NIOS Class 10 Accountancy Chapter 16 Computers in Accounting

NIOS Class 10 Accountancy Chapter 16 Computers in Accounting Solutions to each chapter is provided in the list so that you can easily browse through different chapters NIOS Class 10 Accountancy Chapter 16 Computers in Accounting and select need one. NIOS Class 10 Accountancy Chapter 16 Computers in Accounting Question Answers Download PDF. NIOS Study Material of Class 10 Accountancy Notes Paper 224.

NIOS Class 10 Accountancy Chapter 16 Computers in Accounting

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Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 10 Accountancy Chapter 16 Computers in Accounting, NIOS Secondary Course Accountancy Solutions for All Chapters, You can practice these here.

Computers in Accounting

Chapter: 16

Intext Questions 16.1

Fill in the blanks with correct word/words: 

(i) Computer is a fast data __________ electronic machine. 

Ans: Processing.

(ii) All the computer operations are caused by _________ pulses and travels at the speed of light. 

Ans: Electrical.

(iii) A computer is free from __________ and lack of concentration. 

Ans: Tiredness.

(iv) Computers are being used as powerful __________ tools. 

Ans: Communication.

(v) The mostly used input devices are keyboard, __________ and scanner. 

Ans: Mouse.

(vi) Central Processing Unit is to computer, as the __________ is to human body.

Ans: Brain.

(vii) The commonly used output devices include __________ printer etc.

Ans: Monitor.

Intext Questions 16.2

Fill in the blanks with correct word/words: 

(i) Computer hardware and __________ need to be updated from time to time. 

Ans: Software.

(ii) The __________ cannot make a decision itself like human beings. 

Ans: Computer.

(iii) _______ requires a neat, clean and controlled temperature to work efficiently. 

Ans: Computer.

(iv) The most popular system of recording of accounting transactions is _______. 

Ans: Manual.

(v) Computerised accounting uses the concept of __________. 

Ans: Database.

(vi) Accounting ________ is used to implement computerised accounting.

Ans: Software.

Intext Questions 16.3

I. Fill in the blanks with correct words/words: 

(i) In a manual accounting system, transactions are recorded in the books of __________. 

Ans: Original entry.

(ii) The generation of ledger accounts is not a necessary condition for making __________ in a computerised accounting system. 

Ans: Trial balance.

(iii) The computerised accounting system if capable of handling __________ of transactions. 

Ans: Large number.

(iv) The __________ accounting system is capable of offering quick and quality reporting. 

Ans: Computerized.

(v) Computerised accounting system offers __________ facility to store transaction data. 

Ans: Online.

(vi) Computerised accounting system is ________ to the manual accounting system. 

Ans: Superior.

(vii) Computerised accounting is one of the ______ oriented applications. 

Ans: Database.


Multiple Choice Questions

(i) Which one is not the characteristic of a computer? 

(a) Speed. 

(b) Artificial Intelligence. 

(c) Storage. 

(d) Versatility. 

Ans: (b) Artificial Intelligence.

(ii) Central Processing Unit (CPU) does not include………… 

(a) Control Unit. 

(b) Memory Unit. 

(c) Arithmetic Logic Unit. 

(d) Output Unit. 

Ans: (d) Output Unit.

(iii) The main limitation of computer is……… 

(a) Speed. 

(b) Storage. 

(c) Self decision making not possible. 

(d) versatility. 

Ans: (c) Self decision making not possible.

(iv) Common accounting software is…….. 

(a) Tally. 

(b) Window. 

(c) Easy Books. 

(d) Credit Manager. 

Ans: (a) Tally.

(v) Which one is not the basic requirements of Computerised Accounting System? 

(a) Accounting framework. 

(b) Operating Procedure. 

(c) Well Organised database. 

(d) Bank account.

Ans: (d) Bank account.

Terminal Exercise

1. What is meant by a Computer?

Ans: Computer is an electronic device that can perform a variety of operations in accordance with a set of instructions called a program. It is a fast data processing electronic machine. It can provide solutions to all complicated situations. It accepts data from the user, converts the data into information and gives the desired result. 

2. State the characteristics of a Computer.

Ans: It possesses some characteristics, which are as follows: 

(i) Speed: It can access and process data millions times faster than humans can. It can store data and information in its memory, process them and produce the desired results. It is used essentially as a data processor. All the computer operations are caused by electrical pulses and travel at the speed of light. Most of the modern computers are capable of performing 100 million calculations per second. 

(ii) Storage: Computers have very large storage capacity. They have the capability of storing vast amount of data or information. Computers have huge capacity to store data in a very small physical space. Apart from storing information, today’s computers are also capable of storing pictures and sound in digital form. 

