Computer is Ed Accounting (2.2)

8/4/2019 Computer is Ed Accounting (2.2)

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INTRODUCTION OF ACCOUNTING

Operating Information

This is the information that is needed on a day-to-day basis in order for theorganization to conduct its business. Employees need to get paid, sales needto be tracked, the amounts owed to other organizations or individuals need

to be tracked, the amount of money the organization has needs to bemonitored, the amounts that customers owe the organization need to bechecked, any inventory needs to be accounted for: the list goes on and on.Operating information is what constitutes the greatest amount of accountinginformation and it provides the basis for the other two types of accountinginformation.


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Financial Accounting Information

This is the information that is used by managers, shareholders, banks,creditors, the government, the public, etc to make decisions involving theorganization and its operations. Shareholders want information about what

their investment is worth and whether they should buy or sell shares,bankers and other creditors want to know whether the organization has anability to pay back money lent, managers want to know how the company isdoing compared to other companies. This type of information would be verydifficult to extract if every company used a different system for recordingtheir financial position. Financialaccounting information is subject to a setof ground rules that dictate how the information is reported and this ensuresuniformity.Managerial Accounting Information

In order for the managers of a company to make the best decisions for acompany they need to have specific information prepared. They use thisinformation for three main management functions: planning, implementationand control. Financial information is used to set budgets, analyze differentoptions on a cost basis, modify plans as the need arises, and control andmonitor the work that is being done.As you can see, accounting is a multifaceted system involving different

people with different needs and after analyzing the various uses andapplications of accounting information the American AccountingAssociation has come up with this definition: the process of identifying,measuring, and communicating economic information to permit informed

judgments and decisions by users of the information.In order to facilitate the informed use of this financial information,accounting has come to be based on specified rules or conventions calledprinciples. These principles provide general laws or rules that are used toguide accounting activity and are called Generally Accepted AccountingPrinciples, or GAAP for short. These principles are established by theFinancial Accounting Standards Board (FASB) which is a nongovernmentalagency funded by the accounting profession and contributions from businessorganizations. While there is no legal obligation for companies to adhere toGAAP, there are strong practical reasons to do so. From auditing toreporting earning to the US Securities Exchange Commission to applying for


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a loan, there are very compelling reasons for organizations to conform to thegenerally accepted standard.

What is accounting?

Accounting is the art of recording, summarizing, reporting, and analyzingfinancial transactions. An accounting system can be a simple, utilitariancheck register, or, as with Microsoft Office Accounting, it can be acomplete record of all the activities of a business, providing details of

every aspect of the business, allowing the analysis of business trends, andproviding insight into future prospects.

Bookkeeping is the practice of recording transactions. Bookkeepers tend to

focus on the details, recording transactions in an efficient and organized

manner, and they may or may not see the overall picture.

Accountants use the work done by bookkeepers to produce and analyze

financial reports. Although accounting follows the same principles and rules

as bookkeeping, an accountant can design a system that will capture all ofthe details necessary to satisfy the needs of the business managerial,

financial reporting, projection, analysis, and tax reporting. A good

accountant will create a system of financial reporting that gives a complete

picture of a business.

By using Office Accounting, you can work with your accountant to set up

your accounting system to meet the needs of your business. You can then

enter transactions and generate reports all the bookkeeping tasks andsome accounting tasks, such as generating reports, that you might previously

have relegated to your accountant.

Recording, summarizing, reporting, and analyzing


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Recording transactions includes documenting revenues (by invoices or sales

receipts), and entering purchases (in the account payable account) and

expenditures (in the check register). Using Office Accounting, the small

business owner can move beyond daily recording to higher level accounting

tasks, such as recording sales orders, tracking prospective customers, and

projecting sales opportunities and cash flow.

Calculating and summarizing transactions in a traditional accounting system

is a tedious process. Microsoft Office Accounting frees you from these

repetitive tasks by calculating and summarizing hundreds or thousands of

individual transactions and generating reports to satisfy managerial,

governmental, investing, or banking needs. Based on a generally accepted

standard, these reports are powerful tools to help the business owner,accountant, banker, or investor analyze the results of their operations.

