Q1 :
State the four basic requirements of a Database Applications.

Answer :
The following are the four basic requirements of a Database Application.
a. Front-end Interface- It acts as an interactive connecting link between the user and the
database oriented software through which the user communicates or interacts to the backend
database.
b. Back-end Database- It is the data storage system that is hidden from the users. It responds
to the requirement of the users to the extent the user is authorised to access.
c. Data Processing- It is a sequence of actions that are taken to transform the input data into
useful information for taking various decisions.
d. Reporting System- It is an integrated set of objects that includes all the relevant information
that constitutes a report.

Q2 :
Name the various categories of Accounting Package.
Answer :
The Accounting Packages are classified into the following categories.
a. Ready-to-use or Readymade Software.
b. Customised Software
c. Tailored or Tailor-made Software.

Q3 :
Name the various categories of Accounting Package.
Answer :
The Accounting Packages are classified into the following categories.
a. Ready-to-use or Readymade Software.
b. Customised Software
c. Tailored or Tailor-made Software.

Q4 :
List the various advantages of Computerised Accounting Systems.
Answer :
The mentioned below are the various advantages of Computerised Accounting
Systems.
a. Speed
b. Accuracy
c. Reliability
d. Up-to-Date Information
e. Real Time User Interface
f. Automated Document Production
g. Scalability
h. Legibility

Q5 :
Give two examples each of the organisations where 'ready-to-use', 'customised',
and 'tailored' accounting packages respectively suitable to perform the
accounting activity.

Answer :
'Ready-to-use' accounting packages are basically used by the small-sized enterprises.
For example, grocery stores, medical stores, etc.
On the other hand, 'Customised' accounting packages are basically used by the
medium and large business. For example, shopping malls, hospitals, etc.
Whereas, 'Tailored' accounting packages are basically used by the geographically
scattered businesses. For example, MNC's, Communication Industries, etc.

Q1 :
Define a Computerised Accounting System.

Answer :
Computerised Accounting Systems is based on the concept of database. It is an
accounting information system that processes the financial transactions and events in
accordance to the Generally Accepted Accounting Principles (GAAP) to produce reports
as per the requirements of the users.
The computerised accounting is one of the database oriented application, where in the
transactions data is stored in a well-organised database.

Q2 :
Discuss the advantages of Computerised Accounting Systems over the Manual
Accounting Systems.

Answer :
The following are the various advantages of the Computerised Accounting Systems
over the Manual Accounting Systems.
1. Speed- The speed of a computer is very high and takes very less time in performing
various difficult operations. The accounting data is processed comparatively faster
through the Computerised Accounting Systems than it can be done through the manual
efforts.
2. Accuracy- In Computerised Accounting Systems, the possibility of errors is
minimised or reduced as the primary accounting data is entered only once for preparing
various accounting reports and for subsequent usage and processes.
On the other hand, in Manual Accounting Systems, posting of same data is required a
numerous times to prepare different types of accounting reports. This increases the
possibility of accounting errors.
3. Reliability- As the Computerised Accounting Systems is well-equipped in performing
repetitive operations, so it is comparatively more reliable to perform the operations than
the manual system. Also, the Computerised Accounting Systems overcome the
limitation of Manual Accounting Systems such as tiredness, boredom or fatigue, etc.,
thereby enhances the degree of reliability.
4. Up-to-Date Information- In the Computerised Accounting Systems, whenever the
new accounting data is entered and stored, the existing accounting records
automatically gets updated. For example, when a transaction related to purchase of
machinery is entered in the Computerised Accounting Systems, then automatically the
cash balance and machinery balance on the Assets side of the Balance Sheet gets
updated immediately. This ensures that latest information is reflected in the accounting
reports at any particular period of time.
On the other hand, the accounting records maintained under the Manual Accounting
Systems fail to reflect the latest status. This is because it depends on the human mental
capability and patience to update the records each time a transaction happens.
5. Real-Time User Interface- Most of the automated accounting systems are interlinked
through a network of computers. The availability of information to various users at
the same time on the real-time basis is facilitated under computerised system of
accounting. This is very difficult to avail such facility under manual system as this call for
availability of multiple copies of the accounting records that can be accessed by many
users at the same time.
6. Automated Document Production- Under Computerised Accounting Systems, the
accounting reports such as, Cash Book, Trial balance, Statement of Accounts, etc. are
very easy to obtain. This is because most of the computerised systems have
standardised and user-defined format of accounting reports that are generated
automatically. On the other hand, such an ease cannot be enjoyed under manual
system. This is because the accounts books are prepared by different employees,
thereby subjected to vary from person to person.
7. Scalability- The computerised systems of accounting are highly scalable as the
requirement of additional manpower is mainly confined to data entry for recording and
storing the additional vouchers in the computers. Thus, the additional cost of processing
additional transactions is meagre as compared to the cost associated with hiring new
accountants to handle additional transactions.
8. Legibility- In Computerised Accounting Systems, the accounting records are typed
and presented in standard fonts. The various characters especially numbers, alphabets,
graphics, etc. are more clear and can be read without any difficulty and ambiguity. But,
in the manual system, the writing of different personnel varies; consequently, reading
and interpreting the written materials involve errors due to misinterpretation.

