NBU, B.Com Honours: DSC 3A: COMPUTERISED ACCOUNTING AND SYSTEM Past Solved Paper 2022

  

UNIVERSITY OF NORTH BENGAL

B.Com. Honours 6th Semester Examination, 2022

 

DSE3-COMMERCE

 

Time Allotted: 2 Hours                                                             Full Marks: 60

 

The figures in the margin indicate full marks.

 

 

Candidates are required to answer any one from the two papers and they should mention it clearly on the Answer Book.

 

DSE-3A

COMPUTERISED ACCOUNTING AND SYSTEM

Solution

 

 

GROUP-A

 

Answer any two questions 12×2 = 24

 

1. What do you understand by Backup and Restoring data in an accounting software? In this context, mention and explain the method of restoring data in a widely used popular accounting software?                                                                                 3+9=12

 

Answer: Backup refers to the process of copying and archiving data so it can be restored in case of data loss. This is crucial for protecting against data corruption, hardware failures, or other disasters. On the other hand, Restoring data involves retrieving data from a backup to return it to its original or usable state after data loss or corruption.

     The most popular accounting software in India is considered to be Tally ERP9 so we will go for method of Restoring Data in Tally accounting software. The method of Restoring Data in Tally is as follows-

     

Step 1: Open Tally Software: Locate the Tally icon on your desktop or start menu and double-click the icon to open Tally. Once opened, you’ll be greeted by the Tally home screen.

 

Step 2: Navigate to Gateway of Tally: The Gateway of Tally screen is the main interface you interact with upon opening the software. This screen provides various options like Masters, Transactions, Utilities, and Reports.

 

Step 3: On the right hand bar of Gateway of Tally screen, select ‘Company Info’ icon or press Alt+F3 from the Keyboard. Under `Company Info`, find and select the `Restore` option. This option is used to restore data from backup files.

 

Step 4: Specify the Source Path: A new window will open, prompting you to specify the source of the backup. For example, if your backup file is located in a folder named `TallyBackups` on drive D:, you would enter `D:\TallyBackups` as the source path. Use the navigation tools provided to locate and select the correct folder.

 

Step 5: Define the Destination Path: You will also need to specify where the restored data should be saved. Typically, this would be the Tally data directory where your active company files are stored. For instance, if your Tally data directory is `C:\Tally\Data`, you would enter this path as the destination. This ensures the restored data integrates seamlessly with your existing Tally setup.

 

Step 6: Choose the Company to Restore: Tally will display a list of companies available in the backup file. Select the specific company you wish to restore. For example, if your backup contains data for multiple companies and you only want to restore `XYZ Pvt Ltd`, you will select that company from the list.

 

Step 7: Complete the Restoration Process: After selecting the company, confirm the restoration process. Tally will start restoring the data from the backup file to the specified destination. Once the process is complete, a confirmation message will appear. Verify the data by opening the restored company in Tally and checking that all entries are accurate and complete.

 

In Conclusion Restoring data in Tally is a straightforward process once you understand the steps involved. The key steps include selecting the correct source and destination paths, choosing the appropriate company, and verifying the restoration process. This ensures that your financial data is safely and accurately restored, allowing you to resume your accounting tasks without data loss.

 

 2. What are the various “Accounting Reports” that can be generated in a widely used popular accounting software? Explain each one of these briefly.                                                      4+8=12

 

Answer: In modern accounting software, various reports are generated to provide comprehensive insights into the financial health and operations of a business. It will be difficult to discuss all the account reports at once and therefore some of the key accounting reports commonly available in popular software Tally ERP9 are listed below:

 

1.     Profit and Loss Statement;

2.    Balance Sheet;

3.    Cash Flow Statement;

4.    Fund Flow Statement;

5.    Trial Balance; and

6.    General Ledgers etc.

 

The brief explanations of the above accounting reports are as follows:-

 

1. Profit & Loss Statement: The Profit & Loss (P&L) Statement in Tally shows the company's revenues and expenses over a specified period, such as a month, quarter, or year. It includes sections for sales, direct expenses (like COGS), indirect expenses (such as administrative expenses), and net profit or loss. In Tally, you can generate this report by navigating to Gateway of Tally > Profit & Loss Account. This report helps businesses analyze their profitability and operational efficiency.

