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Question-1

What do you understand by Data processing cycle?

Solution:
Data processing involves collection, sorting, relating, interpreting and processing in such a manner that raw data provides meaningful information.

Question-2

What does the term ‘Reality mean?

Solution:
Reality refers to some aspect of the real world situation, for which database is to be designed.

Question-3

What do Binary Relationship and Ternary Relationship mean?

Solution:
A relationship is a binary relationship if the number of entity sets involved in the relationship is two.

 

Computing is an example of a ternary relationship which represents the relationship involving a student using a particular computing system to do the computations for a given course.

Question-4

What are three advantages of DBMS?

Solution:
A. Most types of database minimize data redundancy, which makes updating easier and less error – prone and saves processing effort and storage space.

B. Program/file independence (P/FI), whereby programs do not contain direct references to data descriptions, permits reduced programming effort because the descriptions do not have to be programmed.

C. P/FI speeds up program development because of the reduced programming effort needed.

Question-5

What are the three components of DBMS?

Solution:
A) Data Dictionary: This is the centralized depository of information, in a computerized form, about the data in the database. The data dictionary contains the scheme of the database, ie, the name of each item in the database and a description and definition of its attributes. The data dictionary includes information about the data. With most database systems, the DBMS receives a request from a program for data and then accesses the database dictionary to determine whether the program has the right to receive the data it has asked for and to ascertain the location of the data in the database.

B) On-line Access Terminals: These may be adjacent to the computer or thousands of miles away. These may be dumb terminals, smart terminals, or micro – computers.

C) Output System or Report Generation: This provides routine reports, documents and special reports.

Question-6

What are the constraints of Database Schemas? Write about any two constraints?

Solution:
a) Domain: The value of each attribute of a relation must be an indivisible value and must be drawn out of possible values associated with its domain. The value of an attribute, therefore, must conform to the data type associated with the domain.

b) Key constraints: A key is part of a tuple (one or more attributes) that uniquely distinguishes it from other tuples in a given relation.

Question-7

What do you understand by SQL?

Solution:
SQL (Standard Query Language) is the most popular query language for relational DBMS, and most of the commercial relational database management systems use SQL or a variant of SQL.

Question-8

How can database be made secure?

Solution:
Identification and proper authentication of valid users are two most important aspects of any security enforcing mechanism.

Question-9

Write short notes on the security of a database

Solution:
As the importance of database systems increases and their usage grows, it becomes necessary to ensure that the information entrusted to these systems is protected. Institutions, such as banks, hospitals, governments, corporate organizations and even individuals who deal with sensitive information, cannot be expected to consign their secrets to a computer system if they are not absolutely certain of confidentiality.

 

The security of a database can be thought of as a barrier which prevents unauthorized access of data. Simultaneously, we must also guarantee access to all relevant data to legitimate users. Thus, identification and proper authentication of valid users are two most important aspects of any security enforcing mechanism. When the number of users is small, the security can be enforced by physical recognition of the users by a guard, together with appropriate protection of storage devices against theft or destruction. Even when the number of users is large, physical protection of stored data still remains an important factor. In a multi-user environment, instead of physical recognition of users the usage of passwords, acts as guards. The database schema is yet another object of protection. Since schema declaration defines access rights to different path objects related to the schema as well as privacy locks (or passwords) needed for such access, anyone having access to schema declaration can eventually attain access rights to different data items also. Hence, schema declaration as an object should have the highest level of security and normally would be accessible only to the owner of the database. Some database systems maintain schema declaration in a separate file and use the file to find the access right of users.

Question-10

Explain the term" Interacting with database".

Solution:
SQL (Standard Query Language) is the most popular query language for relational DBMS, and most of the commercial relational database management systems use SQL or a variant of SQL. The original version of SQL was called SEQUEL. SEQUEL is a relational query language based on neither relational algebra nor relational calculus. It is a non – procedural language where the concept of universal quantifiers is not used. A block – structured format of English key words is used in this query language. It is intended for interactive use by people who are not specialists in computers.

 

Many versions of SEQUEL are available today for commercial applications. Almost all of these versions include facilities for query formulation, insertion, deletion and update operations, as well as the ability to create new relations and to control the set of indexes maintained on the database.

Question-11

Explain the functions of a database system.

Solution:
We are aware that accounting is based evidences and such evidences are documented with vouchers. All transactions are recorded in the books of account on the basis of evidences. Let us take a few transactions and discuss how vouchers are useful in accounting.