(iii) Accuracy: The accuracy of computer is very high and every calculation is performed with the same accuracy. Errors occur because of human beings rather than technological weakness; main sources of errors are wrong program by the user or inaccurate data. 

(iv) Diligence: A computer is free from tiredness and lack of concentration. Even if it has to do 10 million calculations, it will do even the last one with the same accuracy and speed as the first. 

(v) Versatility: Computer can perform wide range of jobs with speed, accuracy, and diligence. In any organisation, often it is the same computer that is used for diverse purposes such as accounting, playing games, preparing electric bills, sending E-mails and so on. 

(vi) Communication: Computers are being used as powerful communication tools. All the computers within an office are connected by cable and it is possible to communicate with others in the office through the network of computers. 

(vii) Processing Power: Computer has come a long way today. They began as mere prototypes at research laboratories and went on to help the business enterprises, and today, their reach is so extensive that they are used almost everywhere. In the course of this evolution, they have become faster, smaller, cheaper, more reliable and user friendly.

3. Explain the components of the computer.

Ans: The following are the Components of the computer:

(i) Input Unit: Input unit is controlling the various input devices which are used for entering data into the computer. The mostly used input devices are keyboard, mouse and scanner. Other such devices are magnetic tape, magnetic disk, light pen, barcode reader, smart card reader, etc.

(ii) Central processing units: The CPU is the control centre for a computer. It guides, directs and governs its performance. It is the brain of the computer. The main unit inside the computer is the Central Processing Unit. This is used to store program, photos, graphics, and data and obey the instructions in the program. It is divided into three subunits: i) Control Unit ii) Memory Unit and iii) Arithmetic Logic Unit (ALU). 

(a) Control Unit: Control Unit controls and coordinates the activities of all the components of the computer. 

(b) Memory Unit: This unit stores data before being actually processed. The data so stored is accessed and processed according to instructions which are also stored in the memory section of the computer well before such data is transmitted to the memory from input devices. 

(c) Arithmetic and Logic Unit: It is responsible for performing all the arithmetical calculations and computations such as addition, subtraction, division and multiplication. It also performs logical functions involving comparisons among variable and data items.

(iii) Output unit: After processing the data, it ensures the convertibility of output into human readable form that is understandable by the user. The commonly used output devices include monitor, plotter, printer, speaker, etc.

4. Explain the limitations of a computer.

Ans: The limitations of computers are due to the operating environment they work in. 

These limitations are given as below: 

(i) High Cost of Installation: Computer hardware and software need to be updated from time to time with availability of new versions. As a result heavy cost is incurred to purchase a new hardware and software every time there is a change in the existing version. 

(ii) High Cost of Training: To ensure efficient use of computers in accounting, new versions of hardware and software are introduced. This requires training and cost is incurred to train the personnel. 

(iii) Self Decision Making Not Possible: The computer cannot make decisions like human beings. It is to be guided by the user, and work only the way it is programmed to function. 

(iv) Costly Maintenance: Computers require to be maintained properly to help maintain its efficiency. It requires a neat, clean and controlled temperature to work efficiently which results in costly maintenance. 

(v) Dangers for Health: Extensive use of computers may lead to many health problems such as muscular pain, eyestrain, and backache, etc. This adversely affects working efficiency and increasing medical expenditure.

5. Explain the role of computers in accounting.

Ans: The role of computers in accounting are as follows:

(i) Data Entry and Storage: Computers facilitate the input and storage of financial data in digital formats, reducing the need for manual data entry and paper records. This includes recording transactions, invoices, receipts, and other financial documents.

(ii) Bookkeeping analysis and reporting: Computerised bookkeeping removes many of the paper “books” that are used to record the financial transactions of a business entity; instead, relational databases are used today, but typically, these still enforce the norms of bookkeeping including the single-entry and double-entry bookkeeping systems.

(iii) Financial Analysis and Reporting: Computers assist in generating various financial reports and statements, such as balance sheets, income statements, cash flow statements, and budget analyses. Accounting software can automatically compile data and generate these reports, providing insights into the financial health and performance of a business.

(iv) Auditing and compliance: Accounting software helps ensure compliance with regulatory requirements and auditing standards by maintaining accurate and transparent financial records. Auditors can access digital records easily, streamlining the auditing process and improving transparency.

(v) Automation of repetitive tasks: Automating repetitive tasks refers to the use of technology and software to perform tasks that are typically recurring and executed manually. The goal of automation is to streamline processes, increase efficiency, and reduce errors. Automation can be applied to a wide range of tasks, and achieved through various means.

