UNIT 5: COMPUTERISED ACCOUNTING SYSTEM
Chapter 1: Overview and Structure of
CAS
Revision Notes
Computerised Accounting System (CAS)
A Computerised Accounting System (CAS) is a method of maintaining financial records using
computers. It encompasses the processing of accounting transactions with the aid of
hardware and software to create and preserve accounting records and generate various
accounting reports. CAS processes accounting transactions via accounting software and
produces reports that include:
• Day books/Journals
• Ledger
• Trial balance
• Trading account
• Profit and loss account
• Balance sheet, etc.
Common Uses of Computers in Accounting
• Recording Business Transactions
• Payroll Accounting
• Stores and Inventory Accounting
• Generation of Accounting Reports
Note: The fundamental principles of accounting remain consistent, whether records are
maintained manually or using computerised systems.
Features of Computerised Accounting System
1. Simplicity and Integration: CAS simplifies and integrates various business
operations, including purchasing, sales, finance, inventory management, and
manufacturing.
, 2. Speed: CAS operates at a significantly higher speed compared to manual methods.
3. Accuracy: Computerised systems are renowned for their precision. It ensures
accurate outcomes, reducing the risk of errors in calculations and data entry.
4. Reliability: CAS processes vast amounts of data, resulting in reliable financial
information.
5. Versatility: CAS can perform a wide range of tasks. From a few accounting entries,
one can generate essential financial reports.
6. Transparency: CAS enhances transparency in day-to-day business operations.
7. Scalability: CAS adapts to changing business sizes and complexities effortlessly.
8. Online Access: CAS offers online capabilities for storing and processing transactions
and data.
9. Security: CAS ensures that only authorised users have access to sensitive
accounting data.
Components of Computerised Accounting System
Components of CAS can be classified into six categories:
1. Hardware: Physical devices that allow input (keyboard, mouse) and produce output
(monitor, printer).
2. Software: A collection of programmes that act as intermediaries between hardware
and users.
◦ System Software: Operating systems (Windows, Linux) and utility software.
◦ Application Software: Designed to perform specific tasks (MS Office,
Payroll software).
3. People: The most vital element (Live-ware). Includes System Analysts, System
Programmers, and System Operators.
4. Procedure: Step-by-step instructions (Hardware-oriented, Software-oriented, and
Internal procedures).
5. Data: Raw facts and figures input into the system.
6. Connectivity: Interconnection of multiple computers to facilitate sharing of
information.
Chapter 1: Overview and Structure of
CAS
Revision Notes
Computerised Accounting System (CAS)
A Computerised Accounting System (CAS) is a method of maintaining financial records using
computers. It encompasses the processing of accounting transactions with the aid of
hardware and software to create and preserve accounting records and generate various
accounting reports. CAS processes accounting transactions via accounting software and
produces reports that include:
• Day books/Journals
• Ledger
• Trial balance
• Trading account
• Profit and loss account
• Balance sheet, etc.
Common Uses of Computers in Accounting
• Recording Business Transactions
• Payroll Accounting
• Stores and Inventory Accounting
• Generation of Accounting Reports
Note: The fundamental principles of accounting remain consistent, whether records are
maintained manually or using computerised systems.
Features of Computerised Accounting System
1. Simplicity and Integration: CAS simplifies and integrates various business
operations, including purchasing, sales, finance, inventory management, and
manufacturing.
, 2. Speed: CAS operates at a significantly higher speed compared to manual methods.
3. Accuracy: Computerised systems are renowned for their precision. It ensures
accurate outcomes, reducing the risk of errors in calculations and data entry.
4. Reliability: CAS processes vast amounts of data, resulting in reliable financial
information.
5. Versatility: CAS can perform a wide range of tasks. From a few accounting entries,
one can generate essential financial reports.
6. Transparency: CAS enhances transparency in day-to-day business operations.
7. Scalability: CAS adapts to changing business sizes and complexities effortlessly.
8. Online Access: CAS offers online capabilities for storing and processing transactions
and data.
9. Security: CAS ensures that only authorised users have access to sensitive
accounting data.
Components of Computerised Accounting System
Components of CAS can be classified into six categories:
1. Hardware: Physical devices that allow input (keyboard, mouse) and produce output
(monitor, printer).
2. Software: A collection of programmes that act as intermediaries between hardware
and users.
◦ System Software: Operating systems (Windows, Linux) and utility software.
◦ Application Software: Designed to perform specific tasks (MS Office,
Payroll software).
3. People: The most vital element (Live-ware). Includes System Analysts, System
Programmers, and System Operators.
4. Procedure: Step-by-step instructions (Hardware-oriented, Software-oriented, and
Internal procedures).
5. Data: Raw facts and figures input into the system.
6. Connectivity: Interconnection of multiple computers to facilitate sharing of
information.
