5 Features of Computerized Accounting System

The process of accounting is now carried through a computerized system i.e. computers with the help of various accounting software. This process of accounting, with the help of computers, is termed a Computerized Accounting System. Records maintained in the computerized accounting system are exactly the same as maintained in the manual system i.e. Journal, Ledgers, Trial Balance, Trading Account, Profit and Loss Account, and Balance Sheet. The only difference is that, in the case of a computerized accounting system, all these records are maintained electronically with the help of accounting software. Following are the Features of Computerized Accounting System.

Features of Computerized Accounting System

The various distinctive features of computerized accounting system areas are listed below:

  1. It helps in the online recording and storing of accounting data.
  2. It helps in generating computerized purchase and sale invoices.
  3. All accounts and transactions are codified logically which means each transaction or account contains a specific code.
  4. It helps in the grouping of accounts from the very beginning.
  5. It provides reports quickly and instantly such as Stock Summary, Trial Balance, Trading and Profit and Loss Account, Balance Sheet, VAT Returns, etc.

Also, Read

Interest on Capital

Any interest paid on capital is considered as an expense and is shown in the Profit and Loss Account. Treatment of interest on capital in the final accounts is as follows.

Interest on Drawings

Treatment of interest on drawings in the final accounts is as follows. Firstly, interest in drawings is shown on the credit side of the Profit and Loss Account.

What is Operating Profit?

Operating Profit can be defined as the profit earned by carrying the normal business activities. It is computed by subtracting the operating expenses from the gross profit.

Balance Sheet

The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period

Profit and Loss Account

A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.

What are Adjusting Entries?

In order to incorporate adjustments in the financial statements, we pass the required Journal entries, which are termed as adjusting entries.

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