 

 

Exhibit 1.1: A Voucher for a transaction involving two accounts ie., a debit and a credit.

 

INAM BUSINESS SERVICES
Transaction Voucher

Voucher No. 01                                 Date: October 10, 2007

Debit Account           : 2200016 Bank Account (Current)

Credit Account          : 1100001 Capital Account

Amount                   : Rs. 1, 00,000

 

Narration                : Transferred amount from Savings Account to the
                               firm’s

Current Account with Axis Bank Ltd. Lajpat Nagar
Branch (A/c No. 126010100008816) by the Proprietor,
Vikas, to commence the business.

Approved by:                                                     Prepared by: Balan

 

The above transaction can be recorded through other types of transaction vouchers known as ‘Credit Voucher’ and ‘Debit Voucher’. Credit Voucher can record more than one credit against one debit and Debit Voucher can record more than one debit against one credit. Let us review one sample voucher each of a credit voucher and a debit voucher.

 

Exhibit 1.2: A Voucher for more than one credit against one debit.

INAM BUSINESS SERVICES
Credit Voucher

Voucher No. 01                                                     Date: October 10, 2007

Debit Account : 2200016

Sl No Credit Account Name of Account Amount (Rs.) Narration
1 1100001 Capital Account 1,00,000 Capital for starting of Business
2 1100005 Loan Account 50,000 Loan Received
    Total Amount 1,50,000  

 

Approved by:                                                                Prepared by: Balan

Exhibit 1.3: A Voucher for more than one debit against one credit.

 

INAM BUSINESS SERVICES
Debit Voucher

Voucher No. 01                                                      Date: October 10, 2007

Credit Account : 2200016Bank Account

Sl No Code Name of Account Amount (Rs.) Narration
1 3300001 Purchases Account 25,000 Purchases from M/s R.K. & Co.
2 2200015 Cash Account 10,000 Cash withdrawn for Office use
    Total Amount 35,000  

 

Approved by:                                                                                Prepared by: Balan

 

 

The accounting process, whether manual or computerized, involves identifying financial transactions and recording them in the books of accounts. It also involves storing and, thereafter, retrieving the transaction data when required. The retrieval of transaction data, under the manual process, is a bit difficult, as a number of data may have to be scrutinized before the sought data is retrieved. But, if a suitable mechanism to store the data is designed, data can be retrieved without much difficulty. The computerized accounting system can perform functions of identifying, storing and retrieving the data when required. This mechanism involves creating a database consisting of inter-related data tables that are structured to ensure data consistency and integrity.

Question-12

Explain the basic concepts of database system of accounting.

Solution:
Data Processing Cycle
Before we discuss the database, it shall be better if we discuss the data processing cycle in the context of accounting. Data processing involves collection, sorting, relating, interpreting and processing in such a manner that raw data provides meaningful information. The quality of information is directly related to the data used. Therefore, it is important that quality, with respect to the steps involved in data processing cycle, which are data capturing, data input, processing and generating information available to the user, is ensured. It requires a series of steps that are discussed below:

 

 

1. Source Documents: As a first step, accounting data is captured from the evidence of transactions to prepare a voucher. The voucher has the relevant details of the transaction and expresses, and also documents, the transaction. Sample vouchers have been given in the exhibit. For example, exhibit 1.1 expresses and also documents that the proprietor has contributed Rs. 1,00,000 on October 10, 2006 towards capital of the business. The vouchers are designed in a manner that accounting data is recorded in a systematic manner.

 

2. Data input: The accounting data in the vouchers is entered in the storage device of the computer through a pre – designed Data Entry Form in the accounting software. The form is very similar to the physical form of the voucher. The form appears on the monitor screen and data is entered in the designated cells.

 

Data is stored in a data storage structure provided for the purpose in the software. A blank data record will appear as follows:

 

Code

Name of the Account

Type

     

 

The data which is fed into the computer and stored in the designated storage structure will appear as follows:

 

Code

Name of the Account

Type

2200016

Axis Bank Ltd., Lajput Nagar, New Delhi

2

1100001

Capital Account

1

1100005

Loan Account

1

3300001

Purchases Account

3

2200015

Cash Account

2

3300015

Printing and Stationery Account

3

4100001

Sales

4

In the given table, ‘Type’ indicates the category to which the head of account belongs. Type 1 indicates liabilities, Type 2 indicates assets, Type 3 indicates expenses and Type 4 indicates incomes. It is indicated by the first numeric code of the code of the account.

