Question

Comparative study of conventional and modern system of accounting

Answer 1

Conventional system of accounting – This method made use of various books such as a sales book, a cash book and a purchase book to record a transaction. These were called the books of prime entry and contained the details of accounts pertaining to liabilities, assets, expenses and income. This is also called the traditional or manual method of accounting.

Modern system of accounting – This method makes use of an accounting software to enter the data faster, as well as collate and print documents like invoices, payroll, purchase orders and others more accurately and quickly. It helps in enhancing the inventory control, payment collection, and cash flow processes. This is also called the computerized method of accounting.