Question

State any three advantages and three limitations of Computerised Accounting System.

Hint:

Give three benefits such as timely reports, efficient records and control. Then give three drawbacks such as quick obsolescence, data loss on power failure and hacking.

Answer 1

Step 1: What is asked:
A Computerised Accounting System (CAS) keeps accounts with the help of computer software. We must give three advantages and three limitations of it. Each point carries half a mark, so 6 points make 3 marks.

Step 2: Advantage 1: Timely reports:
The software gives reports and information at any time and in the format the user wants. A trial balance or a ledger is ready in seconds.

Step 3: Advantage 2: Efficient record keeping:
All entries are stored in one place. Records are easy to search, update and retrieve, so the work is neat and accurate.

Step 4: Advantage 3: Effective control:
Users get passwords and fixed rights. Only the authorised person can view or change data, so the system stays under control.

Step 5: Limitation 1: Quick obsolescence:
Technology changes fast. Hardware and software become outdated soon, so the business must invest again in a shorter period.

Step 6: Limitation 2: Loss of data on power failure:
Data may be lost or corrupted when power is cut suddenly. Regular backup is needed to avoid this.

Step 7: Limitation 3: Risk of hacking:
Data kept on a computer can be hacked or stolen over a network.

Final Answer:
Advantages: timely reports, efficient record keeping and effective control. Limitations: faster obsolescence of technology, loss of data on power failure and risk of hacking.