Which of the following refers to the components of Computerised Accounting System?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Business transactions are analysed, transactions recorded, prepare trial balance, preparation of balance sheet and profit and loss account.
The manual system of accounting is traditionally most popular method of keeping records of financial transactions of an organisation. Financial statements are the end products of the accounting process, which are prepared in accordance with Generally Accepted Accounting Principles (GAAP). The accounting cycle means the processes involved in identifying, measuring and communicating the information. The basic phases of the cycle are as follows:
• Business transactions are analysed.
• The transactions are recorded in the journal.
• Journal entries are posted to the ledger accounts.
• A trial balance is prepared from balances of accounts.
• Accounts are reviewed and the necessary adjustments made.
• Adjustments are posted in the ledger to prepare adjusted trial balance.
• Adjusted trial balance is used to prepare the balance sheet and profit and loss account.
• Financial Statements are prepared from the finally adjusted ledger and balancing the accounts.
The above accounting cycle can be processed through the use of computers.