Double-entry accounting

Since the fifteenth century, when Luca Pacioli first wrote about the practice,

the term "accounting" has referred to double-entry accounting. Double-entry

accounting uses a system of accounts to categorize transactions. Each

transaction that is entered consists of one or more debits and credits, and thetotal debits must equal the total credits. For example, if you purchase a car

with a down payment of $1,000 and a loan from your bank for another

$14,000, the entries to record this transaction would be the following:

A debit of $15,000 to your fixed asset account named, for example,

"Vehicles."

A credit of $1,000 to your bank account for the down payment.

A credit to an Auto Loans account for $14,000.

The entries balance because the $15,000 debit is equal to the sum of the two

credits.


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It's all in how you look at it

If you're not a bookkeeper or an accountant, the whole system of debiting

certain accounts and crediting others can seem reversed. This is because

banking transactions have traditionally been described from the bank'sperspective. A credit from the bank will increase your checking account

balance on the bank's books. Bank accounts are assets on your books, so you

will record a debit (see the following table) to your checking account while

the bank records a credit to its liability account.

AccountType Normal Balance Debit Credit

Asset Debit Debits increase asset balances Credits decrease asset balances

Liability Credit Debits decrease liabilitybalances

Credits increase liability balances

Equity Credit Debits decrease equity balances Credits increase equity balances

Income Credit Debits decrease incomebalances

Credits increase income balances

Expense Debit Debits increase expensebalances

Credits decrease expensebalances

Types and Purposes of Accounting

1) Basic Accounting: Bookkeeping

The basis of all accounting is the books of account maintained by theenterprise. These books of account record monetary quantities associated

with the financial transactions of the enterprise. In modern accounting thesequantities are simultaneously recorded as debit and credit entries. For eachtransaction a debit entry is kept and an equal credit entry is kept so that totaldebits always equals total credits. This double entry system of keeping the

books has been of enduring usefulness. This system is vital to the day-to-dayoperations of any sizeable enterprise. In general the books of account recordreal cash flows into or from the enterprise or into or from various defined


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sub-enterprises. Some difficulties naturally arise when entries other than realcash flows are booked.

Retrospective cash flows are real, exact, and incontrovertible. Theirmagnitude is accurate to the penny and not subject to interpretation. Inaddition, their timing is real, exact, and incontrovertible. Magnitude andtiming are a matter of record.

The essential purpose of bookkeeping is to record real cash flows.

2)Tactical Management Accounting

Management has the responsibility for the overall operations of theenterprise and must have the appropriate information needed to make dailydecisions and take action. A primary basis for these decisions is informationobtained from the books of account. Quantitative and qualitative informationmay be also be obtained from the various sales, administrative, or

production systems. This information may be direct data, but more often is processed information, such as, summaries, differences, or ratios. Thismanagement information is often in the form of defined periodic computerreports that are used for the monitoring and control of daily operations. Theyare useful in identifying existing short-term problems and variances. Thistactical type of information is not aimed at measuring or creating futurevalue, but more in the direction of maintaining existing value.

The essential purpose of tactical management accounting is to monitor

actual versus expected performance.

3) Strategic Management Accounting

Management may request special reports or studies for the purpose ofidentifying and evaluating non-routine long-term risks or opportunities.Since these risks or opportunities are generally part of a changing ordifferent future, the usual retrospective reports of traditional accounting areinadequate. Planning may make use of traditional accounting informationand structures, but a prospective approach is required to plan effectively.


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The essential purpose of strategic management accounting is to evaluate

alternative futures.

4) Financial Accounting

In contrast to bookkeeping and management accounting, which are used forinternal purposes, financial accounting is primarily used to conveyinformation to interested parties outside of the enterprise. These partiesinclude the shareholders, creditors, customers, and suppliers. Each of these

parties has its own special interests and special information needs. There is,however, a great commonality of interest. Like management, these partiesare interested in the survival of the enterprise and in the efficient and

effective deployment and use of its resources. The shareholders are theprimary focus of financial accounting and financial reports.

