Introduction to Computerized Accounting

Computerized accounting is what most businesses use for their finances.

Almost every company and organization does computerized accounting in some way. Companies can choose from among several options in accounting programs. Some are easy to use, while others are more complicated.

Transactions

When a transaction occurs, an entry is posted in the accounting system. An accountant posts the transaction to the accounts chosen and a record is kept in the system of all accounts and balances at all times.

Accounts Payables and Receivables

A computerized accounting system records all accounts payables and receivables. At any time, a company can view amounts owed to people and amounts owed to the company.

Reconciliation

A computerized accounting program is used for recording all checks written and all deposits made. An accountant posts all checks into the system and records all deposits. At the end of each month when the bank statement arrives, the accountants performs a bank account reconciliation which balances the account out.

Financial Statements

A computerized accounting system contains all of a company's financial statements. At the end of each month, managers request financial statements and an accountant easily generates these reports using the computerized accounting system.

References

• Businesstown: Components of the Accounting System
• The CPA Journal: The Changing Landscape of Computerized Accounting