Accounting systems - manual and computerized - class-XI

In a manual system of accounting, the preparation of financial statements pre-supposes the availability of trial balance. However, in computerised accounting, there is no such requirement.

The danger of the system crashing due to hardware failures and subsequent loss of work is a serious limitation of computerised accounting system. However, providing for back-up arrangements can obviate this limitation.

In a manual accounting system, transactions recorded in the books of original entry are further classified by posting into ledger accounts. This results in transaction data duplicity. In computerised accounting, no such data duplication is made to cause classification of transactions.

A computerised accounting system is an accounting information system that processes the financial transactions and events as per Generally Accepted Accounting Principles (GAAP) to produce reports as per user requirements. Every accounting system, manual or computerised, has two aspects.

The advantage of computerised accounting system, storage and retrieval, allows the users to store data in a manner that does not require a large amount of physical space.

In a manual accounting system Adjusting entries are
recorded to match the expenses of the accounting period with the revenues
generated by them.

Computerized accounting systems are designed to automate the recording, processing, and reporting of financial transactions.

Modern accounting software is flexible and can be configured to support both single-entry and double-entry bookkeeping systems.

Access control in computer systems is maintained by both physical security (like a librarian or terminal room access) and logical security (like passwords). Therefore, combining these methods provides a more robust security framework.

A check digit is a form of redundancy check used for error detection on identification numbers. It involves appending a digit calculated from the other digits in the number to ensure data integrity during input.

In a CIS environment, errors are actually more systemic because a single programming error can affect every transaction processed by that system. Manual systems are prone to random human errors, but computer systems are prone to consistent, systemic errors.