Q.What do you mean by a Computerised Accounting System?

A computerised accounting system uses computer hardware and software to carry out the accounting work — recording, posting and reporting — that would otherwise be done by hand.

Once a voucher (a sales invoice, a purchase bill, a receipt) is entered into the software, the postings to the relevant ledger accounts, the balancing of those accounts, the extraction of a trial balance and the preparation of the financial statements are all carried out by the software itself, without the user having to repeat the arithmetic by hand.

A Computerised Accounting System (CAS) is a system in which computer hardware and accounting software are used to perform the entire accounting cycle — recording transactions, posting them to the correct ledger accounts, balancing the ledgers, extracting a trial balance, and preparing the financial statements — instead of carrying out these steps by hand in physical books.

In a manual system, an accountant must first journalise a transaction, then post it separately to each affected ledger account, balance every account at the end of the period, copy the balances into a trial balance, and finally use that trial balance to prepare the trading account, profit and loss account and balance sheet — each stage being a fresh, error-prone piece of manual work. In a computerised system, the user enters the transaction only once, as a voucher, and the software automatically performs every one of the remaining steps: it posts to both the debit and credit ledger accounts simultaneously, keeps a running balance for every account, and can generate a trial balance or a full set of financial statements at any moment, not only at the end of a period.

This does not change the underlying principles of accounting — the rules of debit and credit, and the accounting equation, remain exactly the same. What changes is the mechanism: repetitive manual calculation and posting is replaced by software that performs these mechanical steps quickly and without arithmetic error, leaving the accountant free to focus on reviewing, interpreting and using the resulting figures.

Students often describe CAS merely as 'accounting done on a computer' without mentioning that the software performs the posting and reporting automatically — the definition must bring out that the mechanical steps of the accounting cycle are automated, not just that a computer is somehow involved. Another common slip is implying that computerisation changes the rules of accounting itself; it only changes the mechanism of applying those rules.