Question

Give comparison between Manual Accounting Process and Computerized Accounting Process.

State the difference between Manual Accounting Process and Computerised Accounting Process.

Answer 1

Basis of Difference	Manual Accounting	Computerized Accounting
1. Meaning	Manual accounting is the system in which we maintain physical register of journal and ledger for keeping the records of each business transaction.	In this system of computerized accounting, we use computer and different accounting software for digital record of each business transactions.
2. Calculation make total of	In this system, all calculations are done manually. For example, to find the balance of any ledger account. We will make total of the debit and credit side and then we will find its difference for showing balance.	In computerized accounting system, our duty is to record the business transactions manually in the database. All the calculations are done by computer system. We need not calculate each account’s balance, it is calculated automatically by computerized accounting system.
3. Ledger Accounts	Ledger accounts are prepared by posting transactions in appropriate ledger manually with the help of journal. There may be mistakes while transferring the amount manually.	In computerized accounting system, once a voucher is entered it will automatically be printed. Thus there is no chance of taking or transferring wrong amount.
4. Trial Balance	In this system of accounting, we have to take the balances of all ledger A/c, in Trial Balance Statement.	Computerized accounting system will produce Trial Balance automatically.
5. Adjustment Entries Record	Both adjustment journal entries and its posting in the ledger accounts will be done manually one by one.	Only adjustment entries will be passed in the computerized accounting system, posting in the Ledger accounts will be done automatically.
6. Financial Statements	We have to make the financial statements manually by carefully transferring Trial Balance’s figures into Trading, Profit and Loss Account and Balance Sheet.	We need not prepare financial statement manually; financial statements will be generated automatically. It will also automatically change after each voucher entry in the system. This facility is not available in the manual accounting system.
7. Closing the Books	After the year end accountants prepare financial statements for the accounting period. The balances are to be carried forward manually, to next year.	In computerized accounting software financial reports are auto-generated for the accounting period. The balances are automatically carried forward to next year.