In contrast to bookkeeping and management accounting, which are primarilydefined by the end-users, financial accounting has been defined by theaccounting profession. Principles of accounting are spelled out by theFinancial Accounting Standards Board (FASB). These principles areadhered to very closely by the accounting profession and by those whodepend on the opinions expressed by accounting professionals. This includesalmost all publicly traded companies in the United States. These accounting

principles are labeled Generally Accepted Accounting Principles (GAAP)and they are generally accepted and understood by the accounting

profession. They are less accepted and less understood by end-users.

The essential purpose of financial accounting should be to provide

shareholders with meaningful and useful information.

5) Responsibility AccountingJust as the overall authority and responsibility for a company rests with itschief executive, each manager within the company should have authorityand responsibility for his or her division or department. It is important tohave accounting systems that support and measure the activities of thatmanager. This is done by defining the unit (department, division, etc.) to be


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a profit center, often in the same manner that the entire enterprise is a profitcenter. In this way the accounting for the whole is the sum of the accountingfor the parts, but, more importantly, local actions are aligned with global(shareholder) interests. Hence, responsibility accounting is usually no moreeffective than more general accounting.

Each manager must be authorized and empowered to make decisions andeffect change, otherwise they are not managers. The goal of each managermust be to make the best decisions. To do this the manager must haveappropriate information and measures. Each manager must also beaccountable to the company and this requires measures of the managersactivities and results.

Responsibility accounting may be used as a basis for incentives. These may

be rewards or punishments to those who are empowered to make decisionsand effect change. Incentives, to be most effective, should be clearly linkedand immediately responsive to decisions and actions. This requires ameasurement system based on decisions and their future results. Themeasurement system must isolate the present cause and future effect. Thiscan not be accomplished with a retrospective accounting system.

The essential purpose of responsibility accounting is to provide local

goals and measures consistent with the companys global goals and

measures.

6) Tax Accounting

Tax accounting is often based on financial accounting, but there may besubstantial differences. The regulatory purpose of taxation is to provide adesired level of tax revenue. Tax accounting has borne the brunt of thechanging tax needs in the sense that accounting principles, rules, andmethodology, as opposed to tax rates, are often changed to generate thedesired tax revenues. It would be far easier to change tax rates than tocomplicate accounting to redefine taxable income. The companys goal is tominimize taxes and maximize after tax revenues within the constraints of taxaccounting. Tax accounting is the set of "rules of combat" in the never-ending battle over taxes.

The essential purpose of tax accounting is not accounting, but revenue.


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7) Regulatory AccountingVarious regulators prescribe accounting different from GAAP financialaccounting. These regulators may be state insurance regulators, through the

National Association of Insurance Commissioners (NAIC), who require the preparation and filing of quarterly and detailed annual statements forinsurance companies. They may be utility, bank, pension or securitiesregulators. This list is long. The SEC has filing requirements, similar toGAAP, for all publicly traded corporations. In general, regulation of anytype is accompanied by special accounting and reporting requirements.

The essential purpose of regulatory accounting varies, but there is a

great commonality of interests in the long-term survival of the company

and in its effective and efficient operation.

8) Merger and Acquisition Accounting

Generally this type of appraisal or value accounting is done only when a

company is to be acquired. This is very unfortunate since this type ofaccounting is the most meaningful, current, and accurate. It is mostmeaningful because it is customized for the situation and is designed to

provide the most relevant information. It is most current since it uses currentinformation and is not locked into old or artificial assumptions. It is mostaccurate because very detailed models are constructed to project actual cashflows. Often substantial resources (money, time, and personnel) areexpended to obtain a complete picture of the companys value, either as aseparate entity or as a merged operation. One important characteristic of

M&A valuations is that they attempt to capture all future values. Suchvaluations also use a realistic cost of capital to discount those future values.

A similar, but cruder type of valuation is employed by stock analysts toestablish a price or value of a companys shares.


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The essential purpose of M&A accounting is to measure potential value

added.

9) Value-Added Accounting

There are several types of value-added accounting. They all share a commonpurpose, i.e., they attempt to measure the shareholder value added to thecompany. They do this by subtracting the cost of capital, in some way, fromnet cash flows. This approach essentially treats the expense of borrowingcapital, whether equity or debt, like any other expense. The shareholder net

profit or value added is what remains.

