An accounting system is a collection of processes, procedures and controls designed to COLLECT, record, classify and summarize financial data for interpretation and management decision-making. Computerized Accounting involves making use of computers and accounting software to record, store and analyze financial data.

Advantages :

(i) Faster Processing:Computers REQUIRE far LESS time than human beings in performing a particular task. Therefore, accounting data is processed faster using a computerized accounting system.

ii) Easy Availability of Information:The data can be made available to different users at the same time. This is called data sharing.

Disadvantages :

(i) Heavy Cost of Installation:

COMPUTER hardware needs replacing and software needs to be updated from time to time with the availability of newer versions.

(ii) System Failure:

The DANGER of a system crashing due to some failure in hardware can lead to subsequent loss of work. This occurs when no back-up is retained.