Preview

Manual vs Computerized Accounting

Better Essays
Open Document
Open Document
1216 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Manual vs Computerized Accounting
Manual versus Computerized Accounting

Ever since Lucas Pacioli wrote about and spread the knowledge of double entry accounting in his “Summa di Arithemetica” in 1494, modern manual accounting was born (Hendrickson, 2007), though manual accounting has existed in many forms since ancient times. In contrast, computerized accounting systems are a more modern invention, as the first computer was invented between 1943 and 1946 (“Great Events in Accounting & Business History”, (n.d.)) and Arthur Anderson first computerized the payroll of General Electric in 1953 (“Great Events in Accounting & Business History”, (n.d.)). Powerful personal computers were not readily available to the average person until the 1980’s and 1990’s. Manual accounting, for the purposes of this paper, is the completion of the accounting cycle by hand without the use of a computerized accounting system. The accounting cycle for manual accounting is the process by which companies produce their financial statements for a specific period (Horngren & Harrison, 2007). Typically, in a manual accounting cycle the following steps are taken: Analysis of transactions, journalizing entries, posting to the ledger, preparing an unadjusted trial balance, preparing a worksheet, preparing financial statements, adjusting the ledger accounts and posting adjusting journal entries, closing the temporary accounts (posting and journalizing the closing entries), preparing a post-closing trail balance, preparing and posting optional reversing entries, and interpreting the accounting information (Yacht, 2008, p. 42). The financial statements derived from manual accounting are the summation of many individual transactions performed by hand and kept, usually in paper form, in journals and ledgers. Many small businesses use manual accounting and manual accounting has its advantages. From my experience managing a small business, performing the accounting cycle manually gives the manager or owner of the

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Fontinelle, A. (2011, March 2). Introduction To Accounting Information Systems. Retrieved May 26, 2015, from http://www.investopedia.com/articles/professionaleducation/11/accounting-information-systems.asp…

    • 580 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Acc 340 Wk 1 Individual

    • 823 Words
    • 4 Pages

    Accounting technology is not new, and has been a part of calculating and tracking numbers throughout time. From Leonardo da Vinci who designed a device he labeled the “Codex Madrid” number machine to Blaise Pascal who invented the first early calculator to William Burroughs who created the first adding machine, those who specialized in numbers have sought ways of making the tasks of their profession or hobby much simpler. As time passed, more creations emerged to help accountants perform their expertise more accurately and faster. The first computer was built midway through the twentieth century. For the nearly 50 years that followed, huge computers designed to perform the simple task of calculating mathematical equations were eventually scaled down to fit on top of desks in consumers’ homes and offices. The world of accounting went from manually inputting data into a ledger to using electronic spreadsheets that eliminated the need for ledgers, calculators, pencils, and adding machines. Out with the hardcopy and in with the software.…

    • 823 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Acc205 Final Paper

    • 1287 Words
    • 6 Pages

    As already mentioned, accounting is by no means a new practice. Archeologists have revealed that early civilizations used forms of accounting in their societies. (Accounting History Page, n.d.) One of humanities most crucial periods of progress in history, the renaissance, saw the advent of more complex accounting systems created by Luca Paciolli. After the renaissance, accounting continued to progress and advance. During the tremendous stock market crash of 1929 and subsequent Great Depression gave rise to more complex and standardized accounting procedures. These new procedures grew ever more complex, requiring organizations to possess more staff that were better trained, and more knowledgeable than before. Still, there was only so much that humans and paper alone could accomplish. Indeed this all changed with the introduction of the personal computer and information technology to the workplace. Modern organizations have been profoundly changed as a result. Accounting in practice has many facets, payroll, inventory, taxes, money accounts, and liabilities… just to name a…

    • 1287 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Ais Attacks and Failures

    • 1768 Words
    • 8 Pages

    * Your company has always used manual accounting. And now you feel need to have accurate and fast flow of information.…

    • 1768 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    Final Exam Study Guide

    • 5809 Words
    • 24 Pages

    Accounting 211 Study Guide for Final Exam Chapters 7 – 12 Chapter 7: 1. Terminology Accounting information system People, records, and methods that collect and process data from transactions and events, organize them in useful forms, and communicate results to decision makers Accounts payable ledger Subsidiary ledger listing individual creditor (supplier) accounts Accounts receivable ledger Subsidiary ledger listing individual customer accounts. Batch processing Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or month. Cash disbursements journal Special journal normally used to record all payments of cash; also called cash payments journal Cash receipts journal Special journal normally used to record all receipts of cash.…