 

2. Balance Sheet:  The Balance Sheet provides a snapshot of the company’s financial position at a specific point in time. It includes assets (fixed and current), liabilities (long-term and current), and equity. In Tally, you can generate this report by navigating Gateway of Tally > Balance Sheet. This report helps assess the company’s liquidity, solvency, and overall financial stability.

 

3. Cash Flow Statements: The Cash Flow Statement offers insights into the cash inflows and outflows from operating, investing, and financing activities. On the other hand, the Fund Flow Statement tracks the sources and uses of funds, highlighting changes in working capital and financial position between two balance sheet dates, aiding in financial analysis. In Tally, generate this report by navigating to Gateway of Tally > Display > Cash/Funds Flow > Cash Flow. It helps businesses manage their cash efficiently and plan for future financial needs.

 

4. Fund Flow Statements: The Fund Flow Statement tracks the sources and uses of funds, highlighting changes in working capital and financial position between two balance sheet dates, aiding in financial analysis. In Tally, generate this report by navigating to Gateway of Tally > Display > Cash/Funds Flow > Fund Flow. It allows for a comparative analysis of the company’s financial position over different periods, providing insights into financial trends and patterns.

 

5. Trial Balance: The Trial Balance lists all ledger accounts and their balances to ensure that total debits equal total credits. It includes all debit and credit balances of ledger accounts at a specific date. Access the Trial Balance in Tally by going to Gateway of Tally > Display > Trial Balance. This report is crucial for verifying the accuracy of ledger postings before preparing formal financial statements.

 

6. General Ledger: The General Ledger provides detailed transactions for each ledger account. It shows all debits and credits for each ledger account within a period. In Tally, you can view the General Ledger by navigating to Gateway of Tally > Display > Account Books > Ledger. This report is essential for reviewing financial transactions and ensuring the accuracy of accounting records.

 

Apart from above reports Tally offers a comprehensive suite of accounting reports that provide detailed insights into a business's financial health and operations. By leveraging these reports, businesses can maintain accurate financial records, comply with regulatory requirements, and make informed decisions to drive growth and efficiency.

 

 

3. What do you understand by e-filing of Income Tax Return? Discuss the various steps involved while filing ITR online.3+9=12

 

Answer: Electronic-filing (e-filing) of Income tax return (ITR) refers to submitting tax returns over the internet using tax preparation software or through the tax department's website. This can be done by downloading the ITR form and uploading the filled in ITR form or entirely online without downloading the ITR form on the Income Tax e-Filing Portal of India .

In our case, we are discussing the steps for Filing ITR Online Without Downloading the ITR Form:

Step-1: Registration on the Income Tax e-Filing Portal: Visit the official Income Tax e-Filing website of Indian Government (https://www.incometaxindiaefiling.gov.in). Click on 'Register Yourself' and complete the registration process using your PAN, name, date of birth, and other personal details. Verify your registration using the OTP sent to your registered mobile number and email address.

Step-2: Login: Use your credentials to log in to the e-Filing portal. Enter your User ID (PAN), password, and the captcha code to access your account.

Step-3: Start Filing ITR Online: On the dashboard, go to the 'e-File' section and select 'Income Tax Return. Choose the assessment year and the ITR form applicable to you (e.g., ITR-1 for salaried individuals).

Step-4: Select Filing Type: Choose 'Prepare and Submit Online' as the filing type to fill out the form directly on the portal. Select the appropriate status (individual, HUF, etc.) and click 'Continue.'

Step-5: Fill Form Online: Enter your details in the online form, including personal information, income details, deductions, and tax payments. Use the pre-filled data option if available, which will automatically populate certain fields based on your previous returns and data from the tax department.

Step-6: Validate Information:   - Validate each section of the form by clicking the 'Validate' button. Correct any errors or omissions highlighted during the validation process.

