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Question-1

State the different elements of a computer system.

Solution:
A Computer system ideally consists of three major components:

1. Hardware

2. Software

3. Humanware

 

Question-2

List the distinctive advantages of a computer system over a manual system.

Solution:
1. Speed: It can perform jobs at a much higher speed than human beings. Normally, human beings take into account a second or a minute as the unit of time. But computers have such a fast operating capability that the relevant unit of time is fraction of a second.

2. Accuracy: It performs jobs with a high degree of accuracy. The computer cannot make mistakes if proper instructions are given.

3. Reliability: computers are immune to tiredness, boredom or fatigue. Therefore, they are more reliable than human beings.

4. Versatility: It refers to the ability of computers to perform a variety of tasks, simple as well as complex. A general purpose computer is capable of being used in any area of application like business, industry, scientific, technological, statistical and communications. In an organization, it can perform several types of jobs because of its versatility.

5. Storage and retrieval: the computer systems, besides having instant access to data, have huge capacity to store such data in a very small physical space and in a safe way. A normal computer hard disk can store a bulk of data without occupying any physical space.

 

Question-3

Draw block diagram showing the main components of a computer.

Solution:

Question-4

Give three examples of a transaction processing system.

Solution:
A) Departmental Store,

B) ATM,

C) Order and Payroll processing

Question-5

State the relationship between information and decision.

Solution:
Accounting Information System can be better understood with an understanding of the setup of the organization. An organization comprises of independent units pursuing their path to achieve the organizational objectives. In the process, they take independent decisions on the basis of inputs received from different units. The decisions so taken or the data collected is entered into the computer, which may be used by other units also. Thus, every unit within the organization enters and accepts data and transforms it into information for the purpose of decision- making. The data may be generated from internal transactions or external transactions. The external transactions that form the basis for financial accounting are termed as Accounting Information system.

Question-6

What is Accounting Information System?

Solution:
AIS is a system of records that a business maintains for its accounting systems and it includes collecting, processing, summarizing and reporting in terms of money.

Question-7

State the various essential features of an accounting report.

Solution:
1. Payroll Processing: Payroll processing means preparation of wages and salaries and other related matters, such as leave record, etc.

2. Transaction Recording: Transactions are recorded using the application software. Transaction recording is more accurate and also less time consuming because of two major processes, namely, posting into ledger accounts and casting, have been automated, i.e., the software is so designed that the transactions are posted and books are cast at the same time when the transaction is recorded.

3. Ledger: The software is designed in such a manner that, as soon as the transaction is recorded, it is posted to the Ledger account. It is done with the help of account coding, which is done on the basis of what we commonly understand as grouping of accounts.

4. Trial Balance: Since the transactions are posted to the ledger accounts, which are also totaled at the same time, Trial Balance is also ready with the recording of the transaction. Again, it is supported by the application software.

5. Financial Statements: Financial statements are also prepared as the application software is so designed that it takes the accounts according to the coding and places them in the Manufacturing Account, Trading Account, Profit and Loss Account and the Balance Sheet.

Question-8

Name three components of a Transaction Processing System.

Solution:
1. Data Collection: Data collection refers to data collection which may be by manual input, sale machines, scanners etc.

2. Data Edit: Data editing refers to checking the data for correctness.

3. Data Validation: Data validation refers to verification of data and, if any error is detected, rectification thereof.

Question-9

Give example of the relationship between a Human Resource Information System and MIS.

Solution:
The Human Resource Department maintains the records of each employee and prepares the salary or wages payable to them. The payment is made by the Accounts Department; it uses the processed payroll to check its accuracy before releasing the payment. Similarly, information such as the qualification, skill and experience of an individual employee, generated by the Human Resource Department, is used by the Manufacturing Department to place them accordingly.

Question-10

‘An organisation is a collection of interdependent decision-making units that exists to pursue organisational objectives’. In the light of this statement, explain the relationship between information and decisions. Also explain the role of Transaction Processing System in facilitating the decision-making process in business organisations.

Solution:
Accounting Information System can be better understood with an understanding of the setup of the organization. An organization comprises of independent units pursuing their path to achieve the organizational objectives. In the process, they take independent decisions on the basis of inputs received from different units. The decisions so taken or the data collected is entered into the computer, which may be used by other units also. Thus, every unit within the organization enters and accepts data and transforms it into information for the purpose of decision- making. The data may be generated from internal transactions or external transactions. The external transactions that form the basis for financial accounting are termed as Accounting Information system.