    • 5809 Words
    • 24 Pages
    Powerful Essays
  • Good Essays

    The accounting cycle is a systematic process used to help perform the basic function of accounting, which is to identify, record, and communicate information. A business or organization may have its own unique way of performing its accounting cycle, but each must perform the task in one way or another. Alvarez Bookkeeping Services, a small family operated business, has a very simplified version of the accounting cycle. The company was established in 1971 and is located in Flushing, NY. The company is consists of four employees this includes the owner. One person, the owner, performs the entire accounting cycle for the Alvarez Bookkeeping Services. Gradually, the accounting cycle has evolved much like business have evolved; the multiple steps have been reduced as technology has simplified the process, “today, most companies use accounting software that processes many of these steps simultaneously” (Averkamp, n.d., para. 3).…

    • 774 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    M1: Compare the benefits of using manual and computerised accounting system to record business transactions.…

    • 1460 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    The new implemented accounting information system is only as good as the information entered into the database as per company requirements. While the primary purpose of the new system was to reduce time and money, the implementation of the new system, however ended up in an avoidable lapse in judgment by the management and the employees. All financial transactions have three main requirements to ensure proper accounting of business operations: timeliness, accuracy, and validity. If these transactions failed to meet these guidelines, information entered into the software* will lead to improperly prepared reports and a total system failure.…

    • 1287 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Mohammad Farooq Ali Tarafder* Abstract: This paper aims at describing the role of Fra Luca Bartolomeo de Pacioli (sometimes Paciolo) in the development of Modern Accounting. Key Words: Luca Pacioli, Double Entry Accounting and Renaissance.…

    • 1684 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    The program keeps all data organized and in a centralized location” (Shanker, 2015). Eliminating much of the need for manually entering transactions means that larger businesses can use fewer accounting professionals and/or use those people for self-auditing, investigating, or other activities that they would have little time for if they needed to enter and calculate everything by hand. In addition, new accounting software has helped to minimize human error and installed checks and balances that otherwise wouldn’t have been in place. These benefits for medium and large companies are clear, but there are significant changes that apply to small businesses as well. There are a variety of sophisticated accounting software programs available for low cost. These programs allow business owners and managers with minimal accounting knowledge to do the lion’s share of accounting for a company. In the past a small business owner would have to spend a great deal of time managing their books or employ an accountant or firm to take care of it. New technology allows these same owners to do the work themselves without sacrificing their ability to perform other tasks. So, in a nutshell, this technology allows companies to me more efficient and productive with fewer errors in the…

    • 762 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    assignment 1

    • 346 Words
    • 2 Pages

    First method is ‘immediate write- off’, which leads to consuming of shareholders’ equity and changeable of rate-of-return measures. With this method, goodwill will remain in the pre-regulation period. Second method is ‘systematic write- off’, which is regularly written off over a limited period. This method is also called amortization that is under AAS 18 and AASB 1013. The third method is ‘ad- hoc write- off’, which can be called as impairment under AASB 136. This method is permanent and can remain unlimited in the balance sheet unless evidence shows its value has been reduced.…

    • 346 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Syllabus

    • 4445 Words
    • 18 Pages

    More Than a Numbers Game: A Brief History of Accounting by Thomas A King, Wiley, 2006…

    • 4445 Words
    • 18 Pages
    Powerful Essays
  • Good Essays

    The chosen quote for my prayer experience is “Prayer is a plant the seed of which is sown in the heart of every Christian, but its growth entirely depends on the care we take to nourish it.” addressed by Catherine McCauley. Some key values that are given from this quote include: reflection, challenge, care, competence and compassion. These key values represent McCauley’s quote because she believes that our connection with God will only develop if we challenge ourselves to show care and compassion to others as we are competent to do so. Reflecting on our actions will ensure us to follow this.…

    • 611 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Database Exercise

    • 751 Words
    • 4 Pages

    The output part of the accounting cycle is extremely important because the information must meet certain guidelines. Because external financial statements are used by a variety of people in a variety of ways, financial accounting has common rules known as accounting standards and as generally accepted accounting principles (GAAP) (Price, 2010). In order to meet such expectations the input (sales invoices, payroll time card, etc.) and Transaction Processing (journals, ledgers, trial balances) that proceed the output part of the accounting cycle must be accurate. Having a manager check the data inputted in the database versus the sales invoices, payroll cards, and other inputted data is a good way to ensure that the output will be accurate.…

    • 751 Words
    • 4 Pages
    Good Essays
  • Good Essays

    History of Accounting

    • 720 Words
    • 3 Pages

    Accounting has a history that is usually discussed in terms of one seminal event- the invention and dissemination of the double entry bookkeeping processes. Paul Garner and Atsuo Tsuji (1995) report that the first printed treatise of bookkeeping in the world is the Summa de Arithemetica, Geometria, Proportioni et Proportionalita written by Luca Pacioli. The treatise was published in Venice in 1494, and was reprinted at Toscolano in 1523. This work is one of the most important books on mathematics and has had an enormous impact on the field of accounting ever since. The Treatise 11 of Section 9 of this book – that is, “particulars de Coputis et Scripturis,” is a treatise about double entry bookkeeping.…

    • 720 Words
    • 3 Pages
    Good Essays