NCERT Solutions for Class 11 Accountancy Applications of Computers in Accounting [Old Book]

NCERT
SOLUTIONS
CLASS - 11th

aglase .co

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Class : 11th

Subject : Accountancy

Chapter : 12

Chapter Name : Applications of Computers in Accounting

Q1 State the different elements of a computer system.

Answer. A computer system is a combination of six elements :

➔ Hardware
➔ Software
➔ People
➔ Procedures
➔ Data
➔ Connectivity

Q2 List the distinctive advantages of a computer system over manual system.

Answer. The advantages of a computer system over manual system are as follows :

➔ Speed
➔ Accuracy
➔ Reliability
➔ Versatility
➔ Storage

Q3 Draw a block diagram showing the main components of a computer.

Page 1 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Answer.

Q4 Give three examples of a transaction processing system.

Answer. Three examples of transaction processing system are :

➔ Automated Teller Machine (ATM)
➔ Departmental stores
➔ Order and payroll processing

Q5 State the relationship between information and decision.

Answer. Data when processed becomes information. When the related information is
summarized to meet a particular need, it is called as a report. The content and the design of the
report is expected to vary depending upon the level to which it is submitted and decision to be
made on the basis of the report. A report must be effective and efficient to the user and should
substantiate the decision making process.

Page 2 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Q6 What is Accounting Information System?

Answer. Accounting Information System (AIS) identifies, collects, processes and communicates
economic information about an entity to a wide variety of users. Such information is organized in
a manner that correct decisions can be based on it. Every accounting system is essentially a
part of the AIS which in turn is a part of the broader system, the organisation’s Management
Information System.

Q7 State the various essential features of an accounting report.

Answer. The following are the essential features of an accounting report :
➔ Relevance
➔ Timeliness
➔ Accuracy
➔ Completeness
➔ Summarization

Q8 Name three components of a Transaction Processing System.

Answer. The three components of Transaction Processing System are :

➔ Accept the complete transaction data as input
➔ Store the data in computer storage media
➔ Retrieve the data for processing as and when required for generating accounting report
as output.

Page 3 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Q9 Give example of the relationship between a Human Resource Information System and MIS.

Answer. The manufacturing department receives the list of workers from the Human Resource
Department. It sends the details of the production achieved by the workers on the basis of which
the HR department to the finance and accounts department to pay the wages. The details of the
wages paid and statutory dues are also send by the F&A department to the production
department also to the HR to monitor the performance of workers. The HR department
communicates to the other departments about the good/bad performance on the basis decision
on various operational matters may be taken.

Q1 ‘An organisation is a collection of interdependent decision-making units that exists to pursue
organizational organisational objectives’. In the light of this statement, explain the relationship
between information and decisions. Also explain the role of Transaction Processing System in
facilitating the decision making process in business organisations.

Answer. Data when processed becomes information. When the related information is
summarized to meet a particular need, it is called as a report. The content and the design of the
report is expected to vary depending upon the level to which it is submitted and decision to be
made on the basis of the report. A report must be effective and efficient to the user and should
substantiate the decision making process.

Transaction Processing Systems (TPS) are among the earliest computerized systems catering
to the requirements of large business enterprises. The purpose of TPS is record, record,
process, validate and store transactions that occur in the various functional areas of a business
for subsequent retrieval and usage. A transaction could be internal or external. When a
department requisitions material supplies from stores, an internal transaction is said to have
occurred.

Page : 478 , Block Name : Long Answers

Page 4 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Q2 Explain, using examples, the relationship between the organizational MIS and the other
functional information system in an organization. Describe how AIS receives and provides
information to other functional MIS.

Answer. The relationship between Accounting Information System, Manufacturing Information
System and Human Resource Information System. - The manufacturing department receives
the list of workers from the Human Resource (HR) department. It sends the details of production
achieved by the workers on the basis of which the HR department to the finance and accounts
(F&A) department to pay the wages. The details of the wages paid and statutory dues are also
sent by the F & A department to the production department also to the HR department to
monitor the performance of workers. The HR department communicates to the other
departments about the good/bad performance on the basis decision on various operational
matters may be taken.

Business process in the production department may involve activities like, preparation of plans
and schedules, issues of material requisition forms and job cards, issue of inventory, handling
invoices, etc. The accounting sub-system transaction cycle would therefore include the
processing of purchase orders, advance to suppliers/vendors, inventory status updation,
account payable, etc. All of this information has to be shared with the other MIS in the
organization.

The computerized accounting system as a sub component of the accounting information system
transforms financial data into meaningful information and communicates the information to the
decision-makers. The report demanded may be routine or specific ones.

Page : 478 , Block Name : Long Answers

Q3 ‘An accounting report is essential a report which must be able to fulfill certain basic criteria’.
Explain. List the various types of accounting reports.

Answer. Data when processed becomes information. When the related information is
summarised to meet a particular need, it is called as a report. The content and design of the
report is expected to vary depending upon the level to which it is submitted and decision to be
made on the basis of the report. A report must be effective and efficient to the user and should
substantiate the decision- making process. Akin to any report, every accounting report must be
able to fulfill the following criteria:

➔ Relevance
➔ Timeliness
➔ Accuracy
➔ Completeness

Page 5 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

➔ Summarization

The accounting reports generated by the accounting software may be either routine reports or
on the specific requirements of the user. MIS reports can be of the following types :

➔ Summary reports
➔ Demand reports
➔ Customer/supplier reports
➔ Exception reports
➔ Responsibility reports

Page : 478 , Block Name : Long Answers

Q4 Describe various elements of a computer system and explain the distinctive features of a
computer system and manual system.

Answer. A computer system is a combination of six elements :

Hardware : Hardware of a computer consists of physical components such as keyboard, mouse,
monitor and processor. These are electronic and electromechanical components.

Software : a set of programmes, which is used to work with such hardware is called its software.
A coded set of instructions stored in the form of circuits is called firmware.

People : people interacting with computers are also called love=ware of the computer, they
constitute the most important part of the computer system – system analysts, and operators.

Procedures : procedure means series of operations in a certain order or manner to achieve
desired results. There are three types of procedure which constitute part of computer system :
hardware-oriented, software-oriented and internal procedure.

Data : These are facts and may consist of numbers, text, etc. These are gathered and entered
into a computer system. The computer system in turn stores, retrieves, classifies, organizes,
and synthesizes the data to produce information according to predetermined instructions.

Connectivity : The manner in which a particular computer system is connected to others say
through telephone lines, microwave transmission, satellite link, etc. is the element of
connectivity.

Page : 478 , Block Name : Long Answers

Page 6 of 7 Aglasem Schools

Book Name : Accountancy-II Ncert Solutions | Chapter-12 Accountancy

Page 7 of 7 Aglasem Schools