Q.Explain the components of a Computerised Accounting System.

A Computerised Accounting System is made up of five interdependent components, not the software alone.

A Computerised Accounting System is commonly described as being made up of five components, all of which must work together:

1. People (peopleware). The individuals who operate the system — data-entry operators, accountants, and the administrator who manages user access and permissions. The system's reliability depends heavily on how carefully these people enter and check data.
2. Procedure. The set of rules and instructions that determine how each type of transaction is to be recorded, who is authorised to create or approve a particular kind of voucher, and in what sequence tasks are carried out. A clear procedure keeps the system's output consistent regardless of who is operating it on a given day.
3. Data. The source documents — invoices, receipts, payment vouchers, bank statements and similar records — that supply the raw information entered into the system. Since the system can only process what it is given, accurate source data is essential; inaccurate input produces inaccurate accounts however capable the software is.
4. Hardware. The physical equipment the system runs on — the computer, printer, scanner, an uninterrupted power supply, and, where several people share the accounts, networking equipment.
5. Software. The accounting program itself, which contains the instructions that actually record, post, calculate and report on the data once it is entered through the hardware.

Each of these five components is necessary, and none is sufficient by itself — expensive software running on good hardware is still useless without trained people following a sound procedure and working from accurate source data. This is the point a full-length answer on this topic is expected to bring out, rather than simply listing the five terms.

Reducing the components to just 'hardware and software' and ignoring People, Procedure and Data, which are equally essential and frequently the ones an examiner is specifically probing for.