CHAPTER - I

Operating system
An operating system is an organised collection of software that controls the overall
operation of the computer. It acts as an interface between the user of a computer and the
hardware. The purpose of an operating system is to provide an environment in which the
user can execute the programs conveniently and efficiently.
Functions of OS:
The functions depends on the type of operating system. Some of the main functions of
operating system are listed below
1. Memory management: it refers to the ability of the operating system to manage
the primary memory (RAM) of the system effectively. It is responsible for the
following activities:
 Keep track which parts of memory are currently being used and by whom
 Decide which program to load when memory space becomes available.
 Allocate and De-allocate memory space as needed.
2. Process management: a process is a program in execution. The process
management module of an operating system takes care of the creation and deletion
of processes, scheduling of various system resources to the different processes,
providing mechanism for synchronisation and communication among processes.
3. File management: A file is a logical storage unit which abstract the physical
properties of its storage device. A file is a collection of related information defined
by its creator. The file management module takes care of the file related activities
such as organization, storing, retrieval, naming, sharing and protection of files. It
provides a set of operations for programs and users to manage the information on
the secondary storage devices. Some of the services provided by file management
module are:
 File creation and deletion.
 Directory creation and deletion.
 Security for stored information.
 File transfer and file backup to different storage media.
4. Device management: a computer system consists of several devices such as
terminal, printer, disk and tape. The device management module of an operating
system is responsible for controlling all the devices of a computer. It allocates the
input and output devices when needed and de-allocate when the processes are
finished. It keeps track of input output request from process, issues commands to
the input output devices and ensures correct data transmission.
5. Security: It refers to a mechanism for controlling access by programs, processes,
or users to both system and user resources. The security module of an operating
system ensures protection against destruction and unauthorised access of various
resources and information.
 6. Command interpretation: it takes care of interpreting the user commands that
are supplied either individually or in a form of command language and directing
the system resources to handle the request. The operating system that reads and
interprets control statements is called as command line interpreter. The modern
operating system uses a different interface to interact with the user. It is called as
graphical user interface.(GUI). Here the user interacts with the operating system
using graphical objects such as menus, icons and dialog boxes.

Types of operating system:

1. Single user operating system: Is one in which only one user can use the
computer for any given time. The user can do only one thing at a time on the
computer. The user can execute the next program only when the earlier program
has been completed its execution.
2. Multi user operating system: it allows a computer to support several users
simultaneously. Here one CPU is shared among all users logged into the computer.
3. Batch processing operating system: under this system, users submit their jobs to
a central place of a computer, where these jobs are collected into a batch. They are
subsequently placed on an input queue from where they are taken for execution
one at a time.
4. Multiprocessing operating system: it allows multiple users to use more than one
CPU. Here all users are interacting with different CPU of a computer.
5. Online operating system: in this system a number of users operate, but only
single program will be running on all users terminal. Eg: ticket booking
reservations, banking etc..
6. Real time operating system: these systems are used in environments where a
large number of events mostly external to computer systems, must be accepted and
processed in a short time or within certain deadline. Eg: flight control, defence
applications.

Computerised accounting
It is an application software to record, store and analyse information on financial
transactions from internal and external operations of both internal and external operations
of both small and large businesses.
Need or Importance
Following tasks demand for computerised accounting systems:
1. Numerous transactions: the computerised accounting system is capable of
handling large number of transactions with speed and accuracy.
2. Instant reporting: the computerised accounting is capable of offering quick and
quality reporting because of speed and accuracy.
 3. Reduction in paper work: A manual accounting system requires large physical
storage space to keep accounting records/books and vouchers/ documents. This
can be reduced by introducing computerised accounting system.
4. Flexible reporting: computerised accounting is capable of generating reports of
any balance as and when required and for any duration which is within the
accounting period.
5. Accounting queries: These are the accounting queries which is based on some
external parameters. For eg; query to identify the customer.
6. Online facility: Computerised accounting system offers online facility to store
and process transaction data so as to retrieve information to generate and view
financial reports.
7. Scalability: Computerised accounting system are fully equipped with handling the
growing business enterprise. There is no additional cost of processing additional
transaction data.
8. Accuracy: The information content of reports generated by the computerised
accounting system is accurate and is reliable for decision making.
9. Security: in computerised accounting only the authorised users are permitted to
have access to accounting data.
Advantages
1. speed: accounting application provide user friendly screens for performing data
entry operations. It can produce reports such as balance sheet, trial balance etc..
Instantly. Each step in the accounting cycle need not be performed every time.
This speeds up the book keeping and increases the productivity of the
organisation.
2. Automation:A computerised accounting system eliminates many cumbersome
and time consuming manual processes. In addition to calculations being
automated, many accounting software programs allow various reports such as
year-end and statistical to be generated at the touch of a button.
3. Accuracy: A computerised accounting reduces the risk of human error.
Computers process numbers and perform calculations with 100% accuracy, which
eliminates the possibility of mathematical error.
4. Availability of information: The data is instantly made available to different
users in different locations at the same time.
5. Increased productivity: Accountants who have to access to computerised
accounting systems can work more quickly and enjoy increased productivity. The
software allows accountants to make changes faster than adjusting a printed ledger
or chart. Data organisation tools make it easy to find specific pieces of information
at any given time.
6. Automatic document production: Accounting applications have built in
capability to automatically generate invoices, credit notes, purchase orders,
printing statements and payroll documents.
7. Up to date information:The accounting records are automatically updated and so
account balances will always be up-to-date.
 8. Management information: Reports can be produced which will help
management monitor and control the business.
9. GST/VAT return: the automatic creation of figures for the regular GST/VAT
returns.
10. Legibility : The onscreen and printed data should always be legible and so will
avoid errors caused by poor figures.
11. Efficiency: better use is made of resources and time.
12. Cost savings: computerised accounting programs reduces staff time doing
accounts and reduce audit expenses as records are neat, up-to-date and accurate.

