A computerized accounting system is a software-based solution designed to automate and

streamline various financial accounting tasks within an organization. It utilizes computer

technology to store, process, and manage financial data, providing accurate and efficient record-
keeping and reporting capabilities. The major components of a computerized accounting system
include:
1. General Ledger: The central component that stores all financial transactions and account
balances. It serves as the foundation for generating financial statements and reports.
2. Chart of Accounts: A hierarchical list of all accounts used by the organization to classify
financial transactions. It provides a systematic structure for organizing and categorizing
various financial activities.
3. Accounts Payable: Manages the organization's liabilities by tracking and recording vendor
invoices, managing payment schedules, and generating reports on outstanding payables.
4. Accounts Receivable: Tracks and manages customer invoices, payments, and outstanding
receivables. It helps monitor cash flow and facilitates efficient collection processes.
5. Inventory Management: Tracks the organization's inventory levels, purchases, sales, and
cost of goods sold. It helps in managing stock levels, reordering, and inventory valuation.
6. Financial Reporting: Generates various financial statements such as balance sheets,
income statements, cash flow statements, and trial balances. These reports provide
insights into the financial health and performance of the organization.
Now, let's discuss coding logic and codes required for computerized financial accounting. In a
computerized accounting system, coding logic refers to the set of rules and guidelines followed
to assign codes to various financial transactions and accounts. This coding enables efficient
data organization and retrieval. The specific codes required may vary depending on the system
and organization, but here are some common types of codes used in computerized financial
accounting:
1. Account Codes: These codes are assigned to different accounts in the chart of accounts.
Each account is uniquely identified by a code, such as "100" for Cash, "200" for Accounts
Receivable, or "500" for Sales.
2. Transaction Codes: These codes represent specific types of financial transactions, such
as "DR" for debit, "CR" for credit, "INV" for invoice, "PYM" for payment, etc. These codes
help identify the nature and purpose of each transaction.
3. Cost Center Codes: In organizations with multiple departments or cost centers, specific
codes may be assigned to each department for cost allocation and tracking purposes.
4. Tax Codes: These codes indicate different tax rates or tax categories applicable to
financial transactions. They help in accurate tax calculation and reporting.
5. Product or Service Codes: If the organization deals with multiple products or services,
codes may be assigned to each item for inventory management and sales tracking.
6. Project Codes: In project-based accounting, codes may be used to identify and track
transactions related to specific projects or initiatives.
These codes are typically defined and customized within the computerized accounting software
based on the organization's specific needs and requirements. They help ensure consistency,
accuracy, and efficient processing of financial data within the system.