One form of value-added management accounting is the EVA

TM

approach, aspopularized by G. Bennett Stewart, III, of Stern Stewart & Company. In thisform, value added is defined as adjusted traditional retrospective earningsless the total cost of capital. The adjustments to earnings include adding tonet operating profits any: preferred dividend, minority interest provision,debt interest expense after taxes and any increase in equity equivalents. Thislast item is somewhat troublesome since equity equivalents are designed to" gross up the standard accounting book value into something I calleconomic book value". If a true economic book value is produced then thetrue economic value added follows easily. The total cost of capital is based

on a weighted-average of debt and equity rates applied to the total capital.The cost of debt is generally well defined, but the cost of equity is moredifficult. It is based on a risk free rate plus four main risk components (with18 sub-components); operating risk, strategic risk, asset management risk,and size and diversity risk. The weighted-average cost of capital is thenapplied to the total capital. Again the debt portion of capital is well defined,

but the equity portion is not and must be obtained as a complex andquestionable adjustment to the traditional book value. There are substantial

benefits to the EVATM approach, but they are only available with very

careful development, as might be expected. EVA

TM

is not specificallydesigned as a financial reporting system. It is not easier than the AFTFapproach.

There are other approaches to value added and I mention them in passing.They are the free cash flow model, the dividends model, the abnormalearnings model, and the adjusted present value model. All these models, the


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EVATM model, and the AFTF model are generally equivalent, under certainconditions. See Appendix 8 for a comparison of EVATM and AFTF.

What is Bookkeeping?

Bookkeeping (also book-keeping orbook keeping) is the recording of allfinancial transactions undertaken by an individual or organization. Theorganization may be a business, a charitable organization or even a localsports club. Bookkeeping is "keeping records of what is bought, sold, owed,and owned; what money comes in, what goes out, and what is left." [1] Afinancial transaction is any event that involves money.

Individual and family bookkeeping involves keeping track of income andexpenses in a cash account record, checking account register, or savingsaccount passbook. Individuals who borrow or lend money also track howmuch they owe to others or are owed from others.

Bookkeeping may be performed using paper and a pen or pencil. Withincreasing complexity in tax regulations and to minimize calculation errors,many organizations use accounting software to assist in bookkeeping.

Two common bookkeeping methods used by businesses and otherorganizations are the single-entry bookkeeping system and the double-entry

bookkeeping system. Single-entry bookkeeping uses only income andexpense accounts, recorded primarily in a "Revenue and Expense Journal".Single-entry bookkeeping is adequate for many small businesses. Double-entry bookkeeping requires posting (recording) each transaction twice, usingdebits and credits.[2]

A bookkeeper (or book-keeper), sometimes called an accounting clerk in

the United States, is a person who records the day-to-day financialtransactions of an organization.[3] A bookkeeper is usually responsible forwriting up the "daybooks". The daybooks consist of purchase, sales, receiptsand payments. The bookkeeper is responsible for ensuring that alltransactions are recorded in the correct daybook, suppliers ledger, customerledger and general ledger. The bookkeeper brings the books to the trial
http://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Charitable_organizationhttp://en.wikipedia.org/wiki/Sports_clubhttp://en.wikipedia.org/wiki/Bookkeeping#_note-0%23_note-0http://en.wikipedia.org/wiki/Demand_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Accounting_softwarehttp://en.wikipedia.org/wiki/Single-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Accounthttp://en.wikipedia.org/wiki/Debits_and_creditshttp://en.wikipedia.org/wiki/Bookkeeping#_note-1%23_note-1http://en.wikipedia.org/wiki/Bookkeeping#_note-2%23_note-2http://en.wikipedia.org/wiki/Trial_balancehttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Charitable_organizationhttp://en.wikipedia.org/wiki/Sports_clubhttp://en.wikipedia.org/wiki/Bookkeeping#_note-0%23_note-0http://en.wikipedia.org/wiki/Demand_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Accounting_softwarehttp://en.wikipedia.org/wiki/Single-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Accounthttp://en.wikipedia.org/wiki/Debits_and_creditshttp://en.wikipedia.org/wiki/Bookkeeping#_note-1%23_note-1http://en.wikipedia.org/wiki/Bookkeeping#_note-2%23_note-2http://en.wikipedia.org/wiki/Trial_balance


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balance stage. An accountant may prepare theprofit and loss statement andbalance sheet using the trial balance and ledgers prepared by the bookkeeper.

