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Computerized Financial Accounting

Complete financial accounting course or tutorial covers a range of following topics. It is being evaluated that how computers have affected traditional accounting methods and practices.

  • Financial Accounting with Double Entry Bookkeeping
  • Principles of Accounting
  • Basic Book of Accounting – Journal
  • Accounting Ledger
  • Accounting Sub Journals – Cash Cook
  • Subsidiary Accounting Books
  • Accounting Verification by Trial Balance
  • Banking Transactions Bank Reconciliation Statement
  • Depreciation
  • Rectification Of Accounting Errors
  • Balance Sheet and Profit and Loss Account
  • Single Entry Bookkeeping Accounting System
  • Non-Profit Organization Accounting
  • Capital and Revenue
  • Reserves and Provisions

A computer has grown from a scientific curiosity to an indispensable tool of modem society in a concise span of time. There is hardly any scientific/technical or business activity that is not, in one way or the other, affected by modern data processing techniques.

The human mind can handle only a limited number of things at a time. On the other hand, the digital computer can be programmed to compare, measure, calculate and evaluate thousands of readings in a concise period of time.

The computer industry has become the fastest growing industry these days. The sale of mainframe computers is increasing day by day. The computer industry has been further pushed up by introducing minicomputers and microcomputers, which are small, cheap, reliable, and very light. These are being routinely used for process control, production testing, scientific instrument recording, in-store checkout systems, automobile test and evaluating systems, medical monitoring, etc.

Computers are now being used extensively in office administration to perform routine clerical work. Today, most large and medium-sized organizations are almost totally dependent on their computers. Routine uses of computers are given below:

(i) Accounting, Billing, Inventory Control Software with MIS, CRM

Computers are extensively used in accounting, and there is a multitude of computer software for Accounting, MIS, CRM. HiTech Financial Accounting is one such software that has been customized for users in many segments in business and services.

(ii) Payroll and personnel records.

Payroll accounting was the first commercial area to become widely computerized. The calculation of wages or salaries involves several variables related to each employee’s personal details, such as gross payor rate for the job, individual deductions, tax liabilities of the employees, and so on. These facts can be retained in the computers and processed every month to produce payslips for the employees.

(iii) Stock control

The computer helps to exercise the type of stock control needed by the organization. It up to date; the sales and purchases record determine optimum re-order levels for different items and print out the stock lists when desired. The system can be so designed that it triggers orders when stock level reaches order point for various material items, tests that item wthatis slow-moving, or gives averstock items.

(iv) Sale accounts records

Programming can be done for any sales accounting system. The computer will pinpoint defaulting debtors, determine the right limit for credit for each debtor, and maintain the store’s ledger.

(v) Costing and budgetary control

Costing and budgetary control can be effected through the computer; the computer will point out the planned performance variations.

(v) Production control

The computer also helps greatly in production planning and control. It is possible that scheduling of the work may become necessary due to breakdowns etc. A new critical path may have to be worked out. A critical path is the shortest path to be followed in production to achieve production objectives. The computer helps the management lay down this new critical path.

Advantages and disadvantages of a computer

A computer is surely advantageous because of the high speed of operation and greater accuracy it provides, savings affected by better managerial control, savings in labor because it is fully automatic, and finally because of its flexibility in use. However, there is a considerable capital outlay with the difficulty of obtaining experienced analysts and programmers, break down and maintenance troubles, and finally the fear of obsolescence due to computers’ rapid development.

  • Type of other applications to the accounting system
  • WORD PROCESSOR

It is a software package to help in text processing. Words are processed. Processing includes insertion, deletion, changing, moving words, paragraphs, etc. Word processing is the preparation of typescripts, using computing facilities for the storage and manipulation of text. For example, the word processor can merge names and addresses with standard text to give the impression that the latter is personalized, even in the case of the circular letter.

HiTech Financial Accounting has got features so that you can export its reports to Microsoft Word, a word processing, and Mail Merge Program. You can also write letters to various parties and store the details in the program database.

DATABASE

It is a simple collection of information (data) on a particular subject. Database file allows you to manipulate the data in the desired form. So, the database allows us to work on facts and figures to store and manipulate that data in any desired way. For example, from the same basic information, the trial balance is prepared; trading and profit and loss account may be prepared; list of debtors and creditors may be prepared; purchases and sales forecast may be made, and so on. So, efficient database management is needed to provide flexibility in the use of information.
HiTech Financial Accounting uses MS Access and MS SQL Server databases for robust database connectivity.

SPREADSHEET

It is one of the software programs which have increased the utility of computers for accounting purposes. Spreadsheet programs help you to draw vertical as well as horizontal columns on a large-sized paper. Each .column’s length and breadth can be adjusted according to suitability. Even when columns are once drawn subsequently, these can be altered, increased, or decreased. Additional columns can be inserted; existing columns can be deleted. It is handy for business people and professionals. It enables us to study multidimensional data on one sheet and helps in arriving at logical decisions. For example, if the profit and loss account has been prepared for the year 1989 and you want a comparison with 1987 figures and 1990 forecast, then the spreadsheet shall enable you to provide two additional columns on each side for inserting 1987 actual figures and 1990 forecast estimates.

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