f secrecy Lw Relatively high 4. Number f users and their interface 5. Linkage t ther infrmatin system Limited Restricted Unlimited 6. Adaptability High Specific 7. Training requirements Lw High Yes 7. Define a cmputerised accunting system. Distinguish between a manual and cmputerised accunting system. Slutin: Cmputerised Accunting System refers t a system wherein the accunts f the enterprise are maintained n a cmputer. An accunting system has tw aspects; first, it has t wrk under a set f well-defined accunting cncepts and principles and, secndly, it has t maintain recrds and generate reprts as defined by the user. These aspects can be fulfilled by prcessing the transactins and events in accrdance with the accunting principles and adpting the sftware which is capable f generating the user-defined reprts. Accunting is a prcess f identifying, recrding, classifying and summarizing financial transactins t prduce financial statements. Let us discuss the prcesses under the tw accunting prcesses i.e., manual prcess and cmputerized prcess, fr the purpse f cmparisn. Identifying Financial Transactins: Identifying financial Transactins and recrding them in the bks f accunts by applying the principle f accunting is a manual prcess carried ut by an authrized persn r n the basis f the accunting manual. This prcess is, thus, cmmn under bth the prcesses. Recrding: the prcess f recrding transactin in the bks f riginal entry, psting them in the ledger accunts, perfrming mathematical functins, i.e., adding, subtractin and ttaling, are carried ut manually under the manual prcess. In the cmputerized prcess, transactins are recrded in the bks f accunts and the remaining functins are perfrmed withut any further prcess r cmmand being carried ut manually. Classificatin: in the manual prcess, the transactins are recrded in the bks f riginal entry and are psted int the ledger accunts. It means that, after recrding the transactin, anther prcess f psting is perfrmed. In cmputerized accunting, the psting prcess is carried ut by internal srting f data, i.e., with the help f utility r applicatin sftware, withut any further prcess. Summarizing: in the manual system f accunting, the data under each ledger is summarized and a balance f each accunt is ascertained t prepare a Trial Balance. As a result, preparing ledger accunts is essential t prepare a Trial Balance. In the cmputerized prcess, a transactin r event, nce recrded, is stred in the database and can be prcessed t prduce a Trial Balance directly. Adjustments Entries: Adjustment entries are passed t rectify an errr r t fllw the matching cncept f accunting i.e., matching the cst with revenue. The prcess f passing adjustment entries can be equated with the recrding prcess. These entries are identified and recrded in the bks f accunts. The remaining prcess is the same as discussed abve. 3

4 Gruping Accunts: One f the basics f crrect accunting is determining whether a transactin is capital r revenue in nature and accrdingly, which accunt head is t be debited r credited. Once this decisin is taken, the accunt is gruped as an asset, a liability, an incme r an expense at the time f preparing the financial statements. The abve prcess is fllwed when the manual system f accunting is adpted. Hwever, in cmputerized accunting, whether an accunt head is an asset, a liability, an incme r an expense, is decided at the time f the transactin takes place, as in the case f manual accunting. It is als defined whether the particular head f accunt shall be shwn as an asset r liability, r an incme r expense. Financial Statements: In the manual prcess, availability f the Trial Balance is essential t prepare the financial statements. In the cmputerized prcess, financial statements are generated frm the system itself and hence, there is n need t have a Trial Balance. 8. Discuss the advantages f cmputerised accunting system ver the manual accunting system. Slutin: 1. Large Vlume f Transactins: In the present-day business envirnment, the transactins f a business are nrmally large in vlume. The cmputerized accunting system can stre and prcess such vluminus transactins with speed and accuracy. 2. Scalability: A cmputerized accunting system is scalable t handle the grwing transactins. 3. Security: The accunting data under the cmputerized envirnment is safer than the accunting data under the manual system. The data can be kept secure by using a passwrd, i.e., allwing nly authrized users t access the data. 4. Timely Reprting: Availability f reprts n time enables the management t take quick decisins, which is an imprtant element fr the success f an enterprise. A cmputerized accunting system makes these reprts available as and when required. 5. Lwer Cst: The cst f maintaining bks f accunts under the cmputerized prcess is lwer than in the manual prcess. 6. Less Paper Wrk: Under the cmputerized prcess, there is less paper wrk as cmpared t the paper wrk in the manual prcess. 7. Flexible Reprting: Reprting under the cmputerized prcess is flexible in cmparisn t the manual prcess. The database can be prcessed further t btain the desired reprt. Fr example, data relating t debtrs can be analyzed t ascertain the list f custmers t whm sales abve Rs. 1,00,000 has been made in an accunting year r f the regular custmers f the enterprises and s n. 8. Queries: Replies t queries based n external factrs can be btained easily under a cmputerized prcess. Fr example, list f debtrs wh have nt paid n time can be taken ut by prcessing the database. 9. Accurate: Cmputer statements are far mre accurate in cmparisn t manual statements. 10. Updating: Updating and treatment f wrng transactins are easily dne. 4

