NCERT Class 12 Accountancy Computerised Accounting System: Chapter 1 — OVERVIEW OF COMPUTERISED ACCOUNTING SYSTEM
This chapter introduces the concept of Computerised Accounting System (CAS) in Class 12 Accountancy for CBSE. It highlights the need for CAS in modern businesses, emphasizing how Information Technology (IT) enhances speed, accuracy, and timely access to financial information for better decision-making. The chapter details the five core components of a CAS: Procedure, Data, People, Hardware, and Software. It explains that CAS processes accounting transactions using hardware and software to generate essential accounting records like day books, ledgers, trial balances, balance sheets, and profit and loss accounts. The chapter also touches upon the basic flow of data to information and mentions upcoming discussions on software packages, grouping of accounts, and codification methods for CAS, crucial for effective financial management in today's competitive business environment.
Quick info
| Board | CBSE / NCERT |
|---|---|
| Class | Class 12 |
| Subject | Accountancy |
| Book | Computerised Accounting System |
| Chapter | Chapter 1 — OVERVIEW OF COMPUTERISED ACCOUNTING SYSTEM |
| Language | English |
| PDF type | NCERT Textbook |
| Session | CBSE 2026 |
| Reading time | 2 minutes |
| Word count | 305 |
Learning outcomes
- Understand the need for a Computerised Accounting System.
- Appreciate the impact of Information Technology on financial accounting.
- Describe the major functions of an Accounting Information System (AIS).
- Identify the components of a Computerised Accounting System.
Vocabulary
| Word | Meaning |
|---|---|
| Information Technology (IT) | The use of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data. |
| Computerised Accounting System (CAS) | A system that processes accounting transactions using hardware and software to produce accounting records and reports. |
| Procedure | A logical sequence of actions to perform a task. |
| Data | Raw facts or figures used as input for processing. |
| Hardware | The physical components of a computer system, including peripherals and networks. |
| Software | Programs and operating information used by a computer, including system and application software. |
| Accounting Information System (AIS) | A system that collects, stores, and processes financial and accounting data. |
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Practice questions
- What is the primary benefit of using computers in business accounting? Answer: Computers enable quick, accurate, and timely access to information, aiding decision-making and enhancing profitability.
- List the five components on which a Computerised Accounting System rests. Answer: The five components are Procedure, Data, People, Hardware, and Software.
- What is the basic function of a Computerised Accounting System? Answer: It processes accounting transactions using hardware and software to generate accounting records and reports.
Practice MCQs
Q1. Which of the following is NOT a component of a Computerised Accounting System?
Explanation: The five components are Procedure, Data, People, Hardware, and Software. 'Market' is not listed as a component.
Q2. The use of computers and Information Technology in business helps to:
Explanation: IT enables businesses to quickly and accurately access information, which sharpens competitive edge and enhances profitability.
Q3. What is the raw fact input for any business application called?
Explanation: Data is defined as the raw fact (as input) for any business application.
Q4. Which of the following reports can be generated by a CAS?
Explanation: CAS processes transactions to generate accounting reports such as Day books/Journals, Ledger, Trial Balance, Balance Sheet, and Profit and Loss Account.
Q5. The physical components of a computer system are referred to as:
Explanation: Hardware refers to the computer, associated peripherals, and their network, which are the physical components.
Frequently asked questions
What is a Computerised Accounting System (CAS)?
CAS refers to the processing of accounting transactions using hardware and software to produce accounting records and reports, enabling businesses to manage financial information efficiently.
Why is Information Technology (IT) important in modern accounting?
IT enables businesses to process accounting transactions quickly, accurately, and timely, which aids in better decision-making and enhances profitability.
What are the five main components of a CAS?
The five components are Procedure, Data, People, Hardware, and Software.
What kind of reports can a CAS generate?
A CAS can generate essential accounting reports like Day books/Journals, Ledger, Trial Balance, Position Statement (Balance Sheet), and Statement of Profit and Loss.
What is the role of 'Data' in a CAS?
Data represents the raw facts or figures that are input into the system for processing into meaningful accounting information.
How does CAS help in decision-making?
By providing quick, accurate, and timely access to financial information through generated reports, CAS supports informed decision-making.
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NCERT Class 12 Accountancy — Computerised Accounting System — Chapter 1 — OVERVIEW OF COMPUTERISED ACCOUNTING SYSTEM. Verified by NCERT Help Editorial Team. Reviewed on 29 Jul 2026. Last updated 10 Aug 2026.