Question

How does creating a subsidiary ledger differ between manual and computerised accounting systems

Answer 1

Solution. An organization deals in different financial transaction activities over time for operation to meet its organizational objective. In order to meet set targeted profit level and sustain, it needs to record, analyze and interpret various financial statements, posting of its activities in subsidiary ledger is one such process of grouping accounts of one type.

In the manual accounting system, separate accounts are made for each of different transaction activity and are manually posted into ledger. Journal entries are passed, ledger accounts are prepared and trial balance is met in order to pass onto other necessary financial statements preparation and disclosure of information periodically. It encompasses qualified accountants, is a time consuming process.

In the computerized accounting system, information is provided by the individual which gets processed automatically and transferred into accounts of respective activity and posting thereafter to ledger is made through the help of software applied into the system and are recorded alphabetically for the given period of time. It encompasses speedy recovery of information and reports, needs accountants with computerized software skills and requires investment.