 

3. Manipulation of Data: Manipulation of data means analyzing the data for the purposes of generating reports. For a particular report, only a part of the total data may be required, which is retrieved from the database and presented. The stored data is manipulated for transformation into final reports. The accounting data is stored in the designated tables and manipulated. The reports, in the context of accounting, could be trial balance, ledgers or financial statements, in pre – designed formats.

 

4. Output of Data: Output of data refers to report generation. In the context of accounting, such reports are trial balance, ledger, financial statements, age of the debtors, purchases made by each of the debtor during a particular period, etc. These reports are generated in the pre – designed format through data manipulation.

Question-13

Explain the various Models of Database for Accounting.

Solution:

An organization is established to undertake one or several operations or projects. Typically, it is an environment with a single administrative control. Examples of organizations are banks, hospitals, manufacturers, etc. All these organizations have different functions, but still there are some basic or common functions performed by all the organizations. One common function for all the organizations is accounting.

In accounting, typically, an organization collects processes and stores the financial and material resources or data. The data of a particular object is collected and stored at one place in a systematic manner. The data thus collected is processed to eliminate duplicate records. The data collected and stored will have entire data of the object, but only a part of the whole data is relevant to a particular user department. The collected and stored data is the database out of which a relevant part of the data can be retrieved by the user department to the extent it is permitted by the data administrator. It is the function of the administrator to disseminate information to the user as permitted. The accounting functions performed by an organization depend on its nature and purpose and may include payroll, accounts receivable and payable, sales reports and forecasts, design and manufacturing. An organization can perform the above functions efficiently if it has built adequate database of relevant information. We may say that, without the proper and relevant database, an organization may not perform efficiently.

The database is used for storing information that is useful to an organization. To represent this information, some means of modeling is used. The components used in modeling are limited to the objects of interest to the organization and the relationships among these objects. For example, one category of objects of concern to any organization is its personnel and employees.

The process of designing database for accounting is described through a flow chart. Each category of objects has certain characteristics or properties, called attributes. Relationships have certain properties as well, which are represented as the attributes of the relationship.

Let us discuss each attribute of the flow chart:

1. Reality: Reality refers to some aspect of the real world situation, for which database is to be designed. For example, in the case of a doctor, database is created of the patients with respect to their ailments, treatment given and so on. Reality is a real world situation. In the context of accounting, accounting itself is a reality that is to be expressed. For example, a transaction is documented using a voucher a voucher that is serially numbered and dated, and bears account name along with its code for the debit and credit entry. Account codes are given to each account head according to the grouping of the account head, ie., asset, liability, expense and income. Evidences of transactions, ie., bills receipts, contracts, etc., form the basis of entry. Now this is an accounting reality.

2. ER Design: ER Design refers to the formal blueprint showing use of Entity Relationship (ER) concepts to represent the description of reality.

3. Relational Data Model: Relational Data Model refers to data model through which ER design is transformed into inter – related data tables along with the restrictions in the form of rules that are specified to ensure the consistency and integrity of the stored data.

4. Normalisation: Normalisation refers to the process through which database design is refined so that the duplicate or redundant data is eliminated or reduced.

5. Refinement: As an outcome of the completion of normalization process discussed above, the database design is arrived at. The database design thus reached is the final database design as it does not require any further refinement.

Entity-Relationship (ER) Model: The entity-relationship (ER) data model is developed out of the exercise of using commercially available DBMS to model application database. Earlier, commercial systems were based on the hierarchical and network approach. The entity – relationship model is a generalization of these models. It allows the representation of explicit constraints as well as relationships. This model of database consists of entities, attributes, identifiers and relationships which are used to express a reality for which database is to be designed. The database structure, employing the ER Model, is usually shown pictorially by using entity – relationship (ER) diagrams. The entities and the relationships between them are shown by using the ER symbols to represent different types of entities, attributes, identifiers and relationships. The symbols, which are used for the purpose, are standardized and are as follows: An entity is shown as a rectangle.
 
A weak entity is shown as a double lined rectangle.
 
A diamond represents the relationship among a number of entities, which are connected to the diamond by lines.
 
Identified relationship is shown as a double lined diamond.
 
The attributes shown as ovals are connected to the entities or relationships by lines.
 
