Computerised Accounting Systems — practice questions

This reconciliation is a critical step in ensuring data integrity during the transfer.

Step 1: Calculate the total of individual balances entered To verify the data entry, we sum the individual supplier balances: $\text{\textdollar}12,300 (Supplier A) + \text{\textdollar}9,400 (Supplier B) + \text{\textdollar}6,150 (Supplier C) = \text{\textdollar}27,850$ This matches the total reported by the new system, so the error is not in the summation within the new system itself.

Step 2: Identify the discrepancy We compare the total from the new system with the control account balance from the old system.

• Old System Control Account Balance: $28,750
• New System Total Balances: $27,850
• Discrepancy: $28,750 - $27,850 = $900

The trade payables balance in the new system is $900 lower than the control account from the old system.

Step 3: Suggest possible reasons for the discrepancy This $900 difference must be investigated and resolved before the old system is retired. Possible reasons include:

1. A missing supplier account: A supplier with an outstanding balance of $900 may have been accidentally omitted during data entry.
2. An incorrect entry: A balance may have been entered incorrectly. For example, a balance of $7,050 might have been entered as $6,150 (a transposition error of $900).
3. A payment not recorded: A payment of $900 made to a supplier might have been recorded in the old system just before the cut-off but was not reflected in the final list of outstanding invoices used for data entry.

Points in favour

• Speed and automation: each transaction is posted to every ledger it affects as soon as it is entered, and routine tasks such as invoicing are automated. This deals with the doubling of invoices.
• Accuracy: the system does the arithmetic, so the errors Sana is seeing should fall.
• Reporting: reports can be produced whenever they are needed, so month-end reports would no longer be late.
• Scalability: the system can handle more transactions as the business grows, without more staff.

Points against

• Cost: software, any new hardware and ongoing maintenance all have to be paid for.
• Training: the bookkeeper will need training, which takes time and money.
• Security and data loss: the records become vulnerable to hacking, viruses and system failure, so regular backups and access controls are needed.
• The transfer itself: opening balances must be entered and reconciled to the old records, or errors will be carried into the new system.

Recommendation Sana should transfer. Her problems (volume, late reports, errors) are exactly the ones a computerised system solves, and they will get worse as the business grows. The costs are one-off or manageable, provided she budgets for training, takes regular backups, and reconciles the opening trial balance to the manual records before relying on the new system.