Q3 :
Describe the various types of accounting software along with their advantages and limitations.

Answer :
The various types of accounting software are:
1. Ready-to-use
2. Customised
3. Tailored
Ready-to-use Software- This type of software is readily available in the market with
prescribed and standard features. This accounting software is basically used by the
small-size business enterprises, where the number of transactions is not so large. The
cost of its installation and maintenance is also low. It has limited number of users. Its
adaptability is very high as it is relatively easier to learn and operate. It does not have a
wide scope to link it with other information systems.
Customised Software- Customised software is the software that has standardised
features to meet the special requirements of the users. It provides the scope of
changing the features of accounting software. The functions of this software can be
programmed as per the needs and requirements of the users. This type of software best
suits the needs of medium and large businesses. Its cost of installation and
maintenance is comparatively higher. It can be easily linked to the other information
systems.
Tailored Software- Tailored or Tailor-made accounting software is the software that is
developed as per the specifications and requirements of the users. This accounting
software is generally used in the large business organisations with multi-users and
geographically scattered locations. It is designed to meet the specific needs of the users
and form an integral part of the organisational MIS. It has infinite number of users.
Advantages of Ready-made Accounting Software
The advantages of Ready-made Accounting Software are enlisted below.
1. This software is easily available in the market.
2. It is less expensive, as it comes with basic and standard features.
3. It involves a lesser need for training.
4. It is less sophisticated.
5. Its adaptability is very high as it is relatively easier to learn and operate.
6. It is suitable for small-size business enterprises.
Disadvantages of Ready-made Accounting Software

The disadvantages of Ready-made Accounting Software are enlisted below.
1. It has limited number of users.
2. It is not suitable for medium and large business organisation, where the number of
transactions is very large.
3. It fails to cater the specific needs of the users.
4. It suffers from the low level of data secrecy.
5. It does not have a wide scope to link it with other information systems.
Advantages of Customised and Tailor-made Accounting Software
The following are the advantages of Customised and Tailor-made AccountingSoftware.
1. This software is suitable for medium and large business organisation.
2. It caters the specific requirements and needs of the users.
3. It can be modified as per the needs of the organisation.
4. It has high level of security and minimises the loss and unauthorised access of data.
5. It cannot be easily imitated or duplicated in the market due to difference in the needs and
requirements of different users.
6. It does not involve high cost of training as the training can be imparted within the
organisation by the experienced personnel.
7. It can be easily linked to the other information systems.
8. It forms an integral part of the organisational MIS.
Disadvantages of Customised and Tailor-made Accounting Software
The following are the disadvantages of Customised and Tailor-made Accounting
Software.
1. It involves high cost of installation and maintenance.
2. Developing customised software is a time-consuming process and involves high cost of
development.
3. Maintenance of this software is difficult as there exists limited availability of knowledge to the
developers.
4. It lacks standard training module.

Q4 :
'Accounting software is an integral part of the Computerised Accounting Systems' Explain. Briefly list the generic considerations before sourcing accounting software.

Answer :
The accounting software does form an integral part of the Computerised Accounting
Systems. The accounting software should be selected after considering the level of skill
and proficiency of the accounting professionals. This is one of the important aspects
that should be taken care of before introducing Computerised Accounting Systems, as
the accounting professionals are responsible for accounting and the not computers.
The following are some of the important points that should be taken into consideration
before introducing accounting software in an organisation.

1. Flexibility- This is the most important factor that should be considered before sourcing
accounting software. The accounting software should be flexible in terms of data entry,
retrieval of data and generating design of reports. The software should be able to run on
different computers having different operating systems and having different configurations. It
should provide some flexibility among its users. It should also provide easy switch over
between users, operating system and hardware.

