Course material prepared by T.Muthukumar, M.Com., M.Phil, (Ph.D) Dept of Commerce, Christhuraj College,Trichy-12 E.Mail- firstname.lastname@example.org
UNIT : V COMPUTER ACCOUNTING AND ALGORITHM INTRODUCTION: A computer is an electronic device that receives data or a set of instructions, processes them and then gives the information. These data and instructions are called input, whereas information is termed as output. A computer makes our work easy. It is a machine having memory. It works with instructions. We can store words and numbers in its memory. It works fast and does not get tired. A computer never forgets and thousands of facts can be stored in its memory. It never makes careless mistakes. Role of computer Accounting: Computer is used in every aspect of accounting. However, the main aspects are: • Recording of transactions • Stores accounting • Payroll accounting • Accounting for Debtors. A.Spreadsheets Electronic Spreadsheets allow you to do anything that you would normally do with a calculator, pencil and columnar scratch pad. A typical integrated double entry accounting spreadsheet system will contain some of the following components: general ledger, inventory levels, order entry, payroll, time, and billingetc... B.GeneralLedger Electronic General Ledgers are labor saving device for the preparation of financial statements and for establishing multiple income and cost entries. It takes charge of secondary postings. C.InventoryControl Electronic Inventory Control module has multiple functions, which includes tracking inventory for both costing and tax purposes, aid managers in controlling purchasing (and the overall level of expenditure) and minimizing the investment in inventory (and subsequent loss of cash flow). It is integrated with the general ledger so it can automatically set aside the correct amount for processing further. D.AccountsReceivable Electronic Accounts receivable can get your bills out the same day you perform a service. Electronic accounts receivable module can prepares invoices for... Features of Computerized Accounting 2. Salient Features of Computerized accounting 2.1. Fast, Powerful, Simple and Integrated Computerized accounting is designed to automate and integrate all the business operations, such as sales, finance, purchase, inventory and manufacturing. With Computerized accounting, accurate, up-to-date business information is literally at the fingertips. The Computerized accounting combine with enhanced MIS, Multi-lingual and Data organization capabilities to help the company simplify all the business processes easily and cost-effectively. 2.2. Complete Visibility Computerized accountings giving the company sufficient time to plan, increase the customer base, and
enhance customer satisfaction. With Computerized accounting the company will have greater visibility into the day-to-day business operations and access to vital information. 2.3. Enhanced User Experience Computerized accounting allows the company to enter data in a variety of ways which makes work a pleasure. Adapting to the specific business needs is possible. 2.4. Accuracy, Speed Computerized accounting has User-definable templates which provides fast, accurate data entry of the transactions; thereafter all documents and reports can be generated automatically, at the press of a button. 2.5. Scalability Computerized accounting adapts to the current and future needs of the business, irrespective of its size or style. 2.6. Power Computerized accounting has the ability to handle huge volumes of transactions without compromising on speed or efficiency. 2.7. For Improved Business Performance computerized accounting is a highly integrated application that transforms the business processes with its performance enhancing features which encompass accounting, inventory, reporting and statutory processes. This helps the company access information faster, and takes quicker decisions. Computerized accounting also guarantees real-time optimization of operations and enhanced communication. 2.7. Quick Decision Making Generates real-time, comprehensive MIS reports and ensures access to complete and critical information, instantly. 2.8. Complete Reliability Computerized accounting makes sure that the critical financial information is accurate, controlled and safe from data corruption. 3. Advantages of Computerized accounting Advantages of computerized accounting Accounting is a necessary function for any business. All businesses must keep a record of their income and expenses and the records should be as detailed as possible. For some, the idea of spreadsheets, general journal books and ledger sheets is frightening. For these people, computerized accounting could be a welcome relief. The two biggest advantages of a computerized accounting system are speed and accuracy. When using a manual accounting system, each step in the accounting cycle must be performed by hand. For example, if a business pays their electric bill, a check has to be written, an entry must be recorded into the check register, and the transaction has to be posted to the respective ledgers: in this case, a debit to the electric companyâ€™s ledger account and a credit to cash. This process would need to be repeated for every
transaction a business makes. If the business is small and makes only a few transactions a month, it would not be much of a problem. But for other businesses, there could be thousands of transactions, and it could take both a large amount of time and a substantial staff to keep up. With a computerized accounting system, the steps described above are completed with one entry. The journal entries for cash and the electric company are automatically posted to their respective ledgers. What could take several minutes manually takes only seconds with a computerized accounting system. Also, because only one entry needs to be made with a computerized system, the likelihood of an incorrect entry is greatly reduced. Another advantage is the ease of producing end of period reports. With a manual system, each general ledger entry would have to be posted to the financial statements by hand. With a computerized accounting system, each computerized transaction is automatically posted to both the general journal and the respective ledgers, which makes producing balance sheets, trial balances, and end of period financial reports as simple as selecting the desired report from the menu. Other advantages