Question 1

The components of Computerised Accounting System are :
(a) Data, Report, Ledger, Hardware, Software;
(b) Data, People, Procedure, Hardware, Software;
(c) People, Procedure, Ledger, Data, Chart of Accounts;
(d) Data, Coding, Procedure, Rules, Output.

Accepted Answer

The correct answer is (b) Data, People, Procedure, Hardware, Software. These are the essential components of a Computerised Accounting System as they cover the data to be processed, the people who operate the system, the procedures or methods used, and the hardware and software required for processing. — A Computerised Accounting System consists of data (financial transactions), people (users and operators), procedures (methods and rules for processing data), hardware (computers and devices), and software (accounting programs). Option (b) correctly lists these components.

Question 2

The Computerised Accounting System refers to :
(a) Printing of Balance Sheet and Profit and Loss Accounts using computer;
(b) Processing of accounting transaction through computer and produce records and reports;
(c) Processing of accounting related data and printing reports;
(d) None of the above.

Accepted Answer

The correct answer is (b) Processing of accounting transaction through computer and produce records and reports. This option best describes the full scope of a Computerised Accounting System, which involves processing transactions and generating accounting records and reports. — A Computerised Accounting System is not just about printing reports but involves processing accounting transactions using computers to maintain records and generate reports. Hence, option (b) is the most comprehensive and correct.

Question 3

The components of Computerised Accounting System refers to :
(a) Business transactions are analysed, transactions recorded, prepare trial balance, preparation of balance sheet and profit and loss account;
(b) From data entry to preparation of final statements;
(c) Transformation of manual accounting system to CAS;
(d) None of the above.

Accepted Answer

The correct answer is (b) From data entry to preparation of final statements. This option correctly describes the components of a Computerised Accounting System as it covers the entire process from entering data to generating final financial statements. — The components of a Computerised Accounting System include all steps from data entry, processing, and recording to the preparation of final financial statements like balance sheet and profit and loss account. Option (b) summarizes this process correctly.

Question 4

The CAS should be
(a) Simple and integrated, transparent, accurate, scalability, reliability;
(b) Complex, Accurate, Transparent, Faster to work;
(c) Able to transform the manual accounting system to computerised accounting system;
(d) None of the above.

Accepted Answer

The correct answer is (a) Simple and integrated, transparent, accurate, scalability, reliability. These are the desired qualities of a Computerised Accounting System to ensure ease of use, accuracy, and reliability. — A good Computerised Accounting System (CAS) should be simple to use, integrated to cover all accounting functions, transparent for audit and control, accurate in processing, scalable to grow with business needs, and reliable to ensure consistent performance. Option (a) lists these qualities.

Question 5

The Grouping of Accounts means the classification of data from :
(a) Asset, liabilities and capital
(b) Asset, capital, liabilities, revenue and expenses
(c) Asset, owners equity, revenue and expenses
(d) None of the above.

Accepted Answer

The correct answer is (b) Asset, capital, liabilities, revenue and expenses. Grouping of accounts involves classifying accounts into these major categories for better organization and reporting. — In accounting, grouping of accounts means classifying all accounts into categories such as assets, capital, liabilities, revenue, and expenses. This classification helps in preparing financial statements and analysis. Option (b) correctly lists these groups.

Question 6

Codification of Accounts required for the purpose of :
(a) Hierarchical relationship between groups and components
(b) Data processing faster and preparing of final accounts
(c) Keeping data and information secured
(d) None of the above.

Accepted Answer

The correct answer is (b) Data processing faster and preparing of final accounts. Codification helps in organizing accounts systematically, which speeds up data processing and preparation of financial statements. — Codification assigns codes to accounts which helps in quick identification, classification, and processing of data. This facilitates faster data processing and easier preparation of final accounts. Option (b) best describes this purpose.

Question 7

Method of Codification should be :
(a) Such that it leads to grouping of accounts
(b) An identification mark.
(c) Easy to understand, cryptic, and leads to grouping of accounts
(d) None of the above

Accepted Answer

The correct answer is (c) Easy to understand, cryptic, and leads to grouping of accounts. The codification method should be simple yet meaningful to facilitate grouping and identification. — A good codification method should be easy to understand so users can quickly identify accounts, cryptic to save space and time, and should help in grouping accounts logically. Option (c) covers all these aspects.

Question 8

The need of Codification is :
(a) The Encryption of data
(b) The Generation of mnemonic code
(c) To secure the accounts, reports, etc.
(d) Easy to process data, keeping proper records

Accepted Answer

The correct answer is (d) Easy to process data, keeping proper records. Codification simplifies data processing and helps maintain organized records. — Codification assigns codes to accounts which makes data processing easier and helps in maintaining proper and systematic records. While encryption and mnemonic codes are related concepts, the primary need here is ease of processing and record keeping. Hence, option (d) is correct.

