NCERT Solutions for Class 11 Accountancy Chapter 12 Applications of Computers in Accounting

Ans : A computer system is mainly composed of the following six elements. 
(1) Hardware- It includes all the physical components of a computer such as, keyboard, mouse, monitor, processor, etc. These can be touched and a user inputs commands through them. 


(2) Software- It is referred to a set of the programs that enables a computer to perform its tasks or commands given by the user. There are following six types of software. Operating System Utility Programs Application Software Language Processors System Software Connectivity Software


(3) People- It constitutes the most important part of a computer system. It basically refers to the individuals or the users who interact with the computer through the use of hardware and software. The following are the people who are involved in a computer system. System Analysts Operators Programmers 


(4) Procedures- A series of operations that are executed in a certain manner in order to achieve a desired set of results is known as 'Procedures'. There are mainly following three types of procedures. Hardware-oriented Procedures Software-oriented Procedures Internal Procedures (5) Data- The facts that are gathered and entered into a computer system is known as 'Data'. It may comprise of numbers, text, graphics, etc. 


(6) Connectivity- This refers to the manner, in which a computer system is connected to the other electronic devices through telephone lines, microwave transmission, satellite link, etc., is known as 'Connectivity'. 

Ans : The following are some of the distinctive advantages of a computer system over a manual system. High speed Accuracy Reliability Versatility Storage 

Ans : Transaction Processing System (TPS) refers to a computerised system that records, processes, validates and stores routine transactions that occur in various functional areas of a business on daily basis. Some of the examples of Transaction Processing System are enlisted as: 
(1) Automatic Teller Machine (ATMs)- These are those machines that handle the bank transactions through the use of specialised computer programs. 
(2) Payroll Applications- These are the applications that help to execute payroll programs using terminal and online processing. These are commonly used for preparing payroll or salary of the employees. 
(3) Order Processing- With the help of TPS applications, orders are collected from clients either manually or through mails and telephonic calls. Thereafter, these orders are processed to initiate invoicing, account receivables and inventory control processing. These are now-a-days widely used in almost every spheres of business, such as online purchasing of tickets, online booking, etc 

Ans : An organisation consists of various interdependent decision making units at every level of management and department. All these separate departments take decisions for their respective fields to achieve the desired common organisational objectives. The organisation as a whole needs to set its targets, draft plans and formulate various policies. These activities are based on the information (in form of data) regarding the past experiences and expected future conditions. It is on the basis of this information that an organisation allocates its resources and attempts to accomplish its determined targets. Thus, it can be said that on one hand, information facilitates the decision making process while on the other hand, decisions took in the past acts as a pool of information in the future. 

Ans : An Accounting Information System (A'S) is a system that identifies, collects, processes, summarises, generates and presents information about a business organisation to a wide variety of users. It provides relevant information by processing voluminous accounting data, which is beyond the human capabilities. It provides a glimpse of various organisational activities and maintains a detailed financial record. It acts as a common pool of information from which different departments such as, production department, sales and marketing department, HR department, etc. can fetch useful and relevant information. The information thus provided, helps the users to take their decisions rationally and accordingly formulate their plans and policies. Thus, it can be said that an efficient AIS enhances the effectiveness and efficacy of an organisation as a whole. The below mentioned points highlight the important characteristics of AIS. 
(1) It helps in handling the huge volume of accounting and financial transactions of an organisation. 
(2) It helps in drafting future plans and accordingly setting the future objectives. 
(3) It acts as a common pool for providing information to different departments besides accounts and finance departments. 
(4) It helps in maintaining the accounting information as per the guidelines laid down by the Law. 
(5) It helps in meeting the informational needs by generating reports for both external accounting users (investors,  creditors, etc.) as well as for the internal accounting users (management, shareholders, etc.)