An organization may have different information systems, depending on the organization setup, i.e., information is generated at different levels for the designated levels of management. Typically, a management has three management levels and the information needs of each level are different.

TPS refers to the system which processes the transactions of an organization. The processes involved are –

1. Data Collection: Data collection refers to data collection which may be by manual input, sale machines, scanners etc.

2. Data Edit: Data editing refers to checking the data for correctness.

3. Data Validation: Data validation refers to verification of data and, if any error is detected, rectification thereof.

4. Data Manipulation: Data manipulation refers to processing and analyzing the data on a pre-set design.

5. Data Storage: Data storage refers to the process of storing data in the database.

6. Report Generation: Report generation refers to generating the reports in a pre-designed format as a hardcopy or softcopy.

7. Query Support: Query support refers to the process whereby the user of TPS can raise a query and extract the data to get report.

Question-11

Explain, using examples, the relationship between the organisational MIS and the other functional information system in an organisation. Describe how AIS receives and provides information to other functional MIS.

Solution:
MIS is an information system which generates and analyses the reports accurately and timely, and provides this information to the management. The management makes use of this information for the purpose of supervising, controlling and decision – making.

 

AIS is a system of records that a business maintains for its accounting systems and it includes collecting, processing, summarizing and reporting in terms of money.

AIS have relationship with other information systems, such as Human Resource Information System, Manufacturing Information System and Marketing Information System.

We have discussed above that an organization has different departments which pursue the overall organizational goals. Each of these departments within the organization makes use of data or information fed into the system, which is available to other departments for their use. The AIS is the key department within the organization as it takes care of the finances. Consider, the Human Resource Department maintains the records of each employee and prepares the salary or wages payable to them. The payment is made by the Accounts Department; it uses the processed payroll to check its accuracy before releasing the payment. Similarly, information such as the qualification, skill and experience of an individual employee, generated by the Human Resource Department, is used by the Manufacturing Department to place them accordingly.

Manufacturing Department also has a relation with AIS. The manufacturing department basis its production plans on the marketing plans and therefore prepares the requirements list for materials, issues stock procurement list and so on. The accounts department accordingly processes the purchase orders, makes advance payments to suppliers, where necessary, and also makes arrangements for the finances, and generates the Accounts Payable Report.

Thus, it will be observed that AIS has relations with all the departments within the organization. The following diagram shows the relation of AIS with the Human Resource Department, Marketing department and Manufacturing Department.

Question-12

‘An accounting report is essential a report which must be able to fulfil certain basic criteria ‘ Explain? List the various types of accounting reports.

Solution:
The MIS reports are user-specific, which means the management decides the reporting requirement and its design. Usually, MIS reports with respect to accounting data, are-

1. Debtors report: As discussed above, the reports are user- specific but, normally the report is obtained with respect to the age of debtors, i.e., the period since when the amount is due, purchases made by the, say top 20, customers and their list of customers who have not made purchases for the last, say, two months and so on. All these reports are used by the management for better debtor management.

2. Creditors report: Management seeks a report on suppliers to check whether it is availing of the trade discounts, cash discounts etc.,

3. Routine reports: Routine reports refer to reports received regularly, such as inventory report (to ensure cash credit limits are regular), available bank balance (to ensure cheques etc., issued are honored), cash in hand (to ensure meeting of daily expenses) and so on.

4. Exception reports: Exception reports refer to reports specially sought by the management or reports upon matters happening as per instructions. For example, a report may be sought by the management when a critical item in stock has reached below the inventory level. Another example is quality report of items of production.

5. Financial Statements: Management may seek quarterly financial statements for the purpose of review.

6. Other Reports: Management may seek report on other activities of the organization besides the specific reports mentioned above.

Question-13

Describe the various elements of a computer system and explain the distinctive features of a computer system and manual system.

Solution:
1. Input Unit

Input unit is the unit which controls the input devices used for data entry. The input devices used for entering data into the computer system are keyboard, mouse, compact discs, optical scanner, Magnetic Ink Character Recogniser (MICR), Optical Character Recogniser (OCR), barcode reader and smart card reader. Besides the above input devices there are other devices also which respond to voice or a physical touch on the screen. A menu is displayed on the screen and the data is entered by touching on the particular item displayed on the screen. Touch screen input device can normally be seen at airports and departmental stores where the user can extract information by pointing at a particular item. The device is particularly useful and also cost effective where the general information seekers are numerous.

