OVERVIEW OF ACCOUNTING

SOFTWARE APPLICATIONS

Chapter 1
Outline

• Introduction
• Overview of accounting software applications
• Software vs. hardware
• System software vs application software
• The need for accounting software
• Varieties of accounting software in use
• IT and the accounting profession
Introduction
• What is a computer?
• An electronic device capable of manipulating data
• Input, Storing, Processing, & Output  instructions: program

• Historical overview of computer

• In early days fingers & toes were used to count
• Abacus, Pascal’s calculator
• Personal computer
• Artificial Intelligence (AI)
Introduction…
• Computer technology is under continuous improvement
• Are getting lesser in volume size
• Are getting more reliable
• Consume less power
• Are getting cheaper in price
• Better life span
• Have better execution speed
• Better programming Capabilities
• Simpler maintenance schedule
• Have larger memory capacity
Introduction…
• Advantages and uses of a computer
• Working with words, numbers and symbols
• Managing data
• Creating Music and playing games
• Enhancing education
• Connecting with other computers
• Computers are speedy
• Give output
• Computers can processes vast amount of information, …
Generation of Computer
First Generation of Computers
Examples:
EDVAC = Electronic Discrete
Variable Automatic Computer
• a binary serial computer with
automatic addition,
subtraction, multiplication,
programmed division and
automatic checking

UNIVAC1 = UNIVersal
ENIAC = Electronic Numerical Automatic Computer
Integrator and Computer • the first general-purpose
• the first programmable, electronic digital computer
electronic, general-purpose design for business
digital computer made in 1945 application.
Generation of Computer…
Second Generation of Computers
Examples:
CDC 3600 =
• CDC = Control Data Corporation
• CDC 3600 computer arrived at NCAR in November
1963.
• NCAR had begun operations in 1960 as a program of
the National Science Foundation and managed by the
non-profit University Corporation for Atmospheric
Research (UCAR).

IBM 7090  was designed

for large-scale scientific and
technological applications.
Generation of Computer…
Third Generation of Computers
Examples:
PDP-11 (Programmed Data Processor-11) is one of
the most famous computers in computing history, one
of a series manufactured by Digital Equipment
Corporation ( DEC ) from the early 1960s through the
mid-1990s.

IBM 360  The IBM System/360 (S/360) is a

family of mainframe computer systems that was
announced by IBM on April 7, 1964, and delivered
between 1965 and 1978. It was the first family of
computers designed to cover both commercial
and scientific applications
Generation of Computer…
Fourth Generation of Computers
Examples:
• Fourth Generation of computers
was between 1971 – 1980.
• These computers used the VLSI
technology or the Very Large
Scale Integrated (VLSI) circuits
technology.
• Therefore they were also known as
the microprocessors.
• Intel was the first company to
develop a microprocessor.
Generation of Computer…
• Fifth Generation of Computer
• the fifth generation, VLSI technology became ULSI (Ultra Large
Scale Integration) technology, resulting in the production of
microprocessor chips having ten million electronic
components.
• based on parallel processing hardware and AI (Artificial
Intelligence) software.
Fifth Generation of Computer
 Overview of Accounting
Software Applications
• Technology has been transforming the accounting profession for centuries.
• From the abacus to the calculator to the PC and now to the cloud.
• Technological innovation has helped accountants save time, reduce errors and
interpret data effectively.
• In 1979: VisiCalc (Visible Calculator) - the first spreadsheet program introduced.
• In the mid-1980s – 1990s: Microsoft Excel introduced & flourished, most widely used.
• In 1978 Peachtree Software introduced an accounting software package. QuickBooks
accounting software followed in 1983.
• In 1970s: the rise of Enterprise Resource Planning (ERP) software for manufacturing
systems (become popular in 1990s).
• Today: Cloud-based accounting software makes engagements simpler & flexible.
 Hardware and Software
• Computer systems consist of hardware and software.
• Hardware is the physical components of the computer, such as the central
processing unit (CPU), hard disk, monitor, keyboard and mouse.
• Software is the programs that run on a computer.

• A computer system requires both hardware and software to function.