Key attribute is shown as names enclosed in ovals and attached to their entity type by straight lines.
 
Multi-valued attributes are shown as double ovals.
 
Derived attributes are shown as dashed line ovals.
 
Diamonds, ovals and rectangles are labeled. The type of relationship existing between the entities is represented by giving the cardinality of the relationship on the line joining the relationship to the entity.

Question-14

Explain the types of attributes.

Solution:
Types of Attributes:

1. Composite Vs. Simple (Atomic) Attributes: Composite attributes can be divided into smaller sub – parts to represent some more basic attributes with an independent meaning.

 

Example: Attribute mode is the composite attribute which represents mode of payment/receipt.

 

Example: Cash is a simple attribute

 

2. Single-Valued Vs. Multi Valued Attributes: An attribute with a single-value of an entity is a single-valued attribute.

 

Example: Vouno is a single-valued attribute, which represents Voucher No. of the cash transaction.

 

An attribute with multi value is a multi-valued attributes.

 

Details attribute contains the details of transactions, and so it is a multi-valued attributes.

3. Stored Vs. Derived Attributes: Two or more attributes may be related in such a way that one or more becomes the basic attribute i.e., stored attribute, and the other becomes dependent on the basic attribute, i.e., derived attribute.

 

Balance is an attribute that has value which is derived from two independent attributes i.e., stored attributes, which are amount and transaction. So, balance is a derived attribute.

 

4. Null-Valued Attributes: Absence of a data item is an attribute is represented by a special value called null value. For example, transaction attribute can contain a value for payments and for receipts or it can have null value.

 

There are three situations which may require the use of null values. They are:

A particular attribute does not apply to an entity

Value of an attribute is unknown, although it exists

Value of an attribute is unknown because it does not exist.

 

5. Complex Attributes: The composite and null-valued attributes may be nested (grouped) to constitute complex ones:

 

The symbols used are Parenthesis – (), [], {}

 

Example:

 

 

Bank is a complex attribute with further multi-valued and composite attributes of cheque No., date and bank drawn, which can be represented within parenthesis.

 

6. Key Attributes: An entity usually has an attribute whose values are distinct for each individual entity in the collection of data items. The attribute is called the key attribute of an entity.

 

The key attribute helps us to maintain the uniqueness in the set of data values in an entity. Entities may have more than one key attribute.

 

Example: Voucher No. will be the unique data item that will enable us to identify the data of each set separately. So, it becomes the key attribute for this entity.

 

7. Value Sets of Attributes (Domain): Each simple value is associated with a value set which is called domain of values. The domain specifies the set of possible values that may be assigned to a particular attribute.

Question-15

What is DBMS and what are their advantages and disadvantages. Explain their components as well.

Solution:
Database Management System (DBMS): DBMS is a collection of programs that help us to create and maintain a database. It is a general purpose software system that facilitates the processes of defining, constructing and manipulating databases for various applications. The data stored need not include every conceivable piece of fact about the enterprise. Usually, only the facts relevant to an enterprise are captured and organized. The purpose for the same is to provide information to support decision making at various levels, such as operational, management, etc. such a constrained area of focus is also often referred to as the domain or domain of attention/concentration. In another way, a database is an informational model of some domain.

 

Advantages of Database Management System

1. A database pools the data for a series of applications so that the data is readily available from one central source to the persons authorized to access the information. This tends to promote the sharing of information so that the same basic information is used by more managers.

2. Most types of database minimize data redundancy, which makes updating easier and less error – prone and saves processing effort and storage space.

3. Program/file independence (P/FI), whereby programs do not contain direct references to data descriptions, permits reduced programming effort because the descriptions do not have to be programmed.

4. P/FI speeds up program development because of the reduced programming effort needed.

5. Preparation of special purpose reports, often a critical managerial need, can be accelerated several – fold.

6. Fewer programs may be needed, since each can be access an entire database.

7. Because of P/FI application programmes often do not need to be changed when record formats are changed. (The change is made only once in the data dictionary).

8. A database often lets a file system evolve, rather than become obsolete, because additional data paths can be defined as needed.

9. Less (or no) intermediate processing is required because the file integrates a database where cross – functional reports must be prepared. This decreases report preparation time and delay, reduces manual labor, and eliminate errors that occur during intermediate processing.

10. It provides greater consistency of data in a database because most data elements occur in one place only and reports using those data elements are based on that one source.