Step-7: Tax Calculation: Once all information is validated, the portal will calculate your tax liability automatically. Review the calculated tax liability or refund due and ensure all details are correct.

Step-8: Submit Form: After ensuring all details are accurate, click on 'Preview and Submit.' Review the summary of your ITR form and make any necessary corrections.

Step-9: Verification: Post submission, you need to verify your return using one of the following methods:

a.    Aadhaar OTP: An OTP will be sent to your registered mobile number linked with Aadhaar.

b.    EVC (Electronic Verification Code): This can be generated via net banking, bank account, or Demat account.

c.     Digital Signature Certificate (DSC): If you have a DSC, you can use it to e-verify your return.

 Physical Verification:  If you are unable to e-verify, you can print and sign the ITR-V (acknowledgment receipt) and send it to the Centralised Processing Center (CPC) office in Bengaluru within 120 days of filing.

 

Step-9: Acknowledgment: Once the return is verified, you will receive an acknowledgment from the Income Tax Department via email or SMS. This acknowledgment confirms that your return has been successfully filed and verified.

Filing your Income Tax Return online without downloading the ITR form is a streamlined and efficient process. By following above steps, taxpayers can ensure accurate submission and compliance with tax regulations, all through the convenience of the e-Filing portal. This method simplifies the tax filing process, making it more accessible and user-friendly.

 

 

4. “The process of selecting an „Accounting Package‟ suitable for an organization involves many aspects to be considered”. What are these considerations for selection of Accounting Packages?12

 

Answer: Selecting the right accounting package is a critical decision that can significantly impact the efficiency and effectiveness of a business's financial operations. Here are the key considerations for selecting an accounting package:

 

1. Business Needs: Identify the specific accounting functions your business needs, such as invoicing, payroll, inventory management, and financial reporting. Consider any industry-specific requirements, like job costing for construction or point-of-sale systems for retail.

 

2. Scalability: Choose software that can scale with your business as it grows. Ensure the package can handle increased transactions, more complex accounting tasks, and additional users.

 

3. Ease of Use: The software should have a user friendly interface that is easy to navigate, minimizing the learning curve and increasing productivity. It should be accessible for employees without a strong accounting background.

 

4. Integration: The accounting software should integrate seamlessly with other business systems, such as Customer relationship management (CRM) and enterprise resource planning (ERP) , and e-commerce platforms. This ensures smooth data transfer and reduces manual entry errors.

 

5. Customization: Look for software that offers customization options to tailor the system to your specific business processes and reporting requirements. Customizable dashboards and reports are essential.

 

6. Support and Training: Reliable customer support is crucial for resolving issues quickly. Check if support is available through various channels like phone, email, and live chat. Besides, Comprehensive training materials such as manuals, tutorials, and webinars help your team learn to use the software effectively.

 

7. Cost: Evaluate the total cost of ownership, including the initial purchase price, licensing fees, maintenance, upgrades, and any additional costs. Ensure the software fits within your budget.

 

8. Security: The software must have robust security features to protect sensitive financial data. Look for encryption, secure access controls, and regular security updates.

 

9. Compliance: The software should adhere to local accounting and tax regulations to ensure legal compliance and avoid penalties. Regular updates to reflect changes in tax laws and accounting standards are essential.

 

10. Vendor Reputation: Research the vendor’s reputation in the market. Read reviews, seek recommendations, and evaluate their experience and reliability in providing accounting solutions. A large, satisfied customer base can indicate a reliable and effective accounting package.

 

11. Cloud vs. On-Premises: Decide whether you need a cloud-based solution, which offers remote access and automatic updates, or an on-premises solution, which may offer more control over data and customization.

 

12. Reporting and Analytics: Look for software that provides robust reporting and analytics capabilities. This includes customizable reports, real-time data analysis, and the ability to generate insights that aid in strategic decision-making.

 

In conclusion, selecting an accounting package involves careful consideration of various factors to ensure it meets your business needs and supports future growth. By focusing on the above considerations, you can choose an accounting package that enhances your financial operations and contributes to your business's success.

