computers in accounting ppt easy to read or explain (understandable)

1. Computers In Accounting
Chapter - 22

2. INTRODUCTION
Definition :
“ A computer is a data processer that can performs
substantial computations, including numerous arithmetic
and logic operations, without intervention of human
operator during the run.”
-International Standards Organization
Meaning of computers :
computer is an electronic device, which is capable of performing variety of
operations as directed by set of instructions. This set of instructions is called

3. ELEMENTS OF COMPUTER SYSTEM
Set of instructions is called
Program. Set of program is
Called software
Example :
word
excel etc..
People are interacting
with computer and
executing the program
Example :
user is typing in
the word
Physical components of the
computer
Example :
keyboard
mouse etc…

4. Components of hardware :
1. Motherboard: The main circuit of your computer. Is also known as logic board.
2. Processor: A processor is a small chip that generally resides in motherboard.
CPU(Central Processing Unit) is the brain of the computer.
basic parts of a processor :
ALU(arithmetic and logic unit)which performs arithmetic and logical operations.
Memory unit A processor has its own memory it in the shape of small cells.
Control unit controls the input and output device of the computer.
3. Primary Storage Memory: RAM(random access memory) volatile memory
ROM(read only memory)non volatile memory
HARDWARE

5. Components of hardware :
4. Secondary Storage Memory: It can not be processed directly by the CPU. The data stored in
secondary memory is permanent until the user erases the data.
types of secondary storage :
Online storage media: Part of computer where OS (Operating System)is
stored.
Near-Line storage device: It is optional media like magnetic tape devices.
Offline storage media: This is for the distribution of data from one computer to
another and so on like pen drive, CD etc…
5. Keyboard: It is an input device is used for input of text or numbers into computer in the CUI
HARDWARE

6. Components of hardware :
6. Sound card and Speakers: Output device music is stored as digital data in the computer s
converted into analog data of sound waves.
7. Monitor and LCD: The monitor displays the computer’s user interface and open programs,
allowing the user to interact with the computer, typically using mouse or keyboard.
8. printers: Are device used for producing information as hardcopy , i.e., in a printed form.
two types of printers :
(i) Impact printers: head of the printer touches the paper during printing .
(i) non impact printers: head of the paper does not touches the paper.
HARDWARE

7. Divided into three :
SOFTWARE
Operating software
Utility software Application software
Usually focuses on how the
computer infrastructure
operates
Interface between user
and computer
Designed and developed for
Performing certain jobs

8. Meaning :
People interacting with the computer and executing the program
or software are known as Human ware. They passed on the input based on
which the computer will carry out specified operations in accordance with a
set of instructions, i.e., software.
HUMAN WARE

9. Benefits of computer system
• Speed: It can perform at a much higher speed.
• Accuracy: It performs jobs at high degree of
accuracy.
• Reliability: Computers are immune to tiredness,
boredom or fatigue. They are more reliable than
human being.
• Versatility: It refers to the ability of computers to
variety of task, simple as well as complex.
• Storage: Have huge capacity to store data.

10. Limitations of computer system
• Lack of common sense: since computer work
according to the stored programs, they simply
lack of common sense.
• Zero IQ: computers are dump devices with zero
Intelligence Quotient(IQ).
• Danger of system failure: sometimes hardware
may get damages.

11. Meanings :
• Information System: set of components for collecting, storing,
processing, and communicating information.
• Data: basic components of the information, raw facts and figure.
• Information: information is the data that is processed and become useful,
not meaningful.
Information System

12. Divided into two,
Information System
Information System
Management Information SystemAccounting Information System

13. Management information system
Information System

14.  Difference between Data and MIS ;
data information communication decisions
 MIS as a tool for decision making ;
MIS is a process of compilation of that data in relevant
information which will be handy for the management in its decision making
process
Information System

15. 6r’s of MIS
• Right information(process)
• Right place(board)
• Right form(marking scheme)
• Right person(HOD)
• Right time(3 months)
• Right cost(without malpractices)

16. Accounting information system
Information System

17. Components of (AIS)
• data; data are all relevant financial and business
information.
• Procedure; steps.
• Technology; computer used to collect, store,
retrieve, process the data and processed data
information to its user.
• Control; security that protects data.
• People; people are its user.

18. Information System
Components of AIS

19. Information System
Management Information System
Accounting
Information
System
Manufacturing
Information
System
Human Resource
Information
System
Marketing
Information
System

20. • Data Interface between the Information System----
It receives information and provides information to the other
functional MIS.
• Relationship of AIS with other Information System----
(AIS) is a key department within the organization as it assists in an
organization.
Information System

21. Information System
Accounting Information
Department
Marketing
Department
Manufacturing
department
Human Resource
department
Purchase order,
Debtors, OS
Sales report
Salary,
wages

22. Information System
AIS and Management information system ;
Business process in production department may involve the following
Activities :
• Preparation of plans and schedules
• Issue of material requisition forms and job cards
• Issue of inventory
• raw materials
• Handling of vendors invoice
• Payment of vendors

23. Information System
AIS and Marketing information system
business process in the marketing and sales department may involve the
following activities ;
• Inquiry
• Contact creation
• Entry of orders
• Dispatch of goods
• Billing to customers

24. Information system
Design of accounting report :
when the related information is summarized to meet a
particular need, it is called as a report.
• Relevance
• Timeliness
• Accuracy
• Completeness
• summarization

25. Steps to designing an accounting report
• Clearly
• Self documentation
• Answerable
• Effective & efficient

26. MIS report
• Debtors Report
• Creditors Report
• Routine Report
• Exception Report
• Financial statements
• Other Reports

27. Automation of Accounting Process
Meaning :
automation of accounting process means carrying out
the accounting function by means of an accounting software
where human intervention in minimum. It is fed in the
accounting software of the business and there after the
remaining function such as posting into ledger account,
balancing, trial balance, etc...

28. Stages of accounting
1. Planning
2. Selecting appropriate accounting software
3. Selecting appropriate computer hardware
4. Chart of accounts
5. Grouping of accounts
6. Generation of accounts

29. Comparison between manual and
computerized accounting system
• Identifying financial transaction
• Recording
• Classification
• Summarizing
• Adjustment entry
• Grouping of accounts
• Financial statement

30. Automation of accounting process
Advantages of (CA)
• Large volume of transaction
• Security
• Lower cost
• Less paper work
• Updating
• Financial statements
Disadvantages of (CA)
• Controls
• Data corruption
• Trained computer operation
• Limitations of software

31. Accounting Software
1. Readymade software ;
software that are developed not for any specific
user but for the general purpose.
(i) Readymade software are economical
(ii) Are available off the self
(iii) Are developed by a group of experienced
(iv) software like any other product, requires maintenance
(v) Used by a number of users

32. Accounting Software
Readymade Software
Example
• Word
• Power point

33. Accounting Software
2. Customized Software :
this is software which is specially made for an
organization as per their requirement.
3. Tailor-made Software :
the term tailor made software refers to designing and
developing user specific software.

34. Accounting Software
Customized Software
Example
• Attendance system
• Word
• Excel
• Photoshop

35. Accounting System
Ready-made Software
Example
• Government bank
• Insurance companies
• manufacturers

36. Sourcing of Accounting Software
• Flexibility
• Cost of installation and maintenance
• Size of organization
• Ease of adaptation and training need
• Secrecy maintenance
• Exporting/importing data facility