11. One transaction input can often update multiple database records, economizing on input effort.

12. If the database has a query language (most do), managers can quickly develop their own relatively simple programs for queries or managerial analysis, without being dependent on data processing for this service.

 

Disadvantages of Database Management system

1. Insufficient database expertise is perhaps the most serious disadvantage of DBMS. Database technology is complex, and few organizations have personnel with the necessary expertise to implement and manage database property.

2. Database is usually responsible for a significant increase in the data processing of an organization and, resultantly, a commensurate increase in the cost of data processing.

3. Increased hardware and software needs lead to a substantial increase in hardware and software cost. Direct access memory capability, greater communications capability (including communications software packages), and additional processing capacity are required with most database systems.

4. Data security and integrity problems arise with the DBMS as many users have access rights to the database. The associative capabilities of a database make all data in the database potentially available for every year.

5. Probably all but the first disadvantage will persist indefinitely, although it may be that, as technology becomes less costly, additional hardware and software costs will be less than the cost of utilizing more labor with conventional systems.

 

Components of the Database Management System.
The database environment has the following components:

 

1. Database Files: These files have data elements stored in the database file organization format. The database is created to balance the data management objectives of speed, multiple access paths, minimum storage, program- data independence, and preservation of data integrity. Basically, the DBMS tries to store data in a manner that facilitates rapid access while economizing on stage. The user is only concerned with the logical view of the data, that is, the relationships among data.

 

For instance, a bank manager should know that the database contains the names, address and phone numbers of the customers as well as their recent savings, cheques, and loans histories. How exactly these data elements physically stored are not particularly important to the manager. Physical data descriptions are the concern of the Management Information System (MIS) department, which must select a database system that meets the needs of the users at a reasonable cost.

2. Database Management System: DBMS is a set of complex systems software programs that manages the database files. The DBMS accesses the files, updates the records, and retrieves data as requested. The DBMS is also responsible for adding and deleting records, recognizing the database by reassigning storage space to make processing more efficient, and performing other housekeeping chores. The DBMS has the responsibility for data security, which is vital in database environment, since database is accessed by many users. The DBMS grants or withholds clearance to the application programs and terminal users for accessing the database files.

3. Users: Users consist of both the traditional users like the accounting personnel, and application programmers, who are not traditionally considered to be users. The users interact with the database management system indirectly via application programes or directly via simple query language. This language enables the user to retrieve data in logical formats on an ad hoc basis. The user’s interaction with the database management system includes the definition of the logical relationship in the database, the maintenance of data (including input), the changing and deletion of data, and the manipulation of data.

4. Host Language Interface System: This is a part of the DBMS that communicates with the application programs. The host language interface interprets instructions in high – level language application programs, such as COBOL and BASIC programs, that request data from the files so that the required data can be retrieved. During this process, the Operating System of the computer interacts with the DBMS. The application programs do not contain information about the file. Thus, the program/file is independent of a database system, that is, there is nothing in the program that restricts its use to a particular data file.

5. Application Programs: These programs perform almost the same functions that they do in connectional systems, but are independent of the data files and use standard data definitions. This independence and standardization make special purpose program development easier and faster. Application programs using the host language interface are usually developed by professional programmers.

6. Natural Language Interface System: This query language permits on – line update and inquiry by users who are relatively unsophisticated about computer systems. This language is often termed English – like because instructions of this language are usually in the form of a simple command in English, rather than consisting of symbols and equations. Most of the commands of query language are pre – programmed and are activated when the user keys in combinations of English words to accomplish an inquiry task. Query languages also permit on-line programming of simple routines by managers who wish to investigate the status of projects which are in process by writing short programs rather than use only the existing query language commands. The natural language interface system may also facilitate managers or their assistants to develop elementary special reports.

7. Data Dictionary: This is the centralized depository of information, in a computerized form, about the data in the database. The data dictionary contains the scheme of the database, ie, the name of each item in the database and a description and definition of its attributes. The data dictionary includes information about the data. With most database systems, the DBMS receives a request from a program for data and then accesses the database dictionary to determine whether the program has the right to receive the data it has asked for and to ascertain the location of the data in the database.

8. On-line Access Terminals: These may be adjacent to the computer or thousands of miles away. These may be dumb terminals, smart terminals, or micro – computers.

9. Output System or Report Generation: This provides routine reports, documents and special reports.





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