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LESSON 3 - 1 Lesson3 The Impact of the Computer on...

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Lesson 3   The Impact of the Computer on Accounting Today, most accountants use computerized accounting systems to process accounting transactions. For example, Peachtree is a computerized accounting system that we teach at TCC in ACNT 1313. Even though computerized accounting systems, such as Peachtree, greatly facilitate accounting by automating the recording, summarizing and reporting of accounting data, these systems still require accountants to setup and operate them. For example, accountants must first configure the computerized accounting system to match their company’s Accounts before they can enter into the system the accounting transactions as they occur. Thus, accountants still need to know accounting concepts and GAAP, even though the tedious tracking of numbers and generating of reports, such as the Financial Statements, is handled by the computer. Prior to the 1960s, businesses performed their accounting manually, with accountants and bookkeepers recording their accounting transactions with “pen and pencil” in paper “books of account.” Beginning in the 1960s, computers became generally available, and the marriage of computers and accounting was one on the first uses of computers in business. The computers do what they do best: “number crunching” and efficient storage of vast quantities of data. The accountants and bookkeepers are freed from much of the laborious work previously required in manual accounting systems to do what they do best: design and configure the company’s accounting system; analyze accounting events to determine the accounts, timing, valuation to be used in recording each transaction, and determine the information that should be disclosed in the Financial Statements. The General Ledger In Lesson 2, you learned some of the Accounts that accountants and bookkeepers use in accounting systems: ASSETS - Example of Accounts used in this category: Cash Accounts Receivable Merchandise Inventories Supplies Prepaid Insurance Prepaid Rent Land Factory building Delivery truck Patents Copyrights LIABILITIES - Examples of Accounts in this category: Accounts Payable 1
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Rent Payable Notes Payable Bonds Payable Mortgages Payable STOCKHOLDER’S EQUITY – Examples of Accounts in this category: Current Stock Retained Earnings REVENUES – Examples of Accounts in this category: Service Revenue Sales (for example, sale of merchandise inventory) EXPENSES – Examples of Accounts in this category: Salary expense Rent expense The complete collection of all the Accounts that accountants establish for their company is called the General Ledger (also called the “ Chart of Accounts ” when just the titles of the accounts are listed; occasionally, also referred to as the “Book of Accounts”).
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