Worksheet 3 (term 1)

Question 1

Name the applications computers can be used for

Answer 1

Invoice, stock and order processing
Computerised ledgers
Spreadsheets
Databases
Payroll

Question 2

Explain invoice, stock and order processing

Answer 2

All source documents can be completed by an accounting program
Posting is done directly to the books of first entry and ledgers
Invoices are completed automatically including all calculations and discount (these completed invoices can then be stored and printed)
Computers can also be used in stock control

Question 3

Explain computerised ledgers

Answer 3

All three ledgers can be completed by an computer:

Debtors ledger with all debtors’ accounts
- Computers draw up monthly statements much quicker and more accurately meaning that the time debtors take to pay accounts should be less.

Creditors ledger with all creditors’ accounts

• EFT or standing order payments can be scheduled
• Summary of transactions is available at the end of the month

General ledger with all accounts of the business

• All accounts are balanced
• Trail balance and final accounts are drawn up at the end of the month
• Business can use ledger accounts to analyse what is going on in the business

Question 4

Explain spreadsheets

Answer 4

Can be used to sort and search information and draw graphs
It’s quick and easy as you can change formulae to recalculate all amounts
Useful in planning in cost accounting
Can also be used for budgeting, forecasting, stock control etc.

Question 5

Explain payroll

Answer 5

Computers will calculate net salary of wages as well as deductions of employees correctly
Net wages amounts are then electronically paid into back accounts of the employees at the end of the month

Question 6

Explain how a computerised system is more advantageous than a manual system of accounting

Answer 6

Computers save time because entries and calculations are done faster and more accurate
Computers are effective if controls are built into programs
Computers increase productivity
Computers help employees to be more effective in producing the information needed
Computers produce information quickly to do planning

Question 7

Explain the application and advantages of computers as a tool for communication technology

Answer 7

Computers and cellphones have made it easier and cheaper for the business to communicate with the outside world.

Electronic banking
- Business can pay accounts and doesn’t have to go to the bank, can use computers and cellphones anywhere

2 ways of combatting fraud

• 1 person loads the amounts to be paid and another has to authorise it
• daily limits for payments can be set

Computers can make direct payments into the account of the business

Database and computerised accounting system can be a link to send out statement of accounts as reminders to debtors

System can also be used to advertise specials

Question 8

Explain what a debit order is

Answer 8

When the business gives a written instruction to the bank to pay from their bank account an AMOUNT to a specific person until the instruction is cancelled, payment is normally done every month

Question 9

Explain what a stop order is

Answer 9

When the business 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, payment is normally done every month

Question 10

Explain databases

Answer 10

An organized set of data e.g. list of names and addresses
List of all clients with overdue accounts can be printed
Cheaper and easier to put together than a program specifically written for the business
Used for a general purpose and not just specifically for accounting