TYPES OF BOOK-KEEPING

1) Single account bookkeeping

Simple bookkeeping for individuals and families involves recording income,expenses and current balance in a cash record book or a checking accountregister.

2) Single-entry bookkeeping

The primary bookkeeping record in single-entry bookkeeping is the Revenueand Expense Journal, which is similar to a checking account register butallocates the income and expenses to various income and expense accounts.Separate account records are maintained for petty cash, accounts payable

and receivable, and other relevant transactions such as inventory and travelexpenses.

3) Double-entry bookkeeping

4)Computerised bookkeeping

Computerised bookkeeping removes many of the "books" that are used torecord transactions and enforces double entry bookkeeping. Computersoftware increases the speed at which bookkeeping can be performed.

Online bookkeeping

Online bookkeeping allows source documents and data to reside in web- based applications which allow remote access for bookkeepers andaccountants. Typically, a company scans its business documents and uploadsthem to a secure location or into an online bookkeeping application on a
http://en.wikipedia.org/wiki/Trial_balancehttp://en.wikipedia.org/wiki/Accountanthttp://en.wikipedia.org/wiki/Profit_and_loss_statementhttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_systemhttp://en.wikipedia.org/wiki/Trial_balancehttp://en.wikipedia.org/wiki/Accountanthttp://en.wikipedia.org/wiki/Profit_and_loss_statementhttp://en.wikipedia.org/wiki/Balance_sheethttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Double-entry_bookkeeping_system


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regular basis. This allows the bookkeeper to work remotely with thesedocuments to update the books. Users of this technology include

mobile employees scanning and sending in their receipts and billswhile on the road to get reimbursed more quickly.

organizations with multiple offices centralizing their accountingdepartment and having the documents sent to this location online.

Examples of online bookkeeping software include SQL Ledger andQuickBooks.

Computerizedaccounting

Keeping accurate accounting records is a

vital part of managing an organisation.Apart from helping to keep it afloat

financially and legally, it is also a

requirement of funding bodies. Smaller

groups can usually manage with simple

book-keeping procedures but bigger

groups juggling with larger sums of money

and more complex financial transactions

may find their workload eased by using a

computerised accounting system. The

good news is that there are easy to use

and reasonably priced computerised

accounting packages on the market that

are either aimed at, or can be adapted to,

voluntary sector organisations.
http://en.wikipedia.org/wiki/SQL_Ledgerhttp://en.wikipedia.org/wiki/Quickbookshttp://en.wikipedia.org/wiki/SQL_Ledgerhttp://en.wikipedia.org/wiki/Quickbooks


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Should we computerise?

There are many reasons why it makes some sensefor both small and large voluntary organisations tocomputerise their accounting systems, the mainones being: HM Revenue & Customs1 can receivecomputerised tax and PAYE submissions; the Charity Commission is offering awards forannual accounts submitted online; and the range of software options available to suit

most needs and prices, with typical packages ataround 200.However, in spite of these compelling reasons,making the change over might not suit everybody.You will need to look carefully at your organization and see if the benefitsoutweigh the cost, time andtraining required to put the system into place.For example, if you only have one full-time employeeyou may have trouble finding the time to set up thesystem and transfer the information over.

The pros( Advantages)

A computerized accounting system has manybenefits, including:

improved reporting to funders many

projects have more than one funding source,each with specific and different requirements;

assisting with compliance with charityregulations e.g. SORP;

minimalising mathematical errors with


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computers doing the maths, errors are virtuallyeliminated (unless the data is keyed in improperlyin the first instance);

better record keeping whilst human errorcan still corrupt your data e.g. entering figures inwrong fields, a good package will reduce this

possibility and ensure that there is a referencefor all transactions e.g. for every cheque orreceipt entered/created. However, this does noteliminate all manual work. Vouchers, invoices,receipts etc. will still need to be filed in a logicalorder, and details of what was entered onto thesystem should also be recorded on paper. This

will help when you need to track errors, in theannual audit and if disaster strikes and you haveto re-enter all transactions;

saving time with fewer errors and thesoftware automatically generating reports, timewill be saved in the long run;

saving money even though there will be theimmediate cost of the software, you are

potentially saving the costs of unnecessary auditsas well as saving money through time saved.

