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Importance of IT in Accounting

Importance of IT in Accounting. Introduction. Expansion of Business – Increases the number of transactions. Manual Accounting – Unmanageable. Introduction of Computers in Business & Database Technology – gradually replaced manual accounting with computerized accounting.

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Importance of IT in Accounting

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  1. Importance of IT in Accounting

  2. Introduction Expansion of Business – Increases the number of transactions. Manual Accounting – Unmanageable. Introduction of Computers in Business & Database Technology – gradually replaced manual accounting with computerized accounting.

  3. Computer and its Characteristics Computer is a device that accepts data, stores data, processes data as desired, retrieves the stored data as and when required and prints the result in desired format.

  4. Computer and its Characteristics Computer is a device that accepts data, stores data, processes data as desired, retrieves the stored data as and when required and prints the result in desired format. • Speed • Storage • Accuracy • Diligence • Versatility • Communication • Processing Power

  5. Computerized Accounting The computerized accounting uses the concept of databases. For this purpose an accounting software is used to implement a computerized accounting system. It does away the necessity to create and maintain journals, ledgers, etc., which are essential part of manual accounting. Tally, Cash Manager, Best Books, etc.

  6. Components of Computerized Accounting Software Preparation of Accounting Documents: Computer helps in preparing accounting documents like Cash Memo, Bills and invoices etc., and preparing accounting vouchers. Recording of Transactions: Business transactions can be recorded with the help of computer softwares.

  7. Components of Computerized Accounting Software Preparation of Trial Balance and Financial Statements: After recording of transaction, the data is transferred into Ledger account automatically by the computer. Trial Balance is prepared by the computer to check accuracy of the records. With the help of trial balance the computer can be programmed to prepare Trading, Profit and Loss account and Balance Sheet.

  8. Need and Requirements of Computerized Accounting Numerous Transactions. Instant Reporting. Reduction in Paper work. Flexible Reporting. Accounting Queries. On-line Facility. Scalability. Accuracy. Security.

  9. Limitations of Computerized Accounting Cost of Installation. Cost Training. Self Decision Making. Maintenance. Dangers for Health.

  10. Internet and Resources for Business

  11. Thank You

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