NCERT solutions class 11 Accountancy chapter 12 Applications of Computers in Accounting

NCERT Solutions for Class 11 Applications of Computers in Accounting are prepared by the subject experts at SimplyAcad. Students can take help from this solved set to understand the basics of concepts the chapter discusses. Having knowledge of computers is extremely important in accounting to maximise the effectiveness and efficiency of work. 

The NCERT Solutions given below will aid students in developing the computer skills essential for accounting. Scroll below to find the curated answers of short and long answer type questions.

NCERT Solutions For Class 11 Chapter 12 Applications of Computers in Accounting

Short Questions: Accountancy Solutions Class 11 Applications of Computers in Accounting

1. State the different elements of a computer system.

These 6 elements comprise a computer system.

1. Hardware: It consists of the physical modules that make up a computer. Examples are a Processor, Monitor, Keyboard, Mouse, etc. The primary function is to receive input commands.
2. Software: This refers to a set of programs that helps a computer perform basic tasks and commands as provided by the user. Two main categories of software are a) System software b) Application Software.
3. People: This element comprises individuals or users that communicate with the system by using software and hardware.
4. Data: The text, numbers and graphics are pieces of information and are known as data in computer parlance.
5. Procedures: These refer to those operations that are designed to be executed in an orderly manner to produce a desired result. It can be of three types: hardware-oriented, software oriented and internal.
6. Connectivity: The way in which a computer system gets connected with other devices like a phone, printer, modem, etc., by different technologies such as the Internet, Bluetooth or Wi-Fi is called connectivity.2. List the distinctive advantages of a computer system over a manual system.

The following are the advantages:

1. Accuracy
2. Storage capacity
3. High Speed
4. Versatility
5. Reliability
   
   3. Draw a block diagram showing the main components of a computer.
   4. Give three examples of a Transaction Processing System.

A computerised system that is useful in recording, processing, storing and validating routine transactions that take place in a business on a day-to-day basis is known as a transaction processing system. Some well-known examples are:

1. Payroll Applications: Such applications process transactions with the help of online and terminal processes. The most common uses of such systems are for payroll preparation or processing employee salary.
2. Order Processing: Here, orders get processed to proceed with invoicing, inventory control and account receivables. Order details are received by mail, phone calls or by manual input. This system is used worldwide for online booking of hotels, flights, etc.
3. ATM (Automated Teller Machine): These devices manage high-volume transactions using sophisticated technology.
   
   5. State the relationship between Information and Decision. 
   

An organisation comprises different types of units involved in decision-making. Every department takes individual decisions to attain the preferred common objectives of the organisation. An organisation needs to draft plans, set common targets and devise policies. All these events are established on the information (data) which is derived from past experience and anticipated future conditions. On the basis of such information, an organisation allocates resources and works towards achieving targets. Therefore, it can be said that information helps in decision-making, and previously taken decisions create a source of information in future.

6. What is Accounting Information System?

An information system that requires the collection, storage and processing of accounting and financial data that can be used by internal users to communicate information to shareholders and creditors. It uses the computer-based method for recording accounting information based on accounting principles. The information is recorded in such a way that it can be retrieved for decision-making by the internal management. It can include items such as a simple ledger to other complex items like costing and financial reports.

7. State the various essential features of an accounting report.

An accounting report should contain these essential features:

1. Relevance
2. Timeliness
3. Accuracy
4. Completeness
5. Conciseness8. Name three components of a Transaction Processing System.

Transaction processing system comprises of these three components:

1. Input: It consists of source documents, such as invoices and purchase orders, that act as inputs to the system.
2. Storage: The system stores the fed data in the portable storage system in the form of a hard disk.
3. Output: The data that is stored can be retrieved and used to study as and when such a need arises.
4. Give an example of the relationship between a Human Resource Information System and MIS.

MIS is an organised system that collects, processes, stores and disseminates data as information to help in decision-making. The function of HRIS is to maintain employee records and prepare documents related to salaries and wages payable to employees. In an organisation, HRIS supplies essential information related to employees, such as skills, qualifications, and experiences, and MIS utilises this information to take suitable decisions, such as which department to allot, promotion and increment of employees.

Long Questions for NCERT Accountancy Solutions Class 11 Applications of Computers in Accounting

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

An organisation comprises different types of units involved in decision-making. Every department takes individual decisions to achieve the desired shared objectives of the organisation. An organisation needs to draft plans, set common targets and devise policies. All such activities are based on the information (data) which is derived from past experience and anticipated future conditions. On the basis of such information, an administration assigns resources and works towards achieving targets. Therefore, it can be said that information helps in decision-making, and previously taken decisions create a source of information in future.

