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1.1 Introduction chapter one and computer
- 1. YOHANNIS F. Department OfAccounting &Finance College Of Business & Economics Jimma University 10/05/25 1 Yohannis F.
- 2. 2 Accounting Software Application Course Code:AcFn3182 10/05/25 Yohannis F.
- 3. 3 Accounting Software Application Course Code:AcFn3182 10/05/25 Yohannis F.
- 4. JIMMA UNIVERSITY BUSINESS ANDECONOMICS COLLEGE DEPARTMENT OF ACCOUNTING AND FINANCE COURSE PLAN Course Information Course Number AcFn3182 Course Title Accounting Software Application Degree Program BA Degree in Accounting and Finance Lecturer Tesfaye G. (MSc) ETCTS Credits 3 Contact Hours (per week) 2 4 Course Description The course is designed to provide students with an understanding of the main features of common computerized accounting software packages. 10/05/25 Yohannis F.
- 5. Course Objectives Theobjective of this course is to provide an appropriate level of knowledge to students with a major in accounting, with an emphasis on the technical and practical applications of the basic Peachtree accounting. After successfully completing this course, the students should be able to: • Understand how common accounting software process business transactions; including the account structure of a typical computerized General Ledger. • Be capable of implementing double entry accounting in a computerized environment, including producing standard reports and final accounts including adjustments • Develop the skills necessary to process transactions for service, merchandising, nonprofit, and manufacturing businesses using common accounting software. • Prepare financial statements and complete financial statement analysis using common accounting software. 5 10/05/25 Yohannis F.
- 6. Course Contents Chapter One:Computerized Accounting System: Introduction • Computers – Nature, Components, and Data Representations • Accounting as Data Processing System • Manual Vs Computerized Accounting Systems • Selection of Accounting Software • Peachtree Accounting Software-Introduction 6 10/05/25 Yohannis F.
- 7. Cont…. Chapter Two:Installing Peachtree Software • Introduction • Installing Peachtree Software Chapter Three: Basic Peachtree Overview • Introduction • Starting The Program • Create a New Company • Working in Peachtree • Open a Company • Close Peachtree 7 10/05/25 Yohannis F.
- 8. Cont…. Chapter Four:File Setup • Overview • Setting Up Chart of Accounts • Setting Up Customers • Setting Up Vendors • Setting Up Inventory • Setting Up Payroll • Maintain Global Options • User Security • Back Up Data, Restoring Data and Year-End Wizard 8 10/05/25 Yohannis F.
- 9. Cont…. Chapter Five:Transactions • Sales and Accounts Receivable (Customers Transactions) • Purchases and Accounts Payable (Venders Transactions) • Cash Receipts • Cash Disbursements • General Journal • Payroll Processing Chapter Six: Reports • Financial Statements and Other Reports 9 10/05/25 Yohannis F.
- 10. Responsibilities • Students areexpected to attend all class sessions and to actively participate in class discussions. • Class participation involves being regularly engaged in the instructions and making a positive contribution by asking thoughtful questions, sharing relevant experiences, requesting clarification and making comments. • All forms of participation should be conducted in a manner that is respectful of fellow class participants. • In addition, students are always expected to come to class with all materials that will be given by the instructor and excises should be completed independently. • Also you are expected to read materials prior to class and ask questions. 10 10/05/25 Yohannis F.
- 11. Grading Policy Thefinal grade for the course will be based on the following: Continuous Assessment (Practical Activity) 60% Written Exam: 40% Total 100% Reference • Peachtree accounting help • User’s Guide Peachtree® by Sage 2007/2010 • Anders and et al Micro Computer Accounting: Tutorial and Applications, 3rd Ed. 2000 11 10/05/25 Yohannis F.
- 12. 12 CHAPTER ONE COMPUTERIZED ACCOUNTINGSYSTEM: INTRODUCTION Topics to be covered: Computers – nature, components and data representation; Accounting as a data processing system; Manual Vs computerized accounting system; Selection of accounting software; Determining the computing platform In-house Vs off-the-shelve-packages Selection criteria for off-the-shelve packages Determining system requirements and installation of packages 10/05/25 Yohannis F.
- 13. 13 1.1 Computers –Nature, Components, and Data Representations Today, computers are used in almost all fields of life’s endeavour. Computer application softwares are developed to help humanity perform tasks with much ease. What is computer? A computer can simply be defined as an electronic device that can accept data, store it, process the data and is capable of giving output (result). 10/05/25 Yohannis F.
- 14. Components of computer -It can be classified as: 1. Hardware • Input Devices: input devices are used to enter data or commands into the computer. E.g: keyboard, the mouse, and scanner. • Storage Devices: These are used for data storage these include primary (internal) and secondary (external) memories. Internal memories are RAM and ROM where as external memories include hard disks, floppy, CD, ROM, magnetic tapes, etc. • Output Devices: As indicated, the result of processing is output. Output can be shown on the monitor, it can be printed on paper, and/or it can be stored on disk or other media. • Therefore, the most common output devices can be monitor and printer. 14 10/05/25 Yohannis F.
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- 16. Cont… • System software:Controls the computer’s hardware. • It manages the computer’s resources and makes the hardware respond the user’s needs. • System software includes the operating system, language translators and utility programs. • Application software: It is a task specific software. • If you want to keep the books for a company, you use a program such as Peachtree Accounting to enter information regarding business transactions and to produce financial reports. • To do financial forecasting and perform “what if” scenarios, spreadsheet program will be used. 16 10/05/25 Yohannis F.
