Important Questions for Class 11

Accountancy
Chapter 12 – Applications of Computer in Accounting

Very Short Answer Questions 1 Mark

1. What is a computer system?

Ans: A computer is an electrical device that can carry out a variety of tasks based
on a set of instructions.

2. What is the purpose of transaction processing system?

Ans: The aim of a transaction processing system is to keep track of, process,
validate, and store business transactions.

3. Fill in the blank.

i. __________ is a Language syntax checked by software.

ii.__________ is an example of management responsibility.

iii. _____________collect, Record, process data for business decision making.

iv. ______________ is more accurate than manual accounting system.

Ans:

i. Language processor

ii. Cash position

iii. Management information system

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iv. Computerized accounting system

4. What are the four components of transaction support system?

Ans: The four components of a transaction support system are as follows:

i. Input

ii. Processing

iii. Storage

iv. Output.

5. What is a utility program?

Ans: A utility program is a software used to do some routine functions of a

computer.

Short Answer Questions 2 Marks

1. Name the elements of computer system.

Ans: The elements of computer system are as follows:

i. People

ii. Hardware

iii. Software

iv. Procedure

v. Data

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vi. Connectivity

2. What are the capabilities if a computer?

Ans: The capabilities of a computer are as follows:

i. Speed

ii. Accuracy

iii. Reliability

iv. Versatility

v. Data Storage

3. What do you understand by internal and external transactions?

Ans: If material is provided from the shop to any department of the same company
it's thought of as internal dealings. Whereas if a department purchases any material
from outside it's thought of as external dealings.

4. What are the limitations of a computer system?

Ans: The limitations of a computer system are as follows:

i. It doesn't have any good judgment and it's zero intelligence quotients (IQ)

ii. It isn't able to make decisions on its own.

5. State the activities involve in business process in the marketing department.

Ans: The activities involve in business method within the marketing department are:

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i. Contact creation

ii. Inquiry

iii. Entry of orders

iv. Billing to customers

v. Dispatch of goods

Short Answer Questions 3 Marks

1. What are the advantages of computer accounting?

Ans: The advantages of computer over accounting are as follows:

i. All calculations are done mechanically by a computer.

ii. It is more correct in minute details so it is more reliable.

iii. Computer storage is more secure.

iv. Through web connectivity, information will be accessed from anyplace.

v. It reduces human effort so it is also cost-effective.

2. State the features of computerized accounting system.

Ans: The features of computerized accounting system are:

i. Printing sales and buying invoices.

ii. Storing accounting information online.

iii. Coding each account and transaction using unique code.

iv. Reporting all finances instantly.

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v. Filing tax, return, GST, stock valuation and payroll report.

3. State the activities involve in business process in the production department.

Ans: The activities involve in business method within the production department
are:

i. Getting ready schedules and plans.

ii. Provision job cards and material requisition forms.

iii. Provision inventory.

iv. Issue orders for acquisition of raw materials.

v. Releasing payment of vendors.

4. What is the process of designing accounting reports from accounting data?

Ans: The process of designing accounting reports from accounting data is:

i. Process the objective: Like the decision to be made from the report and who will
be the user of the report.

ii. Report structure: the fashion of presenting the report, the knowledge that is
needed within the report.

iii. Querying with the database: Queries associated with the accounting and
methodology needed whereas interacting the database and.

iv. Finalising the report.

5. What are the relationship between decision and information?

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Ans: Information is the fundamental necessity in facilitating the selection so
information is one of the most valued resources of any organization.

The management information system provides data for decision making and the
decision support system helps in supporting decisions of the company.

Every organisation receives inputs and turns them into outputs like a system. Via a
process of resource allocation, which is done through the process of management
decision-making, every organisation system strives to achieve a certain goal.
Information aids an organization's pursuit of its goal by assisting decision-making
on resource allocation.

Long Answer Questions 5 Marks

1. Describe Management Information System and Accounting Information

System.

