Concepts and types of computerized accounting system - class-XII

Management Information System (MIS) is used the most common form of information system. A management information system is a system that provides the information necessary to take decision and manage an organisation effectively.

Every medium sized to large organisation has a well established information system that is meant to generate the information required for decision-making. With the increasing use of information system in organisations, Transaction processing systems (TPS) have started playing a vital role in supporting business operations.

Arithmetic and logic unit is responsible for performing all the arithmetic computations such as addition, subtraction, division, multiplication and exponentiation. In addition to this it also performs logical operations involving comparisons among variables and data items.

Information Technology (IT) follows the GIGO principle (Garbage in-Garbage out), it is necessary that input to the IT-based information system is accurate, complete and authorised. This is a achieved by automated by automating the input, A large number of devices are now available to automate the input process for a TPS.

A simple computerised accounting system accepts the complete transaction data as input; stores such data in computer storage media (say hard disk) and retrieves the accounting data for processing as and when required for generating an accounting report, as output. 

MIS is supportive of the institution's long-term strategic goals and objectives. MIS is viewed and used at many levels by management: Operational, Tactical and Strategic.

General controls relate to the environment (access to programs), application controls relate to specific processing (exception reports), and user controls involve manual verification of results.

Accounting Information System (AIS) identifies, collects, processes, and communicates economic information about an entity to a wide variety of users. Such information is organised in a manner that correct decisions can be based on it. 

In Tally, the shortcut key to export reports to various formats like ASCII, HTML, or XML is ALT+E.

Testing the integrity of system output using test data is a classic method for verifying application controls, which ensure that data is processed correctly.

Testing for the serial sequence of source documents is an application control (input control), not a general control. General controls focus on the environment, such as segregation of duties or access logs.

Utility programs are specialized software designed to perform maintenance and supporting operations for the computer system.

Application software consists of programs developed to help the user perform specific tasks, such as word processing or accounting.

System software, such as the operating system, is responsible for controlling the internal functions and hardware of the computer.

Data is the raw input that, when processed and organized, becomes information useful for decision-making.

Language processors, such as compilers and interpreters, are responsible for checking syntax and translating source code into machine language.

Connectivity software facilitates communication between computers and servers, enabling resource sharing across a network.

Output devices, such as monitors or printers, convert processed data from machine-readable form into human-readable form.

The Control Unit (CU) is the component of the CPU that directs and coordinates the operations of all other units in the computer system.

The Arithmetic and Logic Unit (ALU) performs all mathematical calculations and logical comparisons within the CPU.

An output device is necessary for the computer to communicate the results of its processing to the user.

The Central Processing Unit (CPU) is the primary hardware component that executes instructions and processes data.

The memory unit is responsible for storing data and instructions before they are processed and after they are processed.

Data entry is the process of inputting data into the computer system so that it can be processed.

Transaction processing systems typically consist of three main components: input, processing, and output.

In an online transaction processing system, the processing of data occurs immediately upon entry to provide real-time results.

Revalidation is the process of verifying that the output generated by a system is correct and consistent with the input data. It acts as a final check to ensure the validity of the processed information.

The control unit is the component of the CPU that directs the operation of the processor. It manages the instruction cycle by fetching, decoding, and executing instructions, as well as controlling data flow.

A speech synthesizer is a device or software program that converts text or digital data into audible human-like speech. This is a form of audio output.

A video display unit (VDU) consists of: A computer output device that uses a cathode ray tube or other technology to present visual images. One or more input devices, such as a keyboard , a mouse , or both.

Operating system is a software. An integrated set of specialised programmes that are meant to manage the resources of a computer and also facilitate its operation is called operating system. It creates a necessary interface that is an interactive link between the user and the computer hardware. An integrated set of specialised programmes that are meant to manage the resources of a computer and also facilitate its operation is called operating system.

A set(s) of programmes, which is used to work with such hardware is called its software. There are six types of software: operating system, utility progarmmes, application software, language processor, system software, connectivity software.

Hardware of computer consists of physical components, Software is a set(s) of programmes which is used to work with such hardware, a coded set of instructions stored in the form of circuits is called firmware.

Utility programmes is one type of software. These are a set of computer programmes, which are designed to perform certain supporting operations: such as programme to format a disk, duplicate a disk, physically reorganise stored data and programmes.

Connectivity software is a set of programmes which create and control a connection between a computer and a server so that the computer is able to communicate and share the resources of server and other connected computers.

Data are facts and may consist of numbers, text, etc. These are gathered and entered into a computer system. The computer system in turn stores, retrieves, classifies, organises and synthesizes the data to produce information according to pre-determined set of instructions.

Connectivity is being acknowledged as a sixth element of the computer system. The manner in which a particular computer system is connected to others say through telephone lines, microwave transmission, satellite link, etc. is the element of  connectivity.

Central processing unit is the main part of the computer hardware that actually processes data according to instructions it receives. It controls the flow of data by directing the data to enter the system, places the data into its memory, retrieves the same as and when needed and directs the output of data according to a set of stored instructions. 

Central processing unit is the main part of the computer hardware that actually processes data according to instructions it receives. It controls the flow of data by directing the data to enter the system, places the data into its memory, retrieves the same as and when needed and directs the output of data according to a set of stored instructions. It has three main units as: Arithmetic and Logic unit (ALU), Memory unit, Control unit.

