Hardware and Software Selection - Essay Example

Introduction Accounting is recognized in a system called double entry. This means every transaction gets the money value recorded twice. The process in the past was to record on paper. Today the recording is electronic. Purpose of accounting Accounting can be seen as being of two cycles (1) The processing cycle and (2) The reporting cycle. In the past the method was achieved by recording transactions in a journal and then transferring the information into areas called accounts (Smith J.M. Skousen K.F. Stice E.K.and J.J. 1995) .

It was necessary to ensure accuracy in the transfer process. We always thought of accounting activity in steps. The first step was to make a record based on time. This was referred to as journalizing a transaction. Next was the posting of the transactions. This was the moving of the information into grouping areas called accounts. It was then necessary to move to the reporting cycle. This meant making sure there were no errors. First there was a trial balance. It was a way of ensuring the values at the end of the period were equal.

This was called debits equal credits. The next step was to proceed with what saw called closing of the books. This process made it possible to create two main documents. First was the income statement the income statement told if the business made money or lost money was referred to as the processing cycle. Computer Technology Next came the impact of computer information systems. It became necessary to introduce a new concept. The new concept is called modules. The computer made it possible to avoid errors in the transfer process between cycles.

Today, many systems move the information immediately and automatically from recording to impact on the reporting result. The computer system is made up of five parts (O’Leary T.J. and L.L 2006).(1)People (2)procedures (3)Software (4)hardware (5)data. It is now possible for people to work in different segments of the accounting documentation because of the functional modules introduced. Some modules can be invoicing, accounts receivable accounts payable payroll general ledger. The type of business determines the level of complexity.

The emphasis here will have to be on people. We must consider who will be operating it and who will be using the output information. Next we turn to the software. This is the next in importance. This makes the hardware relevant. The software is of two types one is the system soft ware . The other is the application software. This application software is the part that is designed to produce the accounting activity. Conclusion The sharing of information between users is generally the same whether a paper or computer system is used.

The need for financial information is the same. The computer changes the way the information is gathered. It also significantly speeds up the reporting process. The reason is that the traditional errors are eliminated. References O’Leary T.J. and L.L (2006) Computing Essentials McGraw Hill, New York, NY 10020 Smith J.M. Skousen K.F. Stice E.K.and J.J. (1995) Intermediate Accounting South Western Publishing Cincinnati, Ohio