Tuesday, 27 January 2015

Manual vs. Computerized Accounting

Manual Accounting:-
In manual you first create ledgers, carry forward previous year’s closing balance as opening balance for the current year. Next year, when you create a new books, again you create all the ledgers and enter opening balance. In manual you are required to pass journal entries to transfer closing balance of all nominal account to prepare profit and loss account. Whenever you need to know balance of any ledger, you are required total amount in both debit and credit columns of the ledger and compute the difference to derive the closing balance for the ledger as on that date.
Computerized Accounting:-
When you opt for computerized accounting first time, you have to create all the ledgers and enter opening balance and classify at this stage. Therefore, you enter all transactions through voucher entry. That’s all you have to do and everything else (like posting to ledger, preparation of trial balance, final accounts etc.) is done by the Tally itself.


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