 

GROUP-B

 

5. Answer any four questions: 6×4 = 24

 

(a) What is Gateway of a widely used popular accounting software? Discuss the various items on Gateway of a widely used popular accounting software.                                                   6

 

Answer: The Gateway of Tally is the central hub of Tally ERP 9, a widely-used accounting and business management software. This primary interface provides streamlined access to the software's comprehensive features and functionalities. It is organized into several key sections:

 

1. Masters: This section is fundamental for setting up the accounting framework of a business. Users can create and manage essential components such as accounting ledgers, and groups as well as inventory stock items and groups. These elements form the backbone of the accounting system, enabling structured financial record-keeping.

 

2. Transactions: In this section, users can record various financial transactions, including Accounting vouchers like, sales, purchases, receipts, and payments as well as inventory vouchers. Accurate transaction recording is vital for maintaining the integrity of financial data and ensuring real-time updates to accounts.

 

3. Utilities: This section encompasses tools for performing ancillary tasks that support data management and security. Functions such as data backup and restoration, as well as import and export options, are available here. These utilities help safeguard financial information and facilitate the smooth transfer of data.

 

4. Reports: The Reports section offers access to a broad range of reports that provide insights into different aspects of the business. Financial reports like balance sheets and profit & loss statements, stock reports, and statutory reports for compliance purposes are accessible. These reports are crucial for decision-making and strategic planning.

 

The Gateway of Tally thus serves as an all-encompassing dashboard that enhances the efficiency of business operations by integrating accounting, transaction processing, data management, and reporting into a single, user-friendly interface.

 

 

(b) What is difference between debit note and credit note in a widely used popular accounting software?                                     6

 

Answer: A Debit Note and a Credit Note are both essential documents in the realm of business transactions, primarily used for adjusting amounts in accounts. They serve different purposes and are issued by different parties within a transaction.

 

1. Debit Note: This document is issued by a buyer to a seller. It is used in scenarios where the buyer returns goods that were previously purchased on credit or if the buyer identifies an overcharge in the invoice. The debit note indicates that the buyer is reducing the amount payable to the seller by the value of the returned goods or the overcharged amount. Essentially, it acts as a formal request for a credit adjustment in the buyer's account.

 

2. Credit Note: Conversely, a credit note is issued by a seller to a buyer. This document acknowledges that the seller has agreed to a reduction in the amount due from the buyer. The issuance of a credit note usually occurs in situations such as when goods are returned by the buyer, or when an overcharge on the original invoice is recognized. The credit note signifies that the seller has credited the buyer's account with the agreed reduction amount.

 

In summary, a debit note is initiated by the buyer to request a reduction in payable amounts due to returns or discrepancies, while a credit note is issued by the seller to confirm the agreed reduction in the buyer's outstanding balance. These documents ensure accuracy in financial transactions and proper adjustment of accounts between the involved parties.

 

 

(c) Explain the process of creating company in Tally in a widely used popular accounting software.                                         6

 

Answer: Creating a company in Tally is a straightforward process that sets the foundation for managing your business's financial data within the software. Here’s a step-by-step guide:

 

Step-1: Open Tally: Begin by launching the Tally ERP 9 software on your computer. This opens the main interface where you can access various features and functionalities.

 

Step-2: Gateway of Tally: Once Tally is open, you will be directed to the Gateway of Tally screen. This is the central dashboard from which you can navigate to different sections of the software.

 

Step-3: Create Company: On the Gateway of Tally screen, look for the 'Company Info' menu on the right hand side or simply press Alt+F3 on the keyboard. Select 'Create Company' from the available options. This action initiates the process of setting up a new company profile in Tally.

 

Step-4: Enter Details: You will be prompted to fill in the necessary details for your new company. Key information required includes, Name of Company, Address, Financial Year, Currency etc. After entering all the required details, review the information for accuracy and completeness.

 

Step-5: Save the Company: Once satisfied, save the company profile by pressing the appropriate key (usually 'Enter' or 'Ctrl+A'). Your company is now created in Tally, and you can begin recording transactions, managing accounts, and generating reports.