- 17. 17 1.2. Accounting asData Processing System Accounting is the process of identifying, classifying, sorting, recording, summarizing, and reporting the results of business transactions. Different data processing mechanisms may be used such as: (i)Manual system (ii)Mechanical data processing; and (iii)Automated or electronic data processing (ADP or EDP) 10/05/25 Yohannis F.
- 18. Manual dataprocessing • The data is processed manually without the use of any electronic device or machine. • The process is slow and less reliable, with the chances of errors being high. • Require a large manpower, depending on the data that is required for processing. Mechanical data processing • The data is processed by using very simple devices like a type writer or calculator. • When compared to manual data processing is more reliable and time saving. However, the output can still be very limited. Automated or Electronic data processing • This method is fast, reliable and accurate. • Computers are used to process data in electronic data processing. • The manpower required is minimal. • The processing is error-free. Processing of a large amount of data with high accuracy is possible only with electronic data processing. • The electronic data processing system is computerized and is designed to improve quality and maximize productivity 18 10/05/25 Yohannis F.
- 19. 19 …continued In general, dataprocessing involves converting a raw data into an output as shown: Input (Raw data) Processing Output Master records - Invoice processing - Employees’ check Invoices - Payroll check writing - Inventory balance Standards/policies - Data entry and - Processed Payroll data recording records Sales invoice (this involves the use of - Financial Source documents journals, ledgers, trial statements and balance, etc) other processed data 10/05/25 Yohannis F.
- 20. 20 1.3. Manual VsComputerized Accounting Systems In general, an accounting system includes the processes and procedures by which an organization’s financial information is received, registered, recorded, handled, processed, stored, reported, and disposed of. Ω Manual accounting system is an accounting system that performs data processing manually. (It will be cost effective only for small firms) Ω On the other hand, computerized accounting makes use of computers to handle raw data, manipulate the data, and report the results quickly and accurately. 10/05/25 Yohannis F.
- 21. 21 Advantages of computerized accountingsystem It enables to handle complex and large transactions easily; It increases efficiency, accuracy, speed, and timeliness; It reduces cost in relation to record keeping (cost per transaction) It handles large volume of data; It enables efficient storage, computation, retrieval, and auditability; 10/05/25 Yohannis F.
- 22. 22 Disadvantage of computerized accountingsystem High initial cost investment to plan, install, test, and implement the computer system properly; Thus, it may not be cost-effective for small firms with lesser volume of data to process Initial implementation may be time taking; It requires specialized skill; Slow acceptance may there be by employees, clients, creditors, and auditors. 10/05/25 Yohannis F.
- 23. 23 1.4. Selection ofAccounting Software Should a firm develop its own accounting software or buy in externally supplied software? 10/05/25 Yohannis F.
- 24. 24 …continued In-house software involvesa software that is developed by the firm internally considering the needs of the firm. Advantages of in-house software development include: It is ‘customized’; Assurance of system compatibility; Less training cost and implementation time 10/05/25 Yohannis F.
- 25. 25 …continued Off-the-shelve accounting packagesare accounting software that are acquired from an independent vendor. Advantages of such off-the-shelve accounting packages include: Low risk; Lower cost; Shorter implementation time; Standardization; Avoidance of an in-house effort 10/05/25 Yohannis F.
- 26. 26 …continued Commonly supplied accountingsoftware include: Peachtree* QuickBooks; ACCPAC(Acct Package); EXACT; The Sun; FAS(Fixed Asset System); OMICRON; 10/05/25 Yohannis F.
- 27. 27 How to selectoff-the-shelve accounting packages? Different selection criterion may be used to acquire an off-the-shelve accounting packages; such as: Reliability; Compatibility; Security; Flexibility; Extent of training required; Maintenance. 10/05/25 Yohannis F.
- 28. Peachtree Accounting Software Peachtree is the most complete, powerful and fully integrated accounting system. It combines marketing and personal information in order to provide with necessary tools to efficiently control of business operation. It is an accounting software package developed to do the work of an accountant. 28 10/05/25 Yohannis F.
- 29. Usefulness of Peachtree Peachtreehelps in the preparation of financial statements It helps in the analysis of financials records/statements It helps in the preparation of bank reconciliation statements It helps in backing-up company’s (financial) information 29 10/05/25 Yohannis F.
- 30. Usefulness of Peachtree Itprovides information security (unauthorized access) for data stored by it It serves as a reliable source (databank) of the company’s information It helps the management in decision making with ease It keeps track of the company’s stock Peachtree allows direct sending of e-mails to customers, vendors, and creditors etc 30 10/05/25 Yohannis F.
- 31. Advantages of Peachtree It makes the work of an accountant easy It saves time It provides accurate and efficient analysis and interpretation of financial statements when data is correctly entered It generates financial reports automatically It prepares payroll automatically It facilitates accounts reconciliation for the company Peachtree gives the accountant the good reputation of accuracy, efficiency, and effectiveness Also, in terms of certification, Peachtree boosts your profile, enhances your chance of getting a job as an accountant, it increases your marketing value, sustains your relevance as an accountant in the world of finance and many other benefits. 31 10/05/25 Yohannis F.
- 32. 32 1.5. Determining SystemRequirements and Installation of Packages This involves determining computer specific hardware requirement the selected software would require: such as memory capacity, speed, etc. For example to install Peachtree accounting, the following hardware requirements are needed: A minimum Pentium processor of 150 MHZ; RAM: 32 MB or 64 MB (or more); Microsoft windows 95, windows 98, windows 2000; Hard disk with a minimum of 158 MB free space; Microsoft excel software installed. If multiple users exist to access company data, networked computers are also required. 10/05/25 Yohannis F.