2. Cost of Installation and Maintenance- The selection of accounting software largely
depends upon its cost to the organisation. The cost of accounting software includes cost of
installing the related components and hardware, maintenance and alteration costs, cost of
training the staff and cost involved in recovering data in case of data failure. An organisation
needs to evaluate the benefits of the software against its costs. Based on its evaluation, an
organisation will introduce the software if the benefits are more than the cost and if it is in the
affordable range of the organisation.
3. Size of Organisation- The size of an organisation also determines the selection of
accounting software. The small-sized organisations, where the volume of business
transactions is not so large, usually opt for simple and single user oriented software. On the
other hand, large scale organisations, where the volume of business transactions is very
large choose the latest and sophisticated software for meeting the multi-user requirements.
4. Training Needs- Another factor that affects the choice of software is the training needs.
There are some accounting software that requires comparatively lesser training and are
more user-friendly. While, there are some other complicated software that requires
continuous and thorough training.
5. Level of Secrecy- The level of expected security is one of the important factors that an
organisation bears in mind before sourcing accounting software. Software should be able to
prevent the unauthorised access and manipulation of data. It should have in-built features of
security. For example, in tailored software the user rights may be restricted according to their
work or responsibility criteria.
6. Exchanging Data Facility- The capability of accounting software to transfer data is another
important factor to be considered for its selection. The accounting software should be able to
provide an easy and safe transfer of data from one system to another system and during
migration of database.

7. Utilities/MIS Reports- Another factor which helps in determining the software selection is
the MIS reports and the extent to which they are used in the organisation.
8. Vendor Reputation and Capability- The selection of software is also affected by the
capability and competence of the vendor. It depends upon the reputation of the vendor in the
market, the user-reviews of the similar software, the extent of post sales support services
from the vendors, etc.
Q5 :
'Computerised Accounting Systems are best form of accounting system'. Do you
agree? Comment.
Answer :
Yes, we agree with this statement that 'Computerised Accounting Systems are best
form of accounting system'. It becomes very easier to work with Computerised
Accounting Systems leading to reduction in the accounting errors. Moreover, the
computerised accounting reports are highly reliable, thereby enhances the overall
efficiency.
Due to the following positive aspects, the Computerised Accounting Systems certainly
enjoy an edge over the Manual Accounting Systems.
1. Speed- The speed of a computer is very high and takes very less time in performing
various difficult operations. The accounting data is processed comparatively faster
through the Computerised Accounting Systems than it can be done through the manual
efforts.
2. Accuracy- In Computerised Accounting Systems, the possibility of errors is
minimised or reduced as the primary accounting data is entered only once for preparing
various accounting reports and for subsequent usage and processes.
On the other hand, in Manual Accounting Systems, posting of same data is required a
numerous times to prepare different types of accounting reports. This increases the
possibility of accounting errors.
3. Reliability- As the Computerised Accounting Systems is well-equipped in performing
repetitive operations, so it is comparatively more reliable to perform the operations than
the manual system. Also, the Computerised Accounting Systems overcome the
limitation of Manual Accounting Systems such as tiredness, boredom or fatigue, etc.,
thereby enhances the degree of reliability.
4. Up-to-Date Information- In the Computerised Accounting Systems, whenever the
new accounting data is entered and stored, the existing accounting records
automatically gets updated. For example, when a transaction related to purchase of
machinery is entered in the Computerised Accounting Systems, then automatically the
cash balance and machinery balance on the Assets side of the Balance Sheet gets
updated immediately. This ensures that latest information is reflected in the accounting
reports at any particular period of time.
On the other hand, the accounting records maintained under the Manual Accounting
Systems fail to reflect the latest status. This is because it depends on the human mental
capability and patience to update the records each time a transaction happens.
5. Real-Time User Interface- Most of the automated accounting systems are interlinked
through a network of computers. The availability of information to various users at
the same time on the real-time basis is facilitated under computerised system of
accounting. This is very difficult to avail such facility under manual system as this call for
availability of multiple copies of the accounting records that can be accessed by many
users at the same time.
6. Automated Document Production- Under Computerised Accounting Systems, the
accounting reports such as, Cash Book, Trial balance, Statement of Accounts, etc. are
very easy to obtain. This is because most of the computerised systems have
standardised and user-defined format of accounting reports that are generated
automatically. On the other hand, such an ease cannot be enjoyed under manual
system. This is because the accounts books are prepared by different employees,
thereby subjected to vary from person to person.
7. Scalability- The computerised systems of accounting are highly scalable as the
requirement of additional manpower is mainly confined to data entry for recording and
storing the additional vouchers in the computers. Thus, the additional cost of processing
additional transactions is meagre as compared to the cost associated with hiring new
accountants to handle additional transactions.
8. Legibility- In Computerised Accounting Systems, the accounting records are typed
and presented in standard fonts. The various characters especially numbers, alphabets,
graphics, etc. are more clear and can be read without any difficulty and ambiguity. But,
in the manual system, the writing of different personnel varies; consequently, reading
and interpreting the written materials involve errors due to misinterpretation.

Thank You.