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Despite the tremendous capabilities of computers, one should not conclude that electronic systems are always better. As with any choice, the costs and benefits of each alternative should he weighed before the choice is made. The following key points should be considered when evaluating and comparing manual and electronic systems.
Dollar Costs
The costs of bookkeepers’ salaries and manual accounting records must be compared to the costs of computer hardware and software. Electronic systems also have some hidden costs that must be considered, such as computer training of personnel and (more…)

The procedures for posting the cash payments journal are similar to those for posting the cash receipts journal. Specifically, the amounts recorded in the Accounts Payable column are posted individually to the subsidiary ledger and in total to the control account. Purchase Discounts and Cash are posted only in total at the end of the month. When a transaction is recorded in the Other Accounts column, it is posted individually to the appropriate account(s) affected. No totals are posted for this column.
The posting of the cash payments journal is shown in Illustration 6-17. Note that the symbol CP is used as the posting reference for this journal. After postings are completed, the equality of the debit and credit balances in the general ledger should be determined. In addition, the control account balances should agree with the subsidiary ledger total balance.
Effects on General Journal (more…)

In a manual accounting system, each of the steps in the accounting cycle is performed by hand. For example, each accounting transaction is entered, manually in the journal and posted manually to the ledger. To obtain ledger account balances and to prepare a trial balance and financial statements, additional manual computations must be made. In this section, therefore, we discuss how the manual processing system can be more efficiently used to process accounting data.
At this point you might be wondering, “Why cover manual accounting system-is if the real world uses computerized systems?” First, small businesses still abound. Most of them begin operations with manual (or even “shoe box”) accounting systems and convert to computerized systems as the business grows. Second, to understand what computerized accounting systems do, you need to understand how manual accounting systems work. (more…)

Good accounting systems do not just happen. They are carefully planned, De- signed, installed, managed, and refined. Generally, developing an accounting, system involves the following four phases:
1. Analysis. The starting point of analysis is to determine the information needs-of internal and external users. Once this is established, the system analyst development of proceeds to identify the sources of the information and the records and pro- accounting system procedures for collecting and reporting the data. If an existing system is being analyzed, its strengths and weaknesses must be identified.
2. Design. For a new system, forms and documents must be designed; methods and procedures selected from alternatives, job descriptions prepared; con troll integrated; reports formatted; and equipment selected. Redesigning an existing system may involve only minor changes, a complete overhaul, or replacement of a manual system by a computerized system. (more…)