to using computerized accounting are: • Instant access to accounting information. Because each entered transaction is automatically posted to its respective account, all account information is always up-to-date. • Easy document production. Purchase orders, debit memos, sales receipts, sales invoices, inventory lists and others can be printed in moments. • Staff motivation. Accounting and bookkeeping departments should run more smoothly and be more efficient with computerized accounting software. There will be less time spent on compiling reports. • Legibility. Computerized accounting software eliminates the need to decipher poor or odd handwriting, eliminating much of the possibility of error due to misreading a hand-written line item. • Ability for taxes to be computed automatically. This makes paying quarterly or annual taxes easier since the computerized system will keep a running total of all taxes owed. • Faster and efficient in processing of information; • Automatic generation of accounting documents like invoices, cheques and statement of account; • With the larger reductions in the cost of hardware and software and availability of user-friendly accounting software package, it is relatively cheaper like maintaining a manual accounting system; • More timely information can be produced; • No more manual processing of the data- all automatically been posted to the various ledgers/accounts and • Many types of useful reports can be generated for management to make decisions • * Automation of tedious clerical jobs * Speed and accuracy * Low cost of packages * Automatic generation of standard reports * Redundant data storage permits efficient generations of some reports * Increase revenue while lowering operating costs and enhancing competitive advantage of the company. • •
Disadvantages of computerized accounting Power failure, computer viruses and hackers are the inherent problems of using computerized systems; Once data been input into the system, automatically the output are obtained hence the data being input needs to be validated for accuracy and completeness, we should not forget concept of GIGO (Garbage In(Input) Garbage out ( Output) and
Accounting system not properly set up to meet the requirement of the business due to badly programmed or inappropriate software or hardware or personnel problems can caused more havoc and Danger of computer fraud if proper level of control and security whether internal and external are not properly been instituted.
Features of algorithms An algorithm is determined; if it delivers on every execution with the same starting conditions and inputs the same results. Determinism An algorithm is deterministic, if at any stage of the algorithm execution, the next action step is clearly defined. Examples of deterministic algorithms are Bubble and the Euclidean algorithm. The rule here is that any deterministic algorithm determines, while not every determinant algorithm is deterministic. Sun quick-sorts with random choices of the pivot element which is an example of a determined but not deterministic algorithm, since its results for the same input and unambiguous order is always the same. In theoretical computer science, there is next to the determinism non-determinism, (no real machine can be directly implemented with quantum computers). Finiteness The finiteness restricts the definition of the algorithm to a finite long-term operation. Static finiteness The description of the algorithm has a finite length, the source must therefore exist a limited number of lines. Dynamic finiteness An algorithm may need at any stage of its execution only limited amounts of memory.
Scheduled An algorithm stops after finitely many steps to terminate control. This is true for every possible input. If an algorithm does not terminate (and therefore has no result), the result would be a so-called loop. For this property there are exceptions: control systems; operating systems and many other programs that are based on interaction with the user. As long as the user enters any command to stop running these programs they are intended to continue indefinitely. Donald Knuth suggests in this context to refer to non-terminating algorithms as computational methods (Computational Methods). In addition, the scheduling of an algorithm is not (the halting problem) decidable. That is, determining the problem. Effectiveness The effect of each statement of an algorithm must be clearly defined. Examples of properties of algorithms Simple basic operation: “Open the bottle of wine” this is the knowledge required for the Open. Sequential algorithm: “beer to wine, let’s his” two operations give a predetermined sequence, and this should not be changed. Concurrent algorithm, “liquor and beer,” The order is not predetermined and can also take place simultaneously. Initiate parallel execution: “With sparkling wine,” This can only simultaneously (in parallel) run and not consecutive (sequential). Nondeterministic algorithm: “Beer or water,” The result is different depending on what one chooses. Analysis algorithms The exploration and analysis of algorithms is a key task of computer science, and is usually carried out in theory (without concrete implementation in a programming language). It thus resembles the approach in other mathematical areas where the analysis is more focused on the underlying concepts rather than concrete implementations. Algorithms are brought to the analysis in a highly formalized form and analyzed with the tools of formal semantics. The analysis is divided into various sub-regions. For example, the behavior of algorithms will
be dealt with on resource requirements, such as computation and storage requirements in complexity theory and the results are expressed as asymptotic running times. The resource needs will be identified here, depending on the length of the input, which means that the specified complexity depends on how large the numbers are, looking for the greatest common divisor, or how many elements must be sorted, etc. The behavior regarding the scheduling, i.e. whether the algorithm can be stopped at all, can be successfully dealt with using the predictability theory Reference: http://www.ineedcontent.info/2010/10/features-of-algorithms/
www.computerizedaccountingsystem.net/ www.understand-accounting.net/computerizedaccounting.html www.svtuition.org/2008/.../5-advantages-of-computer-accounting www.nos.org/srsec320newE/320EL12.pdf