Transaction processing systems are an important part of business operations. They are involved in the processing of transactions of a business. The different processes involved are:

1. Collecting Data: The role of TPS is to collect data which may be in the form of manual entry, point-of-sale machines and scanners.
2. Editing Data: Checking the data for correctness and accuracy
3. Validation of Data: Verifying data and rectifying errors if detected.
4. Manipulating Data: Processing and analysing of data based on pre-designated design.
5. Storage of Data: The process of storing data so that it can be accessed anytime.
6. Report Generation: This involves creating reports and presenting data in a designated format which can either be hardcopy or softcopy.
7. Query Support: It refers to users of TPS who can raise a query and extract the same data to get meaningful reports.2. Explain, using examples, the relationship between the organisational MIS and the other functional information system in an organisation. Describe how AIS receives and provides information to other functional MIS.

MIS is an information system that generates and analyses reports to provide accurate and timely reports to management, which will be used to make decisions.

AIS is an information recording system that is maintained by a business for identifying, collecting, processing and generating information about a business organisation and presenting the same information to different users of the information.

AIS maintains a relationship with other information systems such as HRIS, Marketing Information Systems and Manufacturing Information Systems.

We know that an organisation has several departments for pursuing different types of functions to ensure the smooth functioning of the business. For example, AIS or accounting information system takes care of finance-related decisions, while the HR department is responsible for maintaining employee records and preparing payroll and salary structures for the employees. Similarly, qualifications, skills and experience are supplied by the HR department to be used by the manufacturing department and allot them accordingly.

Similarly, the manufacturing department prepares a list of items based on requirements, and the accounting department processes the order. Therefore, it can be seen that AIS has relations with all the departments of an organisation.

3. ‘An accounting report is an essential report which must be able to fulfil certain basic criteria.’ Explain? List the various types of accounting reports.

Data manipulated and processed in a way that is grasped by the user without any complexity becomes information. This information is further refined to create a report. Content and the report design depend upon the management level at which it gets submitted. Decisions are taken on the basis of the reports prepared. An accounting report must fulfil the following criteria:

1. Accuracy
2. Relevance
3. Completeness
4. Timeliness
5. Summarisation

The following types of reports are seen in accounting:

1. Demand Reports: These are the reports that are prepared on the management’s needs and requests. E.g., Money report.
2. Summary Reports: Reports which summarise the activities happening in an organisation. Example, Profit and Loss Account.
3. Customer/Supplier Reports: Reports prepared as issued by management detailing various information of suppliers. Example: Report of 5 best customers.
4. Responsibility Reports- Reports prepared by managers responsible for individual departments. For example, Purchase Manager submits a report regarding different aspects of the purchase.
5. Exception Reports: Reports prepared with a purpose containing conditions and exceptions. Inventory Status Report.
6. Describe the various elements of a computer system and explain the distinctive features of a computer system and manual system.

These 6 elements comprise a computer system:

1. Hardware: It consists of the physical modules that make up a computer. Examples are a Processor, Monitor, Keyboard, Mouse, etc. The primary function is to receive input commands.
2. Software: This refers to a set of programs that helps a computer perform basic tasks and commands as provided by the user. Two main categories of software are a) System software b) Application Software.
3. People: This element comprises individuals or users that communicate with the system by using software and hardware.
4. Data: The text, numbers and graphics are pieces of information and are known as data in computer parlance.
5. Procedures: These refer to those operations that are designed to be executed in an orderly manner to produce a desired result. It can be of three types: hardware-oriented, software oriented and internal.
6. Connectivity: The way in which a computer system gets connected with other devices like phones, printers, modems, etc., by different technologies such as the internet, Bluetooth or Wi-Fi is called connectivity.

Distinguishing features of computer and manual systems are:

1. Accuracy: Calculations and operations performed by a computer system are very accurate. Errors are detected due to wrong input of data or wrong commands by the user. In a manual system, the results created by humans are prone to more errors.
2. Speed: The computer performs calculations faster as compared to the human brain. It executes tasks in a faster way than a manual system.
3. Reliability: A Computer can work under any condition and are very reliable compared to human beings.
4. Versatility: The computer is created with the purpose of performing a variety of tasks simultaneously, whereas human beings cannot match that speed and versatility.
5. Storage: All computers have the storage capacity to store all the information, and this information can be accessed anytime, anywhere. In a manual system, the storage of documents is cumbersome and takes a long time.