5 11. Financial Statements: Frm the day bk, the Vucher Psting sftware can manage the General Ledger, Trial Balance and Balance Sheet. 9. Describe the varius types f accunting sftware alng with their advantages and limitatins. Slutin: Accunting Sftwares can be categrized int- 1. Readymade Sftwares 2. Custmized 3. Sftwares 4. Tailr made Sftwares Readymade Sftware Readymade sftwares are the sftwares that are develped nt fr any specific user but fr the users in general. Since, the readymade sftwares are fr general user, it is nt necessary that all the mdules f such sftwares are f use fr every user. It is likely that a particular mdule says Payrll may ndt be used because the enterprise has very few emplyees. Similarly, a service enterprise will nt require VAT mdule while a retail enterprise will nt require Service Tax mdule. Sme f the readymade sftwares are Tally, EX, Busy and Prfessinal Accuntant. Out f these, Tally is very widely used. Readymade Sftware has its wn advantages and disadvantages. The advantages are- 1. Readymade sftwares are ecnmical Readymade sftwares are prepared nt fr any particular user but fr the user in general. It means develpment cst f the sftware is nt laded n a single sftware fr determining the cst and thus selling price. The price f the sftware is determined n the basis f number f pieces expected t be sld. On the ther hand, user specific sftwares are expensive as the develpment cst is laded n ne sftware. 2. Readymade sftwares are available ff-the-shelf It, therefre, saves time that may be required fr develpment f tailr-made sftwares r fr custmizatin. Develpment f a sftware cnsumes cnsiderable time bth at the user end and sftware develpment end. User will have t explain its requirements t sftware develper wh n the basis f his understanding will develp sftware, test it with a dummy data, debug the sftware t the best f his understanding befre handing it t the user. All these activities cnsume time. On the ther hand, readymade sftware requires nly installatin and are ready fr use. 3. Readymade Sftwares are develped by a grup f experienced prfessinals it therefre, addresses the prblems that may get verlked if the user specific sftware is develped. 4. Sftwares like any ther prduct, requires maintenance Readymade sftwares being sld t number f users, has better and ecnmical after sales maintenance service. After sales 5

6 maintenance service, in the case f user specific sftwares will nt nly be expensive but time cnsuming as well. 5. Readymade sftwares are used by a number f users Therefre, trained accunting persns are easily available. On the ther hand, in the case f tailr-made sftwares, every time a new persn is recruited, training will have t be imprted. The disadvantages f Readymade Sftwares are- 1. Readymade sftwares are Windw-based sftwares, which supprt nly LaserJet printers fr utputs in physical frm. Printing by LaserJet printers is mre expensive than Dt-Matrix Printers. 2. Nrmally, readymade sftwares d nt have the facility f secndary back-up. It means, in case f data lss, the entire data may nt be recvered. But, this limitatin can be vercme by taking regular back up f accunting data. Custmized Sftware The term Custmised Sftware means making changes in the readymade sftware t suit the specific requirements f the user, i.e., making it user specific. The sftware available ff-the-shelf is mdified t suit the requirements f the user. Fr example, the design f the invice is changed t the specificatins f the user. The develper, t meet specific user requirements, can mdify all the readymade sftwares. Hwever, the user has t bear the cst f such changes. The advantages and disadvantages f readymade sftware are als the advantages f custmized sftware. Tailr made Sftware The term Tailr made sftware refers t designing and develping user specific sftware. These sftwares, being user specific, are nt available ff the shelf but are develped t meet the requirement f the user n the basis f discussin between the users and the develpers. Advantages f Tailr made Sftware are 1. It, being user specific, takes care f the accunting reprts and MIS that may be required by the user and the management f the enterprise. 2. The sftware being tailr-made, the enterprise may have t engage a sftware engineer t maintain it. In ther wrds, the prblems faced can be cuntered immediately. 3. Well trained users use the sftware and therefre they can maximize sftware utilizatin. Disadvantages f Tailr made sftware are 1. The develpment cst f the sftware is much higher than the cst f readymade r custmized sftware. 2. In case the accunting persn leaves the jb, it take sme time befre the new persn becmes fully cnversant with the sftware. 3. Develpment and maintenance csts are higher than in the case f readymade r custmized sftware. 6

