Logout Open In App
Open In App
Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Chapter 1: AB-13SE (page 36)

Ned Timmons, engineer, is considering using a computerized accounting system for his professional engineering business. Ned has asked that you help him understand the components of a computerized accounting information system by answering the following questions:

Requirements

1. What are the two basic components of a computerized accounting information system?

2. Provide examples of each component.

3. If Ned were interested in an entry-level software system, what software might you recommend?

Short Answer

Expert verified

Two Components – Hardware and Software

Example of hardware – Monitor, Keyboard, Mouse, etc.

Examples of software – Operating system, Antivirus, etc.

Recommended entry-level software – QuickBooks

Step by step solution

Achieve better grades quicker with Premium

  • Unlimited AI interaction
  • Study offline
  • Say goodbye to ads
  • Export flashcards
Start your free trial Skip

Over 22 million students worldwide already upgrade their learning with Vaia!

01

Basic components of computerized accounting

The two basic components of computerized accounting are as follows –

a) Hardware: - hardware is the component that can be seen and touched. It is also fragile in nature and can be broken. Hardware is like a body to the computerized system.

b) Software: - Software is the component that runs in the backend process and can not be seen or touched. Software is a predetermined program that makes the computer run. All the instructions and processing are done through software.

02

Examples of each component

a) Hardware –

Monitor

Printer

Mouse

Keyboard

CPU etc.

b) Software –

Operating System

Applications based Programs

Firewall

Antivirus etc.

03

Recommended software for Ned

There are two levels of software for the computerized accounting system. They are –

i) Entry Level Software

ii) ERP System

Entry Level Software is used by a small business that has a limited volume of transactions and requires an economic system. On the other hand, Enterprise Resource Planning (ERP) is a customized solution for large and big organizations.

In the given case as Ned is interested in entry-level software, the most recommended software would be QuickBooks. This is so because QuickBooks is the latest entry-level software that is used on large scale and is easy to install and run. It also requires less time to learn the software. The complexity is also lower as compared to other entry-level software.

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first year of operations, and the stockholders want to know how well each business came out at the end of the year. Neither business kept complete accounting records, and no dividends were paid. The businesses throw together the data shown on the next page at year-end: \( 23,000 8,000 35,000 22,000 \) 10,000 6,000 44,000 9,000 Total Assets Common Stock Total Revenues Total Expenses Greg’s Tunes: Sal’s Silly Songs: Total Liabilities Common Stock Total Expenses Net Income To gain information for evaluating the businesses, the stockholders ask you several questions. For each answer, you must show your work to convince the stockholders that you know what you are talking about. Requirements 3. Which business has more stockholders’ equity at the end of the year?

Identifying users of accounting information For each user of accounting information, identify if the user would use financial accounting or managerial accounting. a. investor e. controller b. banker f. stockholder c. IRS g. human resources director d. manager of the business h. creditor

What are the steps used when analyzing a business transaction?

Which concept states that accounting information should be complete, neutral, and free from material error?

Abby Perry recently opened her own law office on December 1, which she operates as a corporation. The name of the new entity is Abby Perry, Attorney. Perry experienced the following events during the organizing phase of the new business and its first month of operation, December 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business. Dec. 1 Sold personal investment in Nike stock, which she had owned for several years, receiving \(30,000 cash. 2 Deposited the \)30,000 cash from the sale of the Nike stock in her personal bank account. 3 Deposited \(89,000 cash in a new business bank account titled Abby Perry, Attorney. The business issued common stock to Perry. 5 Paid \)600 cash for ink cartridges for the printer. 7 Purchased computer for the law office, agreeing to pay the account, \(8,000, within three months. 9 Received \)2,900 cash from customers for services rendered. 15 Received bill from The Lawyer for magazine subscription, \(300. (Use Miscellaneous Expense account.) 23 Finished court hearings on behalf of a client and submitted a bill for legal services, \)8,000, on account. 28 Paid bill from The Lawyer. 30 Paid utilities, \(900. 31 Received \)2,800 cash from clients billed on Dec. 23. 31 Cash dividends of $3,000 were paid to stockholders. Requirements 1. Analyze the effects of the preceding events on the accounting equation of Abby Perry, Attorney. Use a format similar to Exhibit 1-6. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet. d. Statement of cash flows.
See all solutions

Recommended explanations on Business Studies Textbooks

International Business

Read Explanation

Business Case Studies

Read Explanation

Introduction to Business

Read Explanation

Business Development

Read Explanation

Nature of Business

Read Explanation

Sales in Business

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free