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Accounting is a very important and very big part of the business or any company.
Every business man should keep record of their debits and credits created in the
company. Now I am going to decide which is best for my business, people or
software, whom can I trust more, people or software.
Speed :
The first and the very best reason for choosing computerized accounting
system is speed. Compared to manual accounting system, computerized
accounting system is very fast. All the calculations are done very fast. And
because of the fast calculations, computerized accounting system saves time
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and therefore saves money automatically and which is the good part of any
business.
Accuracy:
The second reason behind choosing computerized accounting system is that
is very accurate. All the calculations are done by the computer itself.
Therefore error is negligible. Accountant has to put all the required formulae
in the computer and then he has to feed the required numbers of balance
sheet and then all the calculations are one click away. Therefore I can say
that computerized accounting system is accurate. And this is the very strong
reason for choosing the computerized accounting system instead of manual
accounting system.
Automatic document production:
In computerized accounting system we don’t have to produce documents.
All the documents are automatically produced by computer itself. This is the
main reason to choose computerized accounting system.
Up-to-date information:
Computerized accounting system is up-to-date with the corporate world. All
the information provided by computer is up-to-date because computer is
connected with internet. All the information required for the accounting is
up-to-date with the internet.
Cost savings:
Computerized accounting system is cost saving also. In manual accounting
all the paper and material used is sometimes very costly. And these all
materials will be needed every time. But in computerized accounting system,
it is usually one time investment. And after that we don’t have to pay more
on maintenance.
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Automatic calculations:
Computerized accounting system is very useful because it is easy to do
calculations in computerized accounting system. As you know, all the
calculations are done automatically by computer; we just have to feed the
required numbers and formulae for the calculations. And there are some soft
ware’s prepared for accounting calculations which companies are using
today for their businesses.
These are some important reasons for choosing the computerized accounting
system instead of manual accounting system.
Now I will be going to describe the points which I observed during the period
when I used computerized accounting system in my company. These points are my
analysis which I can say for sure is very important point for others who want to
choose among computerized accounting system and manual accounting system.
Reduce frustration:
The very important thing I noticed while using the computerized accounting
system is that it is very easy and time saving. Therefore it reduces the
frustration level.
Time saving:
When before I was using manual accounting system, it was difficult to finish
on time. But now because of computerized accounting system I am able to
finish all the calculations before time. And this saves my time and
company’s time too. And time in the business is very important as if you
finish the work on time you can get more profit.
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Instant reporting:
Computerized accounting system gives you instant reporting, you don’t have
to wait till you get the required page or data. You are just a click away from
your required data or calculations. And you can make any report easily and
instantly with the help of computers.
Easy accounts storage:
In computerized accounting system, it is easy to store large amount of data
in a very small and compact disk. Very large and previous data can be easily
stored in computer itself for a very long time. This is very difficult in manual
accounting system. In manual accounting system storing the data is a big
task and it takes time and place.
View the accounts easily:
It is easy to view the accounts at any time in computerized accounting
system. While in manual accounting system it is very difficult to view the
required accounts at any time, because it will take time to find out the
required pages from the manuals or registers. But in computerized
accounting it is again one click away.
These all are the points of my analysis, which I draw from the use of computerized
accounting system.
At the end of this question I can say that computerized accounting system is more
beneficial. There are many reason ns to choose computerized accounting system
which I stated earlier. And all the reasons are giving strong proof to use
computerized accounting system. And if someone is started using computerized
accounting system, he will never go for manual accounting system again.
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Task 3
Trial balance account is an account made in the starting of any financial statement.
It is a list of all the balances in the ledger account. It shows that a debit recorded in
any ledger account is matched with credit recorded in another account. And the
total of all the debit balance should be equal to the total of all the credit balances
that means the accounts of the company are good. Trial balance is the base for the
main financial other statements, the profit and loss statements and trading account.
To prepare a trial balance, first we have to complete the ledger accounts. After that
we can write the trial balance by writing every closing from the ledger accounts as
either a debit account or credit account. All the entries are divided into two parts as
either debit or credit. All the entries are listed in the respective columns. And then
all debit entries are added and made the total then all the credit entries are added
and made the total.
Below is the trial balance made for Intertec System LLC. And this trial balance is
made in 3 columns. And the three columns are named as accounts, debits and
credits. All the entries are recorded from the previous year’s ledger account and
listed in the trial balance.
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Trial balance
Women elegance saloon
As of 2017-01-01
Created 2016-12-02
This was a trial balance made for Intertec System LLC. Trial balance is good
and accurate if the debit total is equal to credit total. And if this debit total is not
equal to credit total then there should be some investigation in the account to check
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that where is the fault. And it shows that all the debit total and credit total is equal.
Means this trial balance is very good and accurate.
Following are some reasons which I guess make any businessman to think that
why he is using a trial balance. It is very important in any business to prepare a
trial balance in advance and then proceed with all other accounts.
Trial balance is the first step in the making of any financial statement. Trial
balance is the paper used by accountants as the base for any financial
statement.
Trial balance gives surety that for every debit entry written in the accounts,
there will be a credit entry written also according to the double entry
concept. And these two entries total should match. And if this total doesn’t
match then the difference should be checked before further procedure of
making other financial accounts.
Doing this rectification work in financial statement can be very lengthy and
hectic, so it is easy and achievable if all the errors are corrected in trial
balance.
Trial balance proves that all the calculations done previously are correct and
extracted properly from ledger accounts.
Trial balance gives you the correct list of rectifications and errors in the
upcoming accounting.
These are some purposes of trial balance and now I am going to describe some
limitations of trial balance.
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Trial balance is the balance sheet which check only debits and credits, and this
prove that there is no guarantee that it cannot do errors. Now I will describe some
errors which can occur in trial balance.
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These are some limitations which show that errors can be done in trial balance and
we cannot find it out because of the balanced total.
According to these points I can say that preparing trial balance is very important in
any business, but we should understand the limitations also and we should keep
proper account on all these limitations so that we can get a perfect accounting
system.
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References
http://www.accountingtools.com/questions-and-answers/what-is-the-purpose-of-a-
trial-balance.html
https://en.wikipedia.org/wiki/Trial_balance
http://www.itseducation.asia/computerized-accounting.htm
http://smallbusiness.chron.com/advantages-disadvantages-computerized-
accounting-4911.html
https://www.experience.com/alumnus/article?
channel_id=accounting&source_page=breaking_in&article_id=article_117338520
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http://www.futureaccountant.com/accounting-process/study-notes/trial-
balance.php#.WD2KdLlo1dg
http://www.dummies.com/business/accounting/preparing-a-trial-balance-for-your-
business/
http://www.itseducation.asia/computerized-accounting.htm
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http://smallbusiness.chron.com/advantages-manual-vs-computerized-accounting-
4020.html
http://www.cleveraccounting.com/9-advantages-computerized-accounting/
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