2. Processing Unit

It is also known as the Central Processing Unit (CPU). This is the main part of a computer system. It processes the given data according to the instructions and arranges the information in a manner which provides easier retrieval of the data, when required, by the user. It can be divided into three parts-

a. Arithmetic and logic unit (ALU): It is responsible for performing all the arithmetic computations, such as addition, subtraction, division and multiplication and logical operations involving comparisons among variables and data items.

b. Memory Unit: This unit is used to store data before it is actually processed.

c. Control Unit: This unit is responsible for controlling and coordinating the activities of all other units of the computer system.

3. Output Unit

The device which is used to get the information in a readable and understandable from after processing the given data comprises the output unit. It translates the processed data into readable and understandable information and makes it available to the users through the output device. The output devices are monitor (Visual Display Unit), Printer, LCD (Liquid Crystal Display), plotter and a recently developed device, the speech synthesizer.

There are the basic components of a computer that collectively form a system. These parts are necessary for a computer to perform the basic functions.

 

1. Motherboard: It is the main electronic division of the computer with the help of which other components or peripherals, that are also a part of the operating system, communicate with the other.

2. Processor: it is the processing unit, popularly known as CPU (Central Processing Unit). It controls all the components attached to it.

3. Primary Storage Memory: Primary memory is also known as volatile memory or RAM (Random Access Memory). When we process a data, a copy of that data is opened in the RAM of the computer for changes or calculation to be carried out and then those changes can be saved or left unsaved. The main feature of RAM is a temporary or volatile memory in which data persists only for the time when the power is switched on and is lost once the power is switched off. Another form of memory is ROM., Read Only Memory, which is used for holding programs.

4. Secondary Storage Devices: Secondary storage devices are meant for storing the data permanently on the computer. The data is stored permanently and will stay on the device until the user erases it or the device is damaged by any means. The secondary storage device can be any of the following:

i. Online storage media: It is that part of the computer on which the operating system is stored and is always present as an integral part of the computer for the storage of data, for example, hard disk.

ii. Near-line storage Device: It is the optional media, for example, magnetic tape device, that is not necessary part of the system. Usage of this depends on the requirement of the user.

iii. Offline storage media or distribution media: This media is primarily used for the distribution of data from one computer to another and so on. For example, pen drive, floppy and C.D.

5. Keyboard: It is an input device that is used for input of text into the computer in the CUI (Character User Interest. Keys placed on the keyboard are in a special sequence, according to the make up and strength of the human hand.

6. Second Card and Speakers: The present age is the age of multimedia. Therefore, at present, computers are also equipped with a sound card and speakers. With the help of these, music stored as digital data in the computer is converted into analog data of sound waves.

7. Monitor and Liquid Crystal Display (LCD) Panel: This device is essentially an output device of a computer on which the user can see the work done.

8. Printers: Printers are devices used for producing information as a hard copy i.e.., in a printed form. Printers are broadly of two types:

a. Impact Printers: Printers in which the head of the printer touches the paper during printing are known as impact printers; for example, Dot Matrix Printers, Line Printers, Wheel Printers, Chain Printers and Drum Printers.

b. Non Impact Printers: These are printers in which the head of the printer does not touch the paper during printing; for example, Laser Printers and Inkjet Printers.

Characteristics of a computer system in comparison to human beings are as follows:

 

1. Speed: It can perform jobs at a much higher speed than human beings. Normally, human beings take into account a second or a minute as the unit of time. But computers have such a fast operating capability that the relevant unit of time is fraction of a second.

2. Accuracy: It performs jobs with a high degree of accuracy. The computer cannot make mistakes if proper instructions are given.

3. Reliability: computers are immune to tiredness, boredom or fatigue. Therefore, they are more reliable than human beings.

4. Versatility: It refers to the ability of computers to perform a variety of tasks, simple as well as complex. A general purpose computer is capable of being used in any area of application like business, industry, scientific, technological, statistical and communications. In an organization, it can perform several types of jobs because of its versatility.

5. Storage and Retrieval: the computer systems, besides having instant access to data, have huge capacity to store such data in a very small physical space and in a safe way. A normal computer hard disk can store a bulk of data without occupying any physical space.





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