How Computers Can Be Utilized In Accounting. Worksheet 3 Flashcards
1.What applications can computers be used for?
- Invoice,stock & order processing
- Computerised ledgers
- Spreadsheets
- Databases
- Payroll
2.Explain the application Invoices, stock and order processing.
- Invoice, stock and order processing
All source documents can be completed by an accounting program; posting is done directly to the books of first entry and ledgers. Invoices are automatically including all calculations and any discount. These completed invoices can then be stored & printed. Computers can also be used in stock control-business will know at all times how much stock is available and how many items it has sold.
3.Explain the application computerised ledgers.
-Computerised ledgers
All three ledges can be completed by a computer:
- Debtors Ledger with all the debtor’s accounts
~ Computers draw up monthly statements much faster and more accurately; this means that the time debtors take to pay their accounts should be less.
-Creditors Ledger with all the creditor’s accounts:
~ EFT or standing order payments can be scheduled.
~ A summary of transactions is also available at the end of the month.
-General Ledgers with all the accounts of the business:
~All the accounts are balanced.
~The trial balance & final accounts are drawn up at the end of the month.
~The business can use the ledger accounts to analyse what is going on in the business.
4.Explain the application Spreadsheets.
Spreadsheets:
- Can be used to sort and search information and draw graphs.
- It is quick and easy as you can change formulae to recalculate all amounts.
- Useful in planning cost accounting.
- Can also be used for budgeting, forecasting, stock control, job costing and analysis.
5.Explain the application Databases.
Databases:
- Is an organised set of data for example list of names & addresses.
- List of all clients with overdue accounts can be printed.
- Used for general purpose and not just specifically for accounting.
6.Explain the application payroll.
Payroll:
- Computers will calculate the net salary or wages as well as the deductions of the employees correctly.
- Net wages amounts are then electronically paid into the bank accounts of the employees at the end of the month.
- Explain how a computerised system is more advantageous than a manual system of accounting.
- Computers save time because entries & calculations are done faster and more accurate.
- Computes are effective if controls are built into programs.
- Computers increase productivity.
- Computers help employees to be more effective in producing information needed.
- Computers produce information quickly to do planning.
8.Explain the applications and advantages of computers as a tool for communication technology.
Computers have made it easier and cheaper for businesses to communicate with the outside world.
Electronic banking- Businesses can pay accounts electronically instead of going to the bank itself.
Two ways of combatting fraud:
- One person loads the amount to be paid and the other authorises it.
- Daily limits for payments can be set.
Debit orders:
Businesses gives a written instruction to the bank to pay from their bank account AN AMOUNT to a specific person until the instruction is cancelled. Payments are normally done at the end of the month.
Stop orders:
Businesses gives a written instruction to the bank to pay from their bank account a FIXED AMOUNT to a specific person until the instruction is cancelled. Payments are normally done every month.
Customers can make direct payments into the account of the business and send proof of payment via email.
The databases and the computerised accounting system can be linked to send out statement of accounts as reminders to the debtors.This system can also be used to advertise specials.
Businesses can research their competition as well as search for suppliers and possible products to sell via the internet.
