Question

Advantages and limitations of computerised accounting systems​

Answer 1

Answer:

Accounting software programs have become common, there are both advantages and disadvantages to relying on a computer for all accounting.

Advantage: Simplicity. ...

Advantage: Reliability. ...

Advantage: Cost-Effectiveness. ...

Advantage: Ability to Collaborate. ...

Disadvantage: Potential Fraud. ...

Disadvantage: Technical Issue

Explanation:

Answer 2

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Advantages of Computerised Accounting System:

(i) Faster Processing:

• Computers require far less time than human beings in performing a particular task.

• Therefore, accounting data is processed faster using a computerized accounting system.

(ii) Accurate Information:

• There is less space for error because only one account entry is needed for each transaction unlike repeated posting of the same accounting data in manual system.

(iii) Reliability:

• Computer systems are immune to boredom, tiredness or fatigue.

• Therefore, these can perform repetitive functions effectively and are highly reliable as compared to human beings.

(iv) Easy Availability of Information:

• The data can be made available to different users at the same time.

• This is called data sharing.

(v) Up-to-date Information:

• Account balances will always be up to date since the records are automatically updated as and when accounting data is entered or stored.

(vi) Efficiency:

• The computer based accounting system ensures better use of time and resources.

(vii) Storage and Retrieval:

• Computer based systems require a fractional amount of physical space as compared to the books of accounts in the form of journals, ledgers and accounting registers.

(viii) Works as a Motivator:

• Employees using computer systems feel more valued as they are trained and specialized for the job.

(ix) Automated Document Production:

• Accounting reports like cash book, trial balance and financial statements are generated automatically and are easily accessible just by a click of mouse.

(x) MIS Reports:

• It is easier to monitor and control the business using the real time management information reports generated by the computerized information systems.

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