"Processing of accounting transactions through the use of hardware and software in order to produce accounting records and reports" is called ____________.

Computerized accounting system

The correct answer is option (2) : Computerized accounting system.

Computerised Accounting System refers to the processing of accounting transaction through the use of hardware and software in order to produce accounting records and reports. CAS takes accounting transactions as inputs that are processed through Accounting Software to generate the reports. The Computerized Accounting System (CAS) has the following components:

Procedure : A logical sequence of actions to perform a task.
Data : The raw fact (as input) for any business application.
People : Users.
Hardware : Computer, associated peripherals, and their network.
Software : System software and Application software.

These are the five pillars on which Computerized Accounting System rests.