Concept of Computerised Accounting System
Computerised Accounting System refers to a system wherein the accounts of the enterprise are maintained on a computer. An accounting system has two aspects; first, it has to work under a set of well-defined accounting concepts and principles and, secondly, it has to maintain records and generate reports as defined by the user. These aspects can be fulfilled by processing the transactions and events in accordance with the accounting principles and adopting the software which is capable of generating the user-defined reports.
Small firms or organizations can handle their accounting with the use of personal computer with basic accounting software because the volume of their transactions is not large. But a large enterprise or organization has a large number of transactions, involving a number of parties and account heads. Accounting of such enterprises or organizations, therefore, needs the support of database. Database refers to the collection of all information about the object (customer or supplier or asset or, in fact, any object) at one place, from where it is retrieved at the time of recording a transaction or generating a report. The data collected is processed to eliminate duplicate and redundant data. The process is known as normalization of data.
The data is controlled by using a Database Management System (DBMS) which is defined and managed by a set of computer programs (or software) and provides access to the stored data by the application programs. The accounting database is well organized with an active interface that uses the accounting application programs and the reporting system. Every computerized accounting system has two basic requirements i.e., accounting framework and operating procedure.
The accounting process deals with the management of accounting data, under which it has to manage, classify and manipulate the accounting data according to the conditions and scenario. It is managed, classified and manipulated so that the desired reports can be drawn, based on which decisions can be made. Analyzing the accounting data is not only necessary but can be said to be its backbone. A computer is a machine that is meant for analyzing the data for manipulating the available accounting data. The data is analysed or manipulated with the help of a computer and utility or application software.