Question

Most organisations have a range of policies and procedures relating to the operation of their accounting systems. Describe in how you would apply policies and procedures to operating a computerized accounting system (120 - 150words).

Please remember do not quote GAAP as policies and procedures for operating a computerized accounting system as it is refered as Generally Accepted Accounting Principles and the term applies to the accepted accounting principles used in any country, not for computerised system.

(Please consider Australian Accounting environment)

(Please type up your answer!)

Answer 1

SOLUTION:

In manual accounting system all journal entries, ledger, trail balance, income statement, balance sheet, cash flow statement and other financial statements & documents be created by hand. However in computerize accounting system user inputs all data through accounting software program. In computerize accounting system all financial statements and books of accounts to be created from data and information stored in computerize accounting database. We use accounting software to apply accounting policy and procedure in computerize environment. There are many accounting package created with follows organization basis accounting principle and procedures. These package easily available in market. These accounting package perform the accounting activity, compliance all related laws, rules, regulations follows all accounting policies and procedures and generate reports as per requirement of the management of organization. These accounting packages can be classify in following three categories

1.            Ready to use- Use for small business where volume of accounting transactions is very low.

2.            Customized- This type of accounting package to be customized to meet special requirements of user, where a ready to use accounting package not fulfills all to user's requirements.

3.            Tailored-   Used for large business organization with multi users and works in different geographically location.

Each organization uses accounting package as per his suitability and organization’s accounting needs.