Micro Notes Chapter – 1 OVERVIEW OF COMPUTERISED ACCOUNTING SYSTEM

COMPUTERISED ACCOUNTING SYSTEM (CAS)
Meaning: System using computers & software to record, store, and analyse financial data.
Features: Simple & integrated, Accurate & speedy, Scalable / flexible, Transparent & controllable, Reliable.

COMPONENTS OF CAS (5 PILLARS)
Procedure: Logical sequence of accounting tasks. Data: Raw facts from source documents. People: Users (accountant, operator, manager). Hardware: Physical devices (CPU, monitor, printer). Software: System software (Windows) + Application software (Tally, Excel).

DATA vs INFORMATION
Data: Unprocessed raw facts (e.g., "₹25,000"). Information: Processed data with meaning (e.g., "Total sales = ₹5,00,000"). Process: Data → Processing → Information.

ACCOUNTING CYCLE IN CAS
Record transactions in journal, Post to ledger, Prepare Trial Balance, Pass adjusting entries, Prepare adjusted Trial Balance, Pass closing entries, Prepare Financial Statements.

GROUPING OF ACCOUNTS
Based on Accounting Equation: Assets = Liabilities + Capital + (Revenue – Expenses).
Major Groups: Assets (Fixed, Current), Liabilities (Secured loans, Creditors), Capital (Share capital, Reserves), Revenues (Direct, Indirect), Expenses (Direct, Indirect).

CODIFICATION OF ACCOUNTS
Need: Quick identification, saves space, speeds processing.
Methods: Sequential: Consecutive numbers/letters (CM001, CM002). Block: Ranges for groups (001‑500 = Direct Expenses). Mnemonic: Easy abbreviations (SLR = Salary, TVC = Thiruvananthapuram).

SECURITY FEATURES OF CAS
Password Security: Restricts unauthorised access. Data Audit: Tracks who made changes and when. Data Vault (Encryption): Scrambles data to prevent unauthorised reading.

MERITS AND DEMERITS OF CAS
Merits: Timely reports in desired format, Easy alteration of transactions, Effective control, Economical for large data, Maintains confidentiality.
Demerits: Faster technology obsolescence, Data loss due to power failure / virus, Risk of hacking / phishing, Cannot generate unprogrammed reports, High training cost.

ACCOUNTING INFORMATION SYSTEM (AIS) – SUB‑SYSTEMS
Cash & Bank, Sales & Accounts Receivable, Inventory, Purchase & Accounts Payable, Payroll, Fixed Assets, Expense Accounting, Tax Accounting, Final Accounts, Budget, Management Information System (MIS).

EXAM TIPS (Common 1‑Mark Questions)
Sequential code: CS101, CS102. Mnemonic code: TVC (Trivandrum), SLR (Salary). Block code: 100‑199 for Gents Wear. Not a component of CAS: Virus. Security feature that restricts access: Password.