Theory question 104
Information Technology in Accounting4. (a) State four advantages that an accounting system can derive from the application of the computer. (b) List two outputs of the accounting information system.
Show the model answer
Model answer
(a) Any four: speed in processing and producing reports; accuracy of calculations; large volumes of data stored in little space; easy retrieval and updating of records; better information for decision-making (e.g. exception reports); reduces boring repetitive work and labour cost; improved security with passwords and backups.
(b) Any two: profit and loss accounts/income statements; balance sheets; cash flow statements; payroll; stock records; management reports; customers' statements.
Explanation
Advantages: speed, accuracy, storage, reports.