Manual vs Computerized Accounting - 1225 Words

Manual versus Computerized Accounting Ever since Lucas Pacioli wrote about and spread the knowledge of double entry accounting in his â€Å"Summa di Arithemetica† in 1494, modern manual accounting was born (Hendrickson, 2007), though manual accounting has existed in many forms since ancient times. In contrast, computerized accounting systems are a more modern invention, as the first computer was invented between 1943 and 1946 (â€Å"Great Events in Accounting amp; Business History†, (n.d.)) and Arthur Anderson first computerized the payroll of General Electric in 1953 (â€Å"Great Events in Accounting amp; Business History†, (n.d.)). Powerful personal computers were not readily available to the average person until the 1980’s and 1990’s. Manual†¦show more content†¦Computerized accounting systems have advantages. They can increase the speed and efficiency of the accounting process and can be less labor intensive owing to the automation of many functions like journalization a nd calculation. Performing the summation of all the individual transactions entered is automated and printing financial statements from the data is quick and easy. Although there may be data entry errors, these may be easier to find in a computerized system, and there should be no transcription error as the computer performs the transcription for you. Computerized accounting systems, since they can easily handle large numbers of transactions with ease, are more practical for large companies with a large volume of transactions. Lastly, one advantage I’ve seen with computerized accounting is the generation of financial statements at any time during the accounting cycle, if you wish to do this. With manual accounting, this is labor and time intensive and impractical. Computerized accounting systems are not without their disadvantages, though. For example, many small businesses don’t have a lot of start-up capital and most computerized accounting systems are somewhat cost-prohibitive for them. They are dependent upon computers with all the attendant problems that can come with that – power outages, viruses, data security, and computer fraud. I believe, as well, that theShow MoreRelatedComputerized vs. Manual Accounting1630 Words   |  7 PagesPrepared For : Mr. Nelson Title: | Computerized Accounting should completely replaces Manual AccountingPrepared By : Ali H. Al-MuslimID#: 200628620Section# : 05SN#: 02Group#:01Word Count:1,333 | 10/7/2012 10/7/2012 Table of Contents Table of Contents II Introduction 3 I. Manual Accounting 4 A. Benefits 4 1. Cost effective 4 2. Availability 4 B. Limitations 4 1. Finding Errors 4 2. Time Factor 5 II. Computerized Accounting 5 A. Benefits 5 1. 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