6. Differentiate between manual accounting and computerised accounting systems.


BasisManual AccountingComputerised Accounting
(i) RecordingRecording of financial transactions is through books of original entry.Data content of these  transactions is stored in a well designed database.
(ii)  ClassificationTransactions recorded in the books of original entry are further classified by posting them into ledger accounts.No such data duplications are made. In order to produce ledger accounts the stored transaction data is processed to appear as  classified so that the same is presented in the form of a report. 
(iii) SummarisingTransactions are summarised to produce trial balance by ascertaining the balances of various accounts.The generation of ledger accounts  is not a necessary condition for preparation of Trial Balance. 
(iv) AdjustingAdjusting entries are made to adhere to the principle of matching.There is nothing like adjusting entries for errors and rectifications.
(v) Financial StatementsThe preparation of financial statements assumes availability of trial balance.The preparation of financial statements is independent of producing the trial balance.

7. Enumerate the basic requirements of any computerised accounting system.

Ans: The basic requirements of computerised accounting system are: 

(i) Accounting framework: It is the application environment of the computerised accounting system. A healthy accounting framework in terms of accounting principles, coding and grouping structure is a precondition for any computerised accounting system. 

(ii) Operating procedure: A well-conceived and designed operating procedure blended with suitable operating environment of the enterprise is necessary to work with the computerised accounting system. Computerised accounting is one of the database-oriented applications wherein the transaction data is stored in a well-organised database. The user operates on such a database using the required interface and also takes the required reports by suitable transformations of stored data into information.

8. Briefly explain the applications of computerised accounting.

Ans: Following are the applications of computers in accounting: 

(i) Preparation of accounting documents: Computers helps in preparing accounting documents like Cash memo, Bills, and Invoices etc, and preparing accounting vouchers. 

(ii) Recording of transactions: Everyday business transactions are recorded with the help of computer software. Logical scheme is implied for codification of accounts and transaction. Every account and transaction is assigned a unique code which put that account in a particular group. This process simplifies the work of recording the transactions. 

(iii) Preparation of Trial Balance and Financial Statements: After recording of transaction, the data is transferred into ledger accounts automatically by the computer. Trial balance is prepared by the computer to check accuracy of the records. With the help of the trial balance the computer can be programmed to prepare Trading and Profit and Loss Account and Balance Sheets.

9. Describe the stages of the transaction processing system.

Ans: The stages of the transaction processing system:

(i) Data Entry:

(a) In this stage, transaction data is entered into the system. This can be done manually by users or automatically through electronic means such as barcode scanners, RFID readers, or electronic data interchange (EDI) systems.

(b) The data entered at this stage should be accurate and complete to ensure the integrity of the transaction processing.

(ii) Validation and Verification:

(a) Once the data is entered into the system, it goes through validation and verification processes to ensure its accuracy, completeness, and consistency.

(b) Validation involves checking the data against predefined rules or criteria to ensure that it meets certain standards or requirements.

(c) Verification involves confirming the authenticity of the data, often through authentication mechanisms such as passwords or biometric scans.

(iii) Processing:

(a) In this stage, the validated and verified data is processed according to predefined business rules and logic.

(b) This may involve calculations, updates to databases, generation of reports, or other actions necessary to complete the transaction.

10. Why is computerised accounting needed? Explain. 

Ans: The need for computerized accounting arises from advantages of speed, accuracy and lower cost of handling the business transactions. These have been explained below: 

(i) Numerous transactions: The computerized accounting system is capable of handling large number of transactions with speed and accuracy. 

(ii) Instant reporting: The computerized accounting system is capable of offering quick and quality reporting because of its speed and accuracy. 

(iii) Reduction in paper work: A manual accounting system requires large physical storage space to keep accounting records/books and vouchers/ documents. The requirements of stationary and books of accounts along with vouchers and documents is directly dependent on the volume of transactions beyond a certain point. 

(iv) Flexible reporting: The reporting is flexible in computerized accounting system as compared to manual accounting system. The reports of a manual accounting system reveal balances of accounts on periodic basis while computerized accounting system is capable of generating reports of any balance as and when required and for any duration which is within the accounting period. 

(v) On-line facility: Computerized accounting system offers online facility to store and process transaction data so as to retrieve information to generate and view financial reports. 

(vi) Scalability: Computerized accounting systems are fully equipped with handling the growing transactions of a fast growing business enterprise. The requirement of additional manpower in Accounts department is restricted to only the data operators for storing additional vouchers. 

(vii) Accuracy: The information content of reports generated by the computerized accounting system is accurate and therefore quite reliable for decision making. In a manual accounting system the reports and information are likely to be distorted, inaccurate and therefore cannot be relied upon. 

(viii) Security: Under manual accounting system it is very difficult to secure such information because it is open to inspection by any one dealing with the books of accounts. However, in computerized accounting system only the authorized users are permitted to have access to accounting data. 

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