7 10. Accunting sftware is an integral part f the cmputerised accunting system Explain. Briefly list the generic cnsideratins befre surcing an accunting sftware. Slutin: It is essential t cnsider sme factrs befre surcing an accunting sftware, i.e., 1. Flexibility A cmputerized accunting system must be flexible in respect f data entry, retrieval f data and generating designs f reprt. The user shuld be able t run the sftware n a variety f cmputer envirnments and machines, that is, n any cnfiguratin f cmputers and available perating systems. 2. Cst f Installatin and Maintenance It is a must t cnsider that the cst f the accunting sftware, its relevant hardware and the maintenance, cst f additin f mdules, training f staff, updating f versins and data recvery in case f data failure are negtiable and within the ability f the rganizatin t affrd it. 3. Size f rganizatin An accunting system must be accrding t the size f the rganizatin, i.e., vlume f business transactins, multi user requirements. 4. Ease f Adaptatin and Training Needs sme accunting sftwares are user friendly and require a simple training t the users. Hwever, sme ther cmplex sftware packages, linked t ther infrmatin systems, require intensive training n a cntinuus basis. The sftware must be capable f attracting users. 5. Expected Level f Secrecy (Sftware and Data) Security features f an accunting system sftware are als imprtant. Sftware shuld ensure that it prevents unauthrized access and manipulatin f data. In tailred sftware, the user rights may be restricted accrding t the departments and their relevant accunting sftware functins. 6. Exprting/Imprting Data Facility The sftware shuld allw easy data transfer ptin fr flexible reprting, such as transfer f infrmatin directly frm the ledger int the spreadsheet sftware like Ltus r Excel. 11. Cmputerised Accunting Systems are best frm f accunting system. D yu agree? Cmment. Slutin: Accunting refers t identifying transactins and events f financial nature, recrd them in the bks f accunt and prduce meaningful infrmatin fr the users. Thus, the fremst functin f accunting is t identify transactins and events f financial nature and recrd them in the bks f accunt. Accunting prcess means preparing vuchers fr the transactins, writing them in the Jurnal, psting the recrded transactins in the Ledger Accunts, drawing Trial Balance and thereafter, preparing the Financial Statements, i.e., Trading Accunt, Prfit and Lss Accunt and Balance Sheet. The accunting prcess, whether carried ut manually r by use f cmputers generates accunting recrds such as Cash Bk, Bank Bk, Jurnal, Purchases Bk, Sales Bk, Ledger and Trial Balance. Besides the accunting recrds certain reprts such as Payrll, Stck Reprt, Statutry Returns (VAT, CST, etc)., Debtrs Reprt, Creditrs Reprt and Exceptin Reprt., etc., are als prepared under bth the methd. 7

8 We have in the earlier chapters, discussed the accunting prcess, accunting cncepts and preparing the final accunts in detail. When the accunting is carried ut by means f cmputers, the accunting prcess remains exactly the same except that psting f recrded transactins t the ledger accunts and als the ttaling f individual accunts and drawing f trial balance is carried ut by the cmputers with the help f sftwares. The sftware may be Readymade Sftware; custmized Sftware r Tailr-made Sftware. We shall discuss the sftwares later in this chapter. Let us nw, discuss hw the cmputers are applied in accunting- We had discussed in the beginning f the chapter that cmputers perate n "Operating Sftwares r System, which make the necessary interface between the user and the cmputer hardware. An example f Operating Sftware is "Windws", "Windws XP" and "Windws Vista" etc. Accunting functin is carried ut utilizing accunting sftware. Accunting sftwares fall in the categry f "Applicatin Sftwares". The end prduct f accunting prcess is prducing financial statements, i.e., Trading, Prfit and Lss Accunt and the Balance Sheet and the accunting sftwares are s designed that the financial statements are prduced by the system itself. A credible financial statement can be prepared if the accunting cncepts and principles are fllwed. It necessarily means capital expenditure and capital incme r receipts be transferred t Balance Sheet while revenue expenditure and revenue incmes be transferred t Trading, Prfit and Lss Accunt. This bjective f accunting can be achieved when the accunt heads are defined in a manner that capital expenditures and capital incmes frm part f the Balance Sheet under apprpriate main head. Similarly, revenue expenditure and revenue incmes frm part f the Trading, Prfit and Lss Accunt. The prcess by which this bjective is achieved is knwn as "Gruping f Accunts". The prcess f "Gruping f Accunts" is carried ut by giving a cde t each main head, sub- heads and thereafter individual accunt heads. Cde f the main head signifies whether the accunt is an item belnging t assets, liabilities, expenses r incmes. Cde f the subhead signifies the head under which individual accunt head will appear. Accunt if wrngly cded, will lead t errrs f principle whereby an item f liability may be treated as incme and vice versa. Similarly, an item f asset may be treated as expense and vice versa. The financial statements prepared withut rectifying such errrs will reveal incrrect financial results and psitin. Therefre, extreme cautin needs t be exercised when gruping f accunts is dne and als when the transactin is recrded using cmputers. 8