The cons(Disadvantages)

need not every organisation needs acomputerised accounting system. For example, asmall organisation that only receives 200 amonth and has never had any difficulty with theway things are done, may not feel the need tocomputerise. In such situations the change overmay not be worth it;

money whilst the software isnt expensive for


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the benefits, some organisations just simply donot have the extra money. Aside from the initial

purchase there will also be regular softwareupdates and training to pay for. (Updates will varyin cost from package to package);

time changing over to a computerised system,ensuring it is implemented properly and trainingwill all require a time commitment.

Considering your needs

Voluntary organisations need different computerisedaccounting and finance packages from commercialorganisations because reporting and analysismethods for both are different. For instance,voluntary organisations often need to reportfinancial information to various stakeholder groupsin different formats. Also, the financial statementsfor voluntary organisations should disclose thevarious sources of incoming resources and how

these funds have been used in accordance withcharity accounting methods (i.e. SORP). Thecomputer accounting system you choose will haveto take these factors into account. Additionally, youmay want to consider the following when lookingat your needs: the ability to generate sales /raise invoices;

the need to calculate/include VAT in your

accounting;

cost (how much can your organisationrealistically afford on software, updates andsupport?);

the ability to process payroll (note: if considering


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payroll options, you may want to considerelectronic submission of PAYE to HMRC);

stock control.

Defining your expectations

It is essential that you talk to the staff who will beusing the software. Its important that their needs,along with the organisations, are met. They will also, likely, have the bestidea of the organisationsneeds from a financial and accounting standpoint.Ask them specifically what features they feel are

most important, e.g.what problems are theycurrently encountering? Do they hope to solvethese through computerisation? what will be thesystems primary use?

Choosing an accounting package

In order to help you deal with issues such as these

when choosing a package weve put together sometips to keep in mind.Weve also listed some of themost popular options currently available to thevoluntary sector.

Tips Do your research before buying.

Check the software websites and with the

distributor before buying to make sure that youhave the package you want and need. (seeConsidering your needs)

Look at each package and ascertain exactly howits features will help resolve your organisationsspecific issues, e.g. what flexibility is there in


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report formats, and/or what facilities are there toproduce reports to charity requirements?

Ask other organisations about packages they useand what they do and dont like about the system.

It is wiser to choose a package that is widely used,as it far more likely to have frequent updatesavailable for the package, more technical supportand more people familiar with it if and when youneed advice.

You will also want to check what kind of technicalsupport is offered with the package, as this will

always be needed at some stage. Some packagesoffer one year of support included in the price ofthe package, while others offer none.

Packages usually have to be upgraded on an annualbasis to reflect changes in tax, charity legislation etc.Check whether or not this is the case with the

package in question and how much an upgrade willcost. Sometimes these changes make beneficialimprovements, but at other times they just raisethe price with nothing really added. Try to find outwhat the upgrades on the packages you areconsidering give you. Make a shortlist of which packages best meet yourorganisations requirements.

List the pros and cons of the short listed packages.This is a good way to find out which package isright for you.

Dont be cheap. Dont choose a package justbecause its the cheapest, or its the one anotherorganisation recommended. Whilst these are

both very good points youll need to make yourchoice based on what the accounting softwarespecifically offers your organisation and


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your needs.

Try it out! Some packages offer trials, limitedperiodor limited-function uses. Its worth findingout whether or not the package you areconsidering can be tried and tested a good wayto making sure before buying.

See it in action. Many software companies havedemonstration days where you can see a

package in action, ask questions, find out featuresand speak to a representative for free. But, beaware that in the end they are trying to sell youthe package there and then do not feel

pressured and go to as many demonstrationsas you like.

