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Meaning and importance of computerised accounting system - class-XII

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The identification of transactions, based on application of accounting principles is common to _________ accounting system.

  1. manual

  2. computerised

  3. Both (a) and (b)

  4. None of the above


Correct Option: C
Explanation:

Identifying is one of the activities in the context of comparison between manual and computerised accounting system. The identification of transactions, based on application of accounting principles is, common to both manual and computerised accounting system.

___________ is one of the four basic requirements under use of computers in any database oriented application, where an integrated set of objects constitute the report.

  1. Front-end Interface

  2. Reporting System

  3. Back-end Database

  4. Data Processing


Correct Option: B
Explanation:

Steps involved in designing accounting reports :-

1.Definition of objectives 

2.Structure of the report 

3.Querying with the database

4.Finalizing the report 

Therefore Reporting System is an integrated set of objects that constitute the report.

_________ is not an advantage of computerised accounting system.

  1. Speed

  2. Cost of Training

  3. Accuracy

  4. Up-to-Date Information


Correct Option: B
Explanation:

The advantages of computerised accounting system are speed, accuracy and up-to-date information, whereas cost of training is a limitation of computerised accounting system.

Which of the following is not an advantage of introducing computerized accounting systems?

  1. Increased job satisfaction

  2. Increased accuracy of entries

  3. Time saved through speed of inputs

  4. Costs involved in training staff to use system


Correct Option: D

A, the Works Manager, gets 5% commission of net

profits after charging his commission and Bs commission. B, the General Manager,

gets 10% commission on the net profits after charging his commission and As

commission. If the profit before charging commission of A and B is 1,000, the commission of A will be:

  1. 42.50

  2. 43.50

  3. 47.00

  4. 49.00


Correct Option: B

Which of the following is not an advantage of a computerized accounting system?

  1. Computers process transaction uniformly.

  2. Computers help alleviate human errors.

  3. Computers can process many transactions quickly.

  4. Computers leave a thorough audit trail which can be easily followed.


Correct Option: D

Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers?

  1. Demat account

  2. Securities Exchange Commission

  3. Depository Trust Company

  4. Federal Depository Insurance Corporation


Correct Option: A

Which of the following is not a function of generalized audit software?

  1. To aid in the radom selection of trasctions for substantive testing

  2. To run in parallel with the client's application software and compare the output.

  3. To test the mathematical accuracy by footing and cross-foot items in the accounting system

  4. To keep an independent log of access to the computer application software.


Correct Option: D

The computerised accounting system are ________.

  1. Scalable

  2. Less scalable

  3. Highly scalable

  4. None of the Above


Correct Option: C
Explanation:

In a computerised accounting system, the requirement of additional manpower is confined to data entry operators for storing additional vouchers. The additional cost of processing additional transactions is almost negligible because of which the computerised accounting system is highly scalable.

Which of the following statement is not distinguishing feature for computer based processing and manual processing?

  1. Errors in a CIS environment are less systemic as compared to errors in manual processing

  2. The potential for human error in the CIS environment is greater as compared to manual system

  3. In a computer based accounting system, audit trail is in electronic form

  4. Computer processing offers management a variety of analytical tools.


Correct Option: A

General controls will be ineffective when EDP department.

  1. Participates in computer software acquisition decisions

  2. Design Documentation for computerized operations

  3. Originate changes in master files

  4. Provide physical security for programme files


Correct Option: C

Which of the following activities would most likely be performed by EDP department?

  1. Authorising transactions

  2. Parity checks

  3. Distributing output

  4. Correction to transactional errors


Correct Option: C

To avoid invalid data input, a bank added an extra number at the end of each account number and subjected the new number to an algorithm. This techniques is known as _________. 

  1. dual read

  2. test for reasonableness

  3. check digit

  4. occurrence correction


Correct Option: C

When computer programme or files can be accessed from terminals, access can be limited to authorized individuals by ________. 

  1. appointing a librarian

  2. controlling passwords

  3. appointing EDP auditor

  4. both (A) and (B)


Correct Option: D

State whether the following statement are True or False:
Computer Accounts System is Single entry as well as Double entry system. 

  1. True

  2. False


Correct Option: A

State whether the following statement are True or False:
Computer Accounting System is used for recording the financial transaction. 

  1. True

  2. False


Correct Option: A

The internet has assisted in decreasing the ______ in issuing financial reports to users.

  1. time gap

  2. free from bias

  3. revenue

  4. None of the Above


Correct Option: A
Explanation:

Earlier the physical copies of financial reports were sent via post or courier (though the option is still available).

But now, with the advent of internet, it has become possible for the companies display the financial reports on their official website, it is convenient for any one sitting in any part of the world to refer to these reports and also to other information of the company.
This saves a lot of time of the company and also the other stakeholders.

In a manual accounting system, ___________ are made to adhere to the principle of cost matching revenue, whereas in computerised accounting system _________ are prepared and stored to follow the principle of cost matching revenue.

  1. adjusting entries, journal vouchers

  2. journal entries, journal vouchers

  3. adjusting entries, journal entries

  4. None of these


Correct Option: A
Explanation:

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

In computerized accounting, Journal vouchers are prepared and stored to follow the principle of cost matching revenue.

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

  1. MIS Reports

  2. Efficiency

  3. Legability

  4. Storage and Retrieval


Correct Option: D
Explanation:

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.

A computerised accounting system is an accounting information system that processes the ______ to produce reports as per user requirements.

  1. financial transactions and events

  2. cost transactions and events

  3. management transactions and events

  4. None of the above


Correct Option: A
Explanation:

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.

Transactions lead to data duplication in __________ accounting system.

  1. computerised

  2. manual

  3. both manual and computerised

  4. None of these


Correct Option: B
Explanation:

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.

____________by definition, is the process of identifying, recording, classifying and summarising financial transactions to produce the financial reports for their ultimate analysis.

  1. Cost accounting

  2. Accounting

  3. Management accounting

  4. Financial accounting


Correct Option: B
Explanation:

Accounting, by definition, is the process of identifying, recording, classifying and summarising financial transactions to produce the financial reports for their ultimate analysis.

An interactive link or a dialog between the user and database-oriented software through which the user communicates to the back-end database is ___________________.

  1. Back-end Database

  2. Front-end Interface

  3. Data Processing

  4. Reporting System


Correct Option: B
Explanation:

Front-end Interface is an interactive link or a dialog between the user and database-oriented software through which the user communicates to the back-end database.

___________ is a well-defined procedure blended suitably with the operating environment of the organisation.

  1. Accounting Framework

  2. Back-end Database

  3. Operating Procedure

  4. Data Processing


Correct Option: C
Explanation:

• Operating Procedure : It is a well-defined operating procedure blendedsuitably with the operating environment of the organisation. The use of computers in any database oriented application has four basic.

The danger of the system crashing due to hardware failures and the subsequent loss of work is a serious ___________ of computerised accounting system.

  1. advantage

  2. limitation

  3. advantage and limitation

  4. None of these


Correct Option: B
Explanation:

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.

The preparation of financial statements pre-supposes the availability of trial balance in ________ system of accounting.

  1. computerised

  2. manual

  3. both manual and computerised

  4. None of these


Correct Option: B
Explanation:

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.

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