Question 9

What is the activity sequence of the basic information processing model?
(a) Organise data, process data, and collect data
(b) Collect data, organise and process data, and communicate information
(c) Process data, organise data, and collect data
(d) Organise data, collect data, and communicate information

Accepted Answer

The correct answer is (b) Collect data, organise and process data, and communicate information. This sequence correctly represents the flow in information processing. — The basic information processing model involves first collecting data, then organizing and processing it to convert into useful information, and finally communicating the information to users. Option (b) correctly states this sequence.

Question 10

What are internal controls designed to do?
(a) safeguard assets and optimise the use of resource
(b) only achieve maximum revenue
(c) only safeguard assets
(d) only ensure accurate accounting records

Accepted Answer

The correct answer is (a) safeguard assets and optimise the use of resource. Internal controls are designed to protect assets and ensure efficient use of resources. — Internal controls are processes and procedures implemented to safeguard assets from theft or misuse and to ensure resources are used optimally and accounting records are accurate. Option (a) best describes the purpose of internal controls.

Question 11

What is a firm's payment to a supplier for merchandise inventory recorded in?
(a) Cash payment journal
(b) Purchases journal
(c) Sales journal
(d) Cash receipts journal

Accepted Answer

The correct answer is (a) Cash payment journal. Payments made to suppliers for merchandise inventory are recorded in the cash payment journal. — When a firm pays cash to a supplier for merchandise inventory, the transaction is recorded in the cash payment journal which tracks all cash outflows. The purchases journal records credit purchases, not payments. Hence, option (a) is correct.

Question 12

Where are amounts owed by customers for credit purchases found?
(a) accounts receivable journal
(b) general ledger
(c) sales journal
(d) accounts receivable subsidiary ledger

Accepted Answer

The correct answer is (d) accounts receivable subsidiary ledger. Amounts owed by customers for credit purchases are recorded in the accounts receivable subsidiary ledger. — The accounts receivable subsidiary ledger contains detailed information about amounts owed by each customer for credit sales. The general ledger contains summary accounts, and the sales journal records sales transactions. Hence, option (d) is correct.

Question 13

Why the computerisation of Financial Accounting is required and why is it useful?

Accepted Answer

Computerisation of Financial Accounting is required to increase the efficiency, accuracy, and speed of accounting processes. It helps in maintaining large volumes of data systematically, reduces human errors, facilitates quick retrieval of information, and supports timely decision-making. It is useful because it automates routine tasks, ensures consistency in accounting records, and provides real-time financial information to stakeholders. — The traditional manual accounting system is time-consuming and prone to errors. Computerisation automates data entry, processing, and reporting, which improves accuracy and saves time. It also allows for better data storage and security, and supports complex calculations and analysis that are difficult to perform manually.

Question 14

What is coding? Why codification is required for an Accounting System?

Accepted Answer

Coding is the process of assigning numbers, letters, or symbols to items or transactions to classify and organize them systematically. Codification is required in an Accounting System to simplify data entry, facilitate easy identification and retrieval of information, reduce errors, and ensure consistency in recording transactions. It helps in grouping similar accounts and transactions, making the accounting process more efficient and manageable. — In accounting, coding helps in categorizing accounts and transactions under a structured system, such as a chart of accounts. This systematic approach aids in faster processing and reporting, and supports better analysis and control.

Question 15

What are the salient features of Computerised Accounting Software?

Accepted Answer

The salient features of Computerised Accounting Software include: (1) Automation of accounting processes such as journal entries, ledger posting, and trial balance preparation; (2) Accuracy and speed in processing large volumes of data; (3) User-friendly interface for easy data entry and retrieval; (4) Generation of various financial reports and statements; (5) Data security and backup facilities; (6) Integration with other business functions like inventory and payroll; (7) Customization options to suit specific business needs; (8) Support for multiple users and concurrent access; (9) Error detection and correction mechanisms. — These features make accounting efficient, reduce manual errors, and provide timely and accurate financial information to users. The software also helps in compliance with accounting standards and regulations.

OVERVIEW OF COMPUTERISED

OVERVIEW OF COMPUTERISED — Study Notes

OVERVIEW OF COMPUTERISED ACCOUNTING SYSTEM

1.1 COMPUTERISED ACCOUNTING SYSTEM

Data and Information

Practice Questions — OVERVIEW OF COMPUTERISED

All 4 Chapters in Computerised Accounting System