Disadvantages
1. Power failure: Due to the failure of power the employees may not be able to
access the accounting record.
2. Computer viruses: Because of computer viruses all the data become destroyed
and business bears loss of data.
3. Hackers: it can hack the confidential accounting data of the business and misuse
them.
4. Bad accounting system: If the accounting system is not properly set up to meet
the requirement of the business due to bad program or inappropriate software or
software or untrained personnel, the system may accept wrong inputs or may
perform incorrect operations.

Accounting packages:
Accounting packages are various software available. Selection of software defends on the
type of business organisation. Some of the packages available today are
1. Spread sheets:it is a simple row and column arithmetic accounting worksheet. A
spread sheet is an integrated package that comes with a worksheet program, graph
program and a database management system.
Advantages:
 It is simple to use and easy to understand.
 Common functions like calculations, setting formulas can be easily done
 Grouping and regrouping of accounts can be done.
 Presentation can be done in various forms including graphical form.
 Restricted access and password protection of cell can be used to give
security .
Disadvantages:
 It has data limitations. They can accept data to a certain limit.
 Simultaneous access on a network may not be possible.
 Formulas or other means have to be adopted to complete the double entry.
  Reports are not automatically formatted and generated but have to be user
controlled.

2. Pre-packaged accounting software : these are used in small and medium sized
organisations. These are easy to use, relatively inexpensive and readily available.
Once the basic parameters are set and the master files are updated, the system is
ready for use.
Advantages:
 Easy to install: CD or floppy disk has to be inserted and the setup file
should be run to complete the installation.
 Relatively inexpensive: these packages are sold at very cheap prices now
a days.
 Easy to use: user manual provides most of the solutions to the problems
that a user may face.
 Backup procedure is simple: Housekeeping section provides menu for
backup. The backup can be taken on floppy disk, CD or hard disk.
 Flexibility: certain flexibility of reports are provided by some of the
softwares. This allows the user to make the invoice, challan etc..
 Effective for small and medium sized business
Disadvantages:
 Doesn’t cover the peculiarities of specific business which are more
complex today.
 Doesn’t cover all functional area.
 Customization may not be possible in most such softwares.
 Reports generated is not sufficient or serve the purpose.
 Lack of security: any person can view data of all companies with common
access password.
 Bugs in the software: certain bugs may remain in the software which takes
long to be rectified

3. Customised accounting software: A customised accounting software is one

where the software is developed on the basis of requirement.

Advantages:
 Functional areas which are not in pre-packaged software covered gets
computerised.
 The input screens can be tailor made to match the input documents for ease
of data entry.
 The reports can be as per the specification of the organisation.
 Bar code scanners can be used as input devices
 Suitably matches with the organisational structure.
Disadvantages:
  Requirement specifications are incomplete resulting in a defective or
incomplete system.
 Inadequate testing results in bugs remaining in the software.
 Documentation is not complete.
 Frequent changes made to the system with inadequate change management
procedure
 Vendor unwilling to give support of the software due to other
commitments.
 Control measures are inadequate.
 Delay in completion of software due to problems with the vendor or
inadequate project management.

Tally
Tally is a user friendly business accounting software that helps business organisation to
have full control different aspects of business. The tally account software includes
complete bookkeeping options, classification of accounts, general ledger, accounts
receivable and payable and bank reconciliation.
Features:
 It provides instant results, thus we don’t have to wait for day to end.
 We don’t have to remember the codes for different accounts, debtors or creditors.
It takes care of them.
 It provides a wide and complete range of bookkeeping facilities.
 Tally is flexible and can provide reports for different situations such as customized
vouchers, financial reports etc…
 It is secured against data tempering.
 Tally comes out with an online help facility that helps the user in difficult
situations
 Tally has built in open data base connectivity (ODBC) that connect it to the other
applications.
 It helps to publish reports and document on W.W.W
 Tally comes with built in browser that can be used to surf the net.
 Tally is VAT compliment.
 We can easily calculate TDS (tax deducted at source.
 It tracks sales transactions and gives negative stock warning.
 It provides for sales transaction created using forex currency and interest
calculation.
 It can print the address of the sundry debtors / creditors ledger while printing a
ledger account.
 It can automate simple to complex payroll processes. We can print pay slips,
maintain salary and wages and attendance/ leave/overtime registers
 It efficiently automates the check-out process and allows us to create invoices and
collect payments from customers.
 It supports multiple languages i.e it is available in Hindi, Marathi, Gujrati Bengali,
kannada, Tamil, Telugu, Malayalam and so on.