 

 

(d) Explain the need of computerised accounting system in an organisation. 6

 

Answer: The need for a computerized accounting system in modern business operations is driven by several key benefits that enhance overall efficiency and effectiveness. Here are the main reasons why businesses adopt computerized accounting systems:

 

1. Efficiency: Computerized systems automate routine accounting tasks such as data entry, invoicing, and ledger maintenance. This automation significantly speeds up processing times and allows for quicker completion of tasks that would otherwise be time-consuming if done manually.

 

2. Accuracy: By minimizing human intervention in calculations and data entry, computerized systems reduce the likelihood of errors. Automated calculations ensure precise financial records, leading to more reliable financial statements.

 

3. Real-Time Information: Computerized accounting systems provide real-time updates on financial data, enabling businesses to monitor their financial health instantly. This immediacy helps in making informed decisions quickly and effectively.

 

4. Scalability: As a business grows the volume of transactions increases. Computerized systems can easily scale to accommodate this growth without compromising performance, ensuring that the accounting function remains robust and responsive.

 

5. Reporting: These systems can generate detailed and customizable reports effortlessly. Whether it’s financial statements, tax reports, or performance analytics, computerized accounting systems can produce comprehensive reports tailored to specific needs, aiding strategic planning and analysis.

 

6. Compliance: Adhering to statutory requirements and accounting standards is crucial. Computerized systems ensure that businesses comply with relevant laws and regulations by keeping accurate records and generating necessary compliance reports automatically.

 

In summary, a computerized accounting system streamlines accounting processes, enhances accuracy, provides real-time data, supports business growth, simplifies reporting, and ensures compliance with legal standards, making it indispensable for modern business operations.

 

 

(e) What are the advantages of e-filling of Income Tax Return? 6

 

Answer: E-filing of Income Tax Returns (ITRs) offers numerous advantages, making it a preferred method for taxpayers. Here are six key benefits:

 

1. Convenience and Accessibility: E-filing allows taxpayers to file their returns from the comfort of their home or office at any time. This eliminates the need to visit tax offices and wait in long queues, providing a hassle-free experience.

 

2. Speed and Efficiency: The process of e-filing is faster compared to manual filing. Once submitted, the returns are processed quickly by the tax authorities. Refunds, if any, are also issued more promptly.

 

3. Accuracy and Error Reduction: E-filing platforms often come with built-in validation checks that help reduce errors by prompting users to correct mistakes before submission. This ensures a higher degree of accuracy in the returns filed.

 

4. Secure and Confidential: E-filing is a secure method as it uses encryption technologies to protect the data. Confidential information remains secure and is less likely to be mishandled or lost compared to paper filings.

 

5. Immediate Acknowledgment: Upon successful submission, an immediate acknowledgment receipt is generated, providing taxpayers with instant confirmation that their returns have been filed. This receipt can be useful for future reference and record-keeping.

 

6. Access to Historical Data: E-filing platforms often provide access to past returns and related documents. This makes it easier for taxpayers to retrieve and review their historical tax data, aiding in better financial planning and record-keeping.

 

These advantages collectively make e-filing an efficient, secure, and user-friendly method for fulfilling tax obligations, encouraging more taxpayers to adopt this modern approach.

 

 

 

 

(f) Write short notes on the following:                         2×3 = 6

(i) VAT

(ii) Memo Voucher

(iii) Reversing Journal.                                 

 

 

Answer: VAT: Value Added Tax (VAT) was a consumption tax levied Government of India on the value added to goods and services at each stage of the production and distribution process. It is collected incrementally by businesses, which charge VAT on their sales and can reclaim the VAT they paid on their purchases. This system prevents tax evasion, ensures a steady revenue stream for the government, and promotes transparency in the supply chain. By taxing the value added at each stage, VAT ensures that the final consumer bears the total tax burden, reflected in the purchase price of the goods or services. This method of taxation is widely used globally and is valued for its efficiency and ability to generate substantial government revenue without significantly distorting economic activity. VAT is replaced by Goods and Service Tax (GST) in India from 2016.