Ans: Management information system (MIS) may be a tool that helps the manager
in higher cognitive processes by recording, gathering, coordinating, dominant,
analysing, and visualizing info in a corporation. MIS is a computer-based system.
MIS aids the company, particularly managers, in organising and evaluating data and
information, as well as providing information in a timely and efficient manner. This
also aids managers in making choices based on the data and analysis provided by the
MIS.

Accounting Information System (AIS), like MIS, is a computer-based system that

allows a company to make critical financial decisions. An AIS will gather, process,
analyse, and store a company's financial data. And it will extract and disclose such
data to its users, such as accountants, consultants, financial officers, CFO, auditors,
government tax authorities, and so on, as called upon.

MIS works in making a piece of information for future use by providing its
accessibility to authorised persons whereas an accounting information system (AIS)
may be a system the helps the organization in grouping, gathering, storing,
managing, processing, consulting and retrieving accounting and monetary

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knowledge in order that the accountants, business analysts, consultants, chief money
officers (CFOs), managers, auditors, tax agencies, and regulators will use it for
higher cognitive process.

2. Why computerized accounting is needed?

Ans: The various needs of computerized accounting is as follows:

i. Large corporations need varied transactions in common place with high speed and
accuracy.

ii. Instant coverage of accounts is required for deciding computerised accounting to

give instant coverage of information.

iii. It needs a computer therefore reducing paper work.

iv. Making charts, graphs and tables instantly.

v. Accounting queries associated with some external parameters like client due are
often reported simply.

vi. Information is often unbroken confidential in an extremely secured system which

may solely be accessed by a licensed person solely.

vii. Its requirement stems from the advantages of increased speed, accuracy, and
decreased transaction costs.

viii. It also has the capacity to accurately and quickly record a huge number of
transactions. Because of its speed and precision, it provides for rapid and high-
quality reporting.

3. Define the various types of Management information system report.

Ans: The various types of Management information system report are:

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i. Summary report: It reports the whole summary of the corporate like profit and
loss account and balance sheet.

ii. Client and provider report: Report of individual client and provider relating to
sales and get account/ invoice, client reminder letters, purchase analysis.

iii. Demand report: it's ready on condition that management needs it like stock
valuation report, debt report.

iv. Exception report: Report like inventories, stock standing etc.

v. Management control reports: Budgets, cost centre reports, scenario reports, and
other tools will be used to keep track of operations.

4. Describe the various component of the computer system.

Ans: The Central Processing Unit, Input Devices, and Output Devices are the three
components of a computer system. Input devices send data to the processor, which
processes it and creates meaningful information for the user to see via output
devices.

The various components of computer system in details:

i. Input unit: Input unit is the device to computer file into the pc system like
keyboard, mouse, scanner, pen-drive, code and QR code scanner etc.

ii. Central process unit: it is the brain of the computer. It performs all the activities
within a computer like reworking knowledge into helpful info. It consists of 3 units
as management Unit Memory Unit Arithmetic Logic Unit (ALU).

iii. Output unit: once the info in the method by central process unit output is
accessible to the finished user by the help of hardware devices like monitor, printer
etc.

5. What are the roles of computer in accounting?

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Ans: The role of computer in accounting is as follows:

i. Recording transaction: It records daily transactions by either getting in it

manually or by the help of a code or QR code scanner. It in addition assigns
distinctive code to every account thus it'll merely be better-known.

ii. Preparing accounting documents: It prepares bills, cash memos, sales invoice
consumer vouchers etc. The manual method of documenting accounting transactions
necessitates the keeping of account books such as three journals, a casebook, special
purpose books, and a ledger, among others.

iii. Preparing budget: It transfers data into ledger automatically and prepares trial
balance, profit and loss account and record.

iv. Storing data: It stores data for future use into a knowledge base management
system. With computerised accounting, it is now easier to keep track of accounting
records.

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