chapter13 by sofiaie



           1 A TYPICAL MANUAL
   A typical manual system consists of:
     -Separate books of prime entry (not part of the
    double entry)
     -Subsidiary accounts receivable ledger and
    accounts payable ledger (not part of the double
    -General ledger (the double entry system),
    containing accounts receivable and accounts
    payable control accounts
    -Separate cash book (part of the double entry)
 Usually the general ledger is a loose-leaf book
  with a page for each ledger account ,while the
  subsidiary ledger have running totals of amounts
  owing instead of ledger accounts.
  Sales ledger
Customer :J Bloggs
Date                     Dr        Cr        Balance
1 Mar Brought forward                       3978.45
19Mar Invoice 2354      1549                5527.45
23Mar Cash Receipt               3978.45 1549.00
 This operates under the same principles as
  a manual system except that all the records
  will be stored I none place, e.g. the hard
  disk of the computer.
 The system will be broken down into
  sections in the same way as the manual
  system, so few people have access to the
  complete system.
 Instead of the general ledger being a collection of
  ‘T’ accounts,it will probably appear as a listing of
  debits and credits.
 Speed :High volumes if work and rapid turn-round
  and response means faster processing, reduced
  data processing costs and increased throughput.
 Stored programs: Once the programs have been
  written and tested, there are minimal labor costs
  beyond the cost of data imputting, which may itself
  be automated.
   Decision-making :The computer can be
    programmed to undertake complicated decision
    making processes using a wider range of
    quantitative techniques.
   File storage and processing. Large files of data
    can be stored on magnetic media which require
    very little space. Files can be reviewed and
    updated at high speeds, and information can be
    retrieved from them very quickly. This leads to
    improved control and better communication.
   Accuracy and reliability leading to quality cost
    savings and less reliance on staff.
   Lack of intelligence. The computer is a
    machine, Errors that would be detected by
    clerks in a manual system may go unnoticed
    in a computer-based system. To catch every
    potential problem, system development is
    often both prolonged and costly.
   Quantifiable decisions. The program can only
    take decisions that can be quantified. It cannot
    make value judgments. a solution indicated by the
    program many have to be modified because of
    intangible factors known to the manager but
    incapable of being expressed in the program.
   High initial costs
   Inflexibility. They take longer and cost more to
    alter than manual systems.
   Vulnerability .To strikes and natural disaster.
    Recovery procedures must be put in place.
   They are a number of integrated
    accounting packages which handle all
    parts of the accounting system and
    ultimately produce the financial statements.
Type of integrated   Suitable for:      Contains:

Cash book         Small business        Cash book
systems, emulatingselling for cash,
a manual cash     providing a service
book.             and buying
                  inventory from a
                  small group of
                  suppliers for cash
Basis bookkeeping Small business        The above plus:
system            buying and selling    Accounts
                  for cash and credit   receivable ledger
                                        Accounts payable
                                           General ledger including a
                                           cash account
                                           Bank reconciliation
                                           Facility for producing trial
                                           balances and financial

Bookkeeping and   Larger, more complex     The above plus:
accountancy       commercial               Credit control facilities,
system            organization,            Sales invoice generation
                  Greater number of        Customer statement
                  customer and             creation
                  supplier accounts
                  and more sophisticated   Ageing schedules of
                                           Standard letters to chase
                                           overdue receivables.
                                           Inventory control
 Word processing: produces typescript using
  computer facilities ,i.e. the ability to store
  text and to manipulate it on a VDU screen.
 Minimum hardware requirements are:

- VDU and keyboard

- Processor

- Disk drive

- Printer
 Word processing allows for frequently
  revised versions of standard documents,
  easy corrections and less checking than if
  documents have to retyped.
 Types of words processor:

  -dedicated-only used as a word processor
  -a word processing software package on a
  PC or micro-computer.
 Spreadsheet: a computer package that can
  be used for numerous’ modeling’ type
  business application.
  -Displays on the screen a serious of rows
  and columns.
  -The intersection of rows and columns form'
  cell’ into which the user can type information
  using the computer keyboard.
  -Three types of information are
  entered :test, numbers or formulate.
-When the content of any cell is altered the
effects of the alteration are reflected, using
the formula, on all other cells.
-Once a model has been entered onto the
spreadsheet it can be later recalled, altered
and used with new data.
-The output can be printed in tabular form.
   Most spreadsheets have the following features:
     -‘What if’ analysis: the ability to calculate the
    effect of changes in the data or formula used in
    the model
     -Conditional statements: calculations may be
    made dependent upon values in other cells.
     -Look-up tables :the value to be inserted in a
    specific cell can be selected from a range of
    values held in a table.
     -Selective printing :a portion of the model may
    be printed rather than the whole of it.
     -Graphics :bar charts, pie-charts etc.
   Goal-seeking facility :all possible input value
    combinations can be included which produce a
    specified bottom line output value.
   Statistical function :statistical analysis such as
    values for an average, sum, standard deviation,
   Flexibility :the user should have flexibility in
    designing the model ,e.g. inserting blank rows and
    columns, deleting rows and columns and moving
    blocks of rows and columns to another part of the
   Databases :can be used as simple databases
    (see below)
   Database :a collection of information that can be
    used for many different purposes.
   A database is like an electronic card index. Each
    card contains some information ,e.g. about a
    client-it is a record. The items of information held
    (e.g. mane, address, fees) are fields.
   Advantages of a database:
    -Large amount of information held in each record.
-Automatic calculations can be performed
-Records may be sorted, or those matching
a certain criterion selected, automatically,
and in a variety of orders.
-Production of reports based on the
Database design to link the data together:
-Flat file database :a single file database.
All records are of a standard format. Data
can be stored, accessed,sorted and updated.
-Relational database :file can be linked
together and data can be accessed from
any file.
-Programmable database :has its own
programming language which enables the
database to be tailed to individual needs.
-Database management system :software
that runs the database, organizing the input
data and allowing various application
program to use the database.

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