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A firm is maintaining its acccounts manually and has decided to shiflt to computerised accounting .It has purchasedcomputer and also Tally software to maintain the accounts. The chief accountatn has asked his team not to prepare the chart of accounts.According to him it is not required and appropriatedecision will be taken at the time fo preparing financial statements. You are required to appraise his decision and give your opinion |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :The decision of <a href="https://interviewquestions.tuteehub.com/tag/thechief-3192953" style="font-weight:bold;" target="_blank" title="Click to know more about THECHIEF">THECHIEF</a> <a href="https://interviewquestions.tuteehub.com/tag/accountant-5219" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTANT">ACCOUNTANT</a> is not correct . Chart of accounts is na imp[ortant document under computerised environment.It is the document which shows the <br/> decision as to how the financial statement s shall be prepared i.e which accounts <br/>shall form part of the profit and <a href="https://interviewquestions.tuteehub.com/tag/loss-1079380" style="font-weight:bold;" target="_blank" title="Click to know more about LOSS">LOSS</a> account and which shall be part of the balance sheet . besides it shows under which group varuous accounts are clubbed .At the time of recording a transaction, on the basisi of account codes given in the chart of <br/> Accounts , transaction is posted to the defined account, grouped under defined group <br/> and shown in the profit and loss account or balance sheet . The decision of the<br/> cheif accountant means that each and everty entry will have to be scrutinised which, <br/>in turn means additinal work will have to be performed which can be avoided by <br/> preparing the chart of accounts . The compouter system itserlf prepares acceptable <br/> Financial statements if the chart of accounts is well defined. <br/> Therefore , the chief <a href="https://interviewquestions.tuteehub.com/tag/accoutant-366690" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUTANT">ACCOUTANT</a> should prepare a chart of acounts before switching to computerised accounting.</body></html> | |