 

Memo Voucher: In Tally ERP 9, a Memo Voucher is used to record provisional or non-accounting transactions that do not immediately impact financial statements. These entries help track and document pending approvals, adjustments, or review-required transactions without affecting the actual financial reports. Memo Vouchers are ideal for internal tracking, providing a reminder for future actions and maintaining audit trails. They can be easily converted into regular vouchers once confirmed, updating the financial records accordingly. To create a Memo Voucher in Tally, navigate to "Accounting Vouchers," select the Memo Voucher type with Alt+F10, enter the transaction details, and save. This feature enhances flexibility, internal control, and audit readiness, ensuring accurate financial management.

 

Reversing Journal: In Tally ERP 9, a Reversing Journal is a tool used to automatically reverse accrual entries made in previous periods, ensuring accurate financial reporting. It simplifies the handling of period-end adjustments such as accrued expenses or revenues, which need to be reversed in subsequent periods. To create a Reversing Journal, users navigate to "Accounting Vouchers," select the Journal Voucher, input the original entry details, and designate it for reversal by Pressing Ctrl+R in the keyboard. By setting a reversal date, typically at the start of the next period, users can schedule the automatic reversal of the entry. This process helps maintain accurate financial records, reduces errors, and ensures compliance with accounting principles, enhancing overall financial management in Tally.

 

 

GROUP-C

 

6. Answer any four questions: 3×4 = 12

 

(a)         Explain the various types of accounting software with examples. 3

 

Answer: Various types of Accounting software includes:

 

Desktop accounting software: Desktop accounting software, like Tally.ERP 9, QuickBooks Desktop, is installed locally on a computer and accessed from that device.

 

Cloud-based accounting software: Cloud-based accounting software, such as QuickBooks Online, is hosted on remote servers and accessed via the internet from any device.

 

Enterprise Resource Planning (ERP) software, like SAP Business One, integrates various business functions, providing centralized data management and advanced reporting.

 

 

(b)         What are the advantages of computerised accounting? 3

 

Answer: Computerized accounting enhances accuracy, efficiency, and accessibility. It minimizes errors, streamlines processes, and enables remote data access. Automation reduces manual effort, increasing productivity. Moreover, it offers sophisticated data analysis capabilities through reporting tools, facilitating informed decision-making and enhancing overall financial management.

 

 

(c)          What is the difference between single user and multi user widely used popular accounting software?            3

 

Answer: Single-user accounting software allows access and usage by only one user at a time, restricting simultaneous usage. Examples include Tally.ERP 9 in single-user mode, and QuickBooks Desktop. Multi-user accounting software permits multiple users to access and work on the software simultaneously, enhancing collaboration and productivity. Examples include QuickBooks Online and Tally.ERP 9 in multi-user mode.

 

 

(d)         What is the purpose of password in vault in a widely used popular accounting software?                3

 

Answer: In widely used accounting software like Tally, a password in the vault serves to safeguard sensitive financial data. It ensures that only authorized users can access and manage critical information, maintaining confidentiality and preventing unauthorized access or tampering, thereby upholding the security and integrity of the accounting system.

 

(e)         What is TDS and when it is applicable?                   3

 

Answer: TDS (Tax Deducted at Source) in India is a tax collection mechanism where tax is deducted from various payments. TDS under Income Tax mandates employer a deduction of tax at specified rates from various income payments of the employee. TDS (Tax Deducted at Source) is applicable in India when specified payments are made, including salaries, interest, rent, commission, or professional fees, exceeding threshold limits set by the Income Tax Department.

 

(f)           Differentiate between ready to use and tailored accounting software. 3

 

Answer: Ready-to-use accounting software is off-the-shelf, with pre-configured features suitable for general accounting needs, like Tally.ERP9 . Tailored accounting software is customized to specific business requirements, offering personalized functionalities and integration with existing systems, like custom-built ERP solutions, addressing unique business needs with greater precision.