The control unit is entrusted with the responsibility of controlling and coordinating the activities of all other units of the computer system. Specifically, it performs the following functions:
a. Read instructions out of memory unit;
b. Decode such instructions;
c. set up the routing of data, through internal circuitry/wiring to the desired place at right time; and
d. Determine the input device from where to get next instructions after the instructions in hand has been executed.

In memory unit data is stored before being actually processed. The data so stored is accessed and processed according to a set of instructions which are also stored in the memory of the computer well before such data is transmitted to the memory from input devices.

After processing the data, the information produced according to a set of instruction need to be made available to user in a human readable and understandable form. A computer system, therefore needs an output device to communicate such information to the user. Essentially, the output device is assigned the task of translating the processed data from machine coded form to a human readable form.  

The output device is assigned task of translating the processed data from machine coded form to a human readable form. The commonly used output devices include: External devices like monitor also called visual display unit (VDU), printer, graphic plotter for producing graphs, technique drawing and charts and internal devices like magnetic storage devices.

The output device is assigned task of translating the processed data from machine coded form to a human readable form. Recently, a new device being perfected is the speech synthesizer, which is capable pf producing verbal output that sounds like human speech.

The control unit is entrusted with the responsibility of controlling and coordinating the activities of all other units of the computer system. Specifically, it performs the following functions:
a. Read instructions out of memory unit;
b. Decode such instructions;
c. set up the routing of data, through internal circuitry/wiring to the desired place at right time; and
d. Determine the input device from where to get next instructions after the instructions in hand has been executed.

The output device is assigned the task of translating the processed data from machine coded form to a human readable form. The commonly used output devices include: external devices like monitor also called as Visual Display Unit (VDU), printer, graphic plotter for producing graphs etc.

Data validation ensures the accuracy and reliability of input data by comparing the same with some predetermined standards or known as data. This validation is performed by error detecting and error correction procedures. 

A transaction could be internal or external. When a department requisitions material supplies from store, an internal transactions is said to have occurred. However, when the purchase department purchases materials from a supplier, an external transaction take place. The scope of financial accounting is confined to external transactions only.

Central processing unit is the main part of the computer hardware that actually processes data according to instructions it receives. It controls the flow of data by directing the data to enter the system, places the data into its memory, retrieves the same as and when needed and directs the output of data according to a set of stored instructions. Hence, CPU is also called as brain of computer.

Data validation ensures the accuracy  and reliability of input data by comparing the same with some predetermined standards or known data. This verification is performed by error detection and error correction procedures.

Transaction Processing Systems (TPS) are among the earliest computerised systems catering to the requirements of large business enterprises. The purpose of typical TPS is to record, process, validate and store transactions that occur in the various functional area of a business for subsequent retrieval and usage.

Real-time processing provides offline outcome in the form of information and reports without time lag between the transaction and its processing. The accounting reports are generated by query language popularly called Structured Query Language (SQL).

Accounting Information System (AIS) identifies, collects, processes, and communicates economic information about an entity to a wide variety of users. Every accounting system is essentially a part of the Accounting Information System (AIS) which in turn is a part of the broader system, viz. the organisation's Management Information System.

The accounting information system (AIS) receives and provides information to the various sub-systems of the institutional/integrated MIS. Accounting information system (AIS) is a collection of resources, designed to transform financial and other data into information.

An operating system is the primary system software that manages computer hardware and software resources, providing common services for computer programs.

The operating system serves as an intermediary between the user and the computer hardware, allowing users to interact with the machine without needing to understand low-level hardware operations.

In many standard information systems frameworks, the six elements are hardware, software, data, procedures, people, and connectivity (or network).

A monitor is the primary output device for displaying visual information, hence it is commonly referred to as a Visual Display Unit (VDU).

Revalidation in the context of ATM transactions ensures that the requested action (dispensing money) has been successfully completed and recorded by the system.

The Arithmetic and Logic Unit (ALU) is the part of the CPU responsible for performing all mathematical calculations and logical operations.

A transaction processing system (TPS) collects, stores, modifies, and retrieves the transactions of an organization. These steps involve input, processing, and output.

Data validation is the process of ensuring that data is clean, correct, and useful. It involves checking input against predefined rules or standards to prevent errors.

Real-time processing systems process data immediately as it arrives, providing near-instantaneous output without the delay associated with batch processing.

The three logical units that make up the central processing unit are the arithmetic and logic unit (ALU), main storage, and the control unit. Main storage retains active programs and data. It is relatively expensive, so secondary storage is used to store programs and data until they are needed in main storage.

Reporting is the phase in an information system where data is organized and presented in a format useful for decision-making.

Transaction Processing Systems were originally developed to handle the high volume of data generated by large business enterprises, which required automated record-keeping.

Storage involves keeping transaction data securely. In the context of an ATM, the record of the withdrawal is stored in the database for future reference and reporting.

The Integrated Test Facility (ITF) involves creating a dummy entity (like a department or branch) within the client's system. Auditors then process test transactions through this dummy entity alongside real transactions to verify system integrity.

Tailored (custom) software allows for granular access control, enabling administrators to restrict user permissions based on their specific roles and departmental needs.

The ability to import and export data is a critical feature for accounting software, as it allows for integration with other systems and data portability.

When selecting accounting software, factors like flexibility, the size of the organization, and security/secrecy are all essential considerations to ensure the software meets business needs.