Types of accounting softwarepackages

The following list features software packages thatare deemed to be the most popular in the voluntarysector, though there are many more on the market.

QuickBooks This will meet simplebook-keeping needs and is suitable for userswho are responsible for accounting but are nottrained accountants. Payroll support can beadded and it is possible to categorise costs andincome in two ways (i.e. customer job, and class)

which could be adapted quite easily for SORPrequirements. VAT rates can also be customised cost: around 200. A customised edition for UKnon-profit-making organisations is available withQB2005 (QuickBooks 2005 version) which hasadvanced budgeting, membership and donationtracking, and fund accounting features cost


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around 450.

Sage Sage Instantis a beginner accounting system,designed for users with limited accounting andIT experience. Features include double entry

book-keeping, invoicing, a link to your accountantand graphs to help you analyse your accounts However, being a basic

package there is no nonprofitversion available (see Sage Line 50).Packages start from 110.

Sage Line 50 used to be called Sage Sterling, isthe original Sage product, and is an all-purpose,

small business accounting solution. It comes inmany varieties Book-keeper, Accountant,Accountant Plus and Financial Controller. It allowsthe creation of a chart of accounts and there is areasonable report writer. However, the packageoffers very little scope for modification ortailoring. It has been popular with voluntaryorganisations because it offers specific charitytemplates. However, these frequently need to beaugmented with pre or post analysis of thefinancial information, either manually or in aspreadsheet.Sage provides an external link to its data sothat it can be accessed from a compatible spreadsheetor database. Packages start around 500.

Access Accounts Horizons this is aimed atmedium sized organisations with up to 10 users

being able to use it at one time.Though notdirectly designed for voluntary organisations acharity accounts production solution has been

produced, ensuring charity SORP compliance, withfull funds analysis and extensive annual report info.Packages start around 1,500.


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Cashcall originally developed for churches andused primarily by smaller organisations, the systemhandles fund accounting (i.e. accounting fordifferent streams of funding), budgeting, andanalysis but not VAT. The double entry bookkeepingconvention is visible and doesnt require

prior knowledge. 99 including 12 monthstechnical support.All the above are capable of dual currency (euro andsterling) functions.

Packages for Macs there are not as manyaccounting packages available for Macs, and none thathave templates or editions for the voluntary sector.

MYOB www.myob.co.uk/products/ has a variety ofaccounting software from low level accounting

basics to higher end. My Business (Mac version).


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Acknowledgement

We would like to thanks Principal Sir A.K

Lakdawala & Kamala Maam who has given usan opportunity to prepare this project. Also wewould like to thanks to Nasreen miss & otherteachers who given us a valuable guidelines &constantly evaluating our project time to time.Also we would like to thanks to our friends,

family & lastly a lot of thanks to God who helpus for preparing this project, without which thisproject cannot be possible.


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Group members

1) Nikhil shetty (group leader) roll no- 54

2) Naushil Maknojia roll no- 46

3) Nidal farooqui roll no- 42

4) Darshnil patel roll no- 51

5) Shoaib khan roll no- 43


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INDEX

Sr

No.

INDEX PAGE

NO.

1 Introduction of accounting 1-3

2 Meaning of accounting 3-5

3 Types &Purposes of accounting 5-11

4 Meaning of Book-keeping 11-12

5 Types of Book-keeping 12-13

6 Computerized Accounting 13-21


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BIBLIOGRAPHY

BOOKS

1) A Text Book of Book-keeping &Accountancy by L.NChopde.

WEBSITES

1) http://www.google.com

2) http://www.en.wikipedia.in
http://www.google.com/http://www.en.wikipedia.in/http://www.google.com/http://www.en.wikipedia.in/


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CONCLUSION

LASTLY, WE conclude that in past decades

people or businessmen write accounts in thebooks. It is the hand-written accounts. But dueto advanced technology people or businessmenmaintain accounts in the computer with the helpof special software. Now a day, all businessmenmaintain the records of their financial

transaction (accounts) in the computers with thehelp of specially designed software like Tallyetc.

Documents

Computer is Ed Accounting (2.2)