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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Manual vs. computerized accounting systems

The following conversation took place between Durable Construction Co.’s bookkeeper, Kyle Byers, and the accounting supervisor, Sarah Nelson:

Sarah. Kyle, I’m thinking about bringing in a new computerized accounting system to replace our manual system.

I guess this means that you will need to learn how to do computerized accounting.

Kyle: What does computerized accounting mean?

Sarah; I'm not sure, but you’ll need to prepare for this new way of doing business.

Kyle; I’m not so sure we need a computerized system. I’ve been looking at some of the sample reports from the software vendor. It looks to me as if the computer will not add much to what we are already doing

Sarah. What do you mean?

Kyle: Well look at these reports. This Sales by Customer Report looks like our revenue journal, and the Deposit Detail Report looks like our cash receipts journal. Granted, the computer types them, so they look much neater than my special journals, but I don’t see that we’re gaining much from this change.

Sarah: Well, surely there’s more to it than nice looking reports. I’ve got to believe that a computerized system will save us time and effort someplace.

Kyle: I don’t see how. We still need to key transactions into the computer. If anything, there may be more work when It’s all said and done.

Do you agree with Kyle? Why might a computerized environment be preferred over the manual system?

To determine

Computerized accounting system:

The computerized accounting system is the system that is used by the business to recording the financial transaction in electronic form. Computerized accounting systems are widely used by large companies, in the present era, this system is used by even smallest companies. Computerized accounting systems have the following three main advantages over the manual system.

  • This system helps to simplify the record-keeping process,
  • Generally, computerized systems are more accurate than the manual system,
  • It supports the management in the decision-making process.

To discuss: The advantages of a computerized environment in the recording process of the business transactions over the manual system.

Explanation

Book-keeper K is missed some of the main principle benefits of the computerized accounting system. In the computerized accounting system, there are three primary advantages, they are as follows:

  • First, the computerized accounting system is more efficient and accurate at transaction processing, because once the transaction data have been input into the computer, that the information recorded in the electronic journal (file), and posted to the ledger account.
  • Second, the computerized accounting system is more accurate than the manual system, because the computerized environment is less prone to posting, and recording errors...

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