• Aside, additional hardware allows the user to communicate with the system
through inputs and outputs.
 Hardware and Software…

Input Device Output Device

Mouse Screen
Keyboard Speakers
Camera Printer
Microphone LEDs
System Software and
Application Software
• System software is any software that assists with the running or management of
the computer system.
• It includes operating systems, security software and file management software.
• Application software is any software added to the system that enables the user
to perform a task.
• For example:
• a word processor allows the user to type a document.
• a browser allows the user to view web pages.
• a Peachtree accounting allows the user to process transactions and generate reports.
Computerized Accounting
System
• Accounting System
• System is a set of two or more interrelated components that interact and
work together to achieve a goal.
• Inputs, processes, and outputs
• Smaller subsystems (performing specific function)
• Goal conflict or goal congruence in a system?

• Accounting Information System (AIS)

• A system that collects, records, stores, and processes data to produce
information for decision makers.
• Can be use complex or simple technology
Computerized Accounting
System…
• Components of AIS
• People
• Procedures
• Data
• Software
• Information Technology Infrastructure

• Functions of AIS
• To collect and store data about events, resources, and agents.
• To transform that data into information that management can use to make
decisions about events, resources, and agents.
• To provide adequate controls to safeguard the organization’s assets including its
data.
 Selection of Accounting Software
and Installing the Software

• 🍑Peachtree Accounting Software is already installed for you.

 🍑Peachtree Accounting: An
Overview
• Features of :
• Works with company data
• Maintains different companies’ data separately
• Opens 24 months data (2 years data) at once
• Comes with several sample companies
• Offers tutorials that help to get acquainted with the
software
Summary:
• First Generation (1940-1956): The first generation of computers used vacuum tubes for
circuitry and magnetic drums for memory. They were very large and expensive, and often
required a team of people to keep them running.
• Second Generation (1956-1963): The second generation of computers used transistors
instead of vacuum tubes. They were smaller, faster, and more reliable than the first generation
computers.
• Third Generation (1964-1971): The third generation of computers used integrated circuits
(ICs) instead of transistors. ICs are small chips that contain many transistors. They were
faster, smaller, and more reliable than the second generation computers.
• Fourth Generation (1971-Present): The fourth generation of computers used
microprocessors instead of ICs. Microprocessors are chips that contain the entire central
processing unit (CPU) of a computer. They are faster, smaller, and more reliable than the third
generation computers.
• Fifth Generation (Present and Beyond): The fifth generation of computers is still in
development. It is based on the idea of artificial intelligence (AI) and is expected to be able to
learn and reason like humans.
Summary …
• Overview of accounting software applications: Accounting software is a
type of application software used to record and process accounting
transactions within functional elements such as accounts payable, accounts
receivable, journal, general ledger, payroll, and trial balance. It is the
process of recording, analyzing, and interpreting financial transactions and
information.
• Software vs. Hardware: Hardware refers to the physical components of a
computer, such as the monitor, keyboard, and hard drive, while software
refers to the programs and applications that run on a computer.
• System Software vs Application Software: System software is a type of
software that is designed to operate, control, and extend the processing
capabilities of the computer itself. Application software is a type of software
that is designed to perform specific tasks.
Summary …
• The need for accounting software: The need for accounting software is
to help businesses manage their finances more efficiently and accurately. It
can help businesses save time and money by automating tasks such as
invoicing, payroll, and financial reporting.
• Varieties of accounting software in use: There are many varieties of
accounting software in use today, including Peachtree Accounting,
QuickBooks, FreshBooks, Wave Accounting, etc.
• IT and the accounting profession: The biggest impact IT has made on
accounting is the ability of companies to develop and use computerized
systems to track and record financial transactions. IT networks and
computer systems have shortened the time needed by accountants to
prepare and present financial information to management.
Practice Questions
1) What was used for circuitry in the first generation of computers?
2) What was used for memory in the first generation of computers?
3) What was used for circuitry in the second generation of computers?
4) What was used for circuitry in the third generation of computers?
5) What is a microprocessor?
6) What is the fifth generation of computers based on?
7) What is the difference between a microprocessor and an integrated
circuit?
Practice Questions …
1) What is accounting software?
2) What are the benefits of using accounting software?
3) What is the difference between software and hardware?
4) What is system software?
5) What is application software?
6) Why do businesses need accounting software?
7) What are the types of accounting software available?
8) How has technology impacted the accounting profession?
9) What are some of the challenges associated with using accounting software?
10) What are the key features to consider when selecting accounting software?