Forum 6: Financial Statements

Answer the questions properly with your own words!

-          What are the advantages and disadvantages of computerized accounting programs over
traditional manual accounting?

-          Why do you think companies are changing to a paperless office?

-          Do you think it is important to keep a hard copy of financial records even if you are using
a computerized system? Why/ why not?

Find the definition of:

- ledgers

- bank reconciliations

- cash in hand

- receipts

- invoices

Answer

1. What are the advantages and disadvantages of computerized accounting programs

over traditional manual accounting?

Answer : the advantages of manual accounting :

Comparatively cheap workforce and resources, reliability, independence from machines, skilled
workers availability;

 the disadvantages include: reduced speed, increased effort of accountants, relatively slower
internal control reporting, routine work and some others.

the main advantages of computerized accounting :

high speed and mobility of reporting, reliability, no routine work, increased accuracy, internal
control system of increased productivity, easy back up and restoration of records;

 the disadvantages include: extremely high costs on developing, introducing and using the
system, special trainings for personnel, increased personnel costs, dependence on machines etc.
2. Why do you think companies are changing to a paperless office?

Answer : I think, paperless office can  save a great deal of money by decreasing wasted space,
eliminate unnecessary time searching for documents, ease compliance requirements, and
improve client service.

3. Do you think it is important to keep a hard copy of financial records even if you are
using a computerized system? Why/ why not?

Answer :  I  think, it is important to keep a hard copy  because unexpected events can occur, and
hard copy backup is needed, in addition to not needing to open the computer for its operation, it
can be operated anywhere for the addition or reduction of financial records.

Definition of:

 A ledger is a written or computerized record of all the transactions a business has

completed. These transactions are recorded in the ledger in different accounts. This list of
accounts is most often called the chart of accounts.
 Bank reconciliations is the process of matching the balances in an entity's accounting
records for a cash account to the corresponding information on a bank statement. The
goal of this process is to ascertain the differences between the two, and to book changes
to the accounting records as appropriate.
 Cash in hand : a payment made directly in cash, rather than through a bank businesses
that pay suppliers cash in hand for a cheaper service.
 Receipt is a piece of paper or electronic document confirming that the seller received
money from the purchaser. The receipt typically includes the date and a description of the
item the purchaser bought. It also includes a description of the item the buyer purchased.
  invoice is a document used to itemize and record a transaction between a vendor and a
buyer. Typically, a business sends an invoice to a client after they deliver the product or
service. The invoice tells the buyer how much they owe the seller and sets up payment
terms for the transaction.

Thank you
Putri Rachel 43219110017

Replied from lecturer Marifa

Very good and thorough answer!, I don't really understand accounting and your answers sound
very good to me in the sense of accounting and grammar...
1. The advantages and disadvantages of computerized accounting programs over
traditional manual accounting?

 Advantage : Simplicity
Most business owners are not accountants or bookkeepers by trade and find it challenging
to do most accounting tasks. This is where accounting software programs give a business
owner advantages.  Many programs provide prompts for the type of data that should be
entered in each section. Once the system is established with bank accounts, debts and
vendors, the business owner only needs to update information as it comes in.
 Disadvantage: Technical Issues
When dealing with computers, issues can arise. Computers might acquire a virus and fail.
There is also the potential of users incorrectly performing software tasks that they are not
familiar with. If a user tries to do one thing but inadvertently does something else, it
might take some work to undo the error.

2. Why do you think companies are changing to a paperless office?

Because paperless offices can process a much larger volume of paperwork compared to
traditional offices in the same amount of time. Further, digitization reduces money spent on
paper, printers, ink, postage, office space for files and employee time to manage paperwork.

3. Do you think it is important to keep a hard copy of financial records even if you are
using a computerized system? Why/ why not?
I think it's important as a consequence, keeping documents in the safest place possible will
greatly reduce the likelihood of theft. Storing papers in a document storage facility would be one
way of ensuring this security, although many opt for safety deposit boxes or simple office
storage. Storing physical documents in a safe location are objectively much harder to access than
electronic copies sitting in cloud storage or on hard drive.

Find the definition of :

1. Ledgers : a ledger is a book or collection of accounts in which account transactions are
recorded. Each account has an opening or carry-forward balance, would record
transactions as either a debit or credit in separate columns and the ending or closing
balance.
2. Bank Reconciliations : is a document that compares the cash balance on a company's
balance sheet. The financial statements are key to both financial modeling and
accounting. to the corresponding amount on its bank statement. Reconciling the two
accounts helps identify whether accounting changes are needed.
3. Cash In Hand : a payment made directly in cash, rather than through a bank businesses
that pay suppliers cash in hand for a cheaper service.
4. Receipts : is a written acknowledgment that something of value has been transferred
from one party to another. In addition to the receipts consumers typically receive from
vendors and service providers, receipts are also issued in business-to-business dealings as
well as stock market transactions.
 5. Invoices : is a document that a business sends to a buyer. When an invoice is sent to a
customer, it acts as an official request for payment for these products or services. Start
invoicing for free. Invoices establish an obligation for the customer to pay the business
within a certain time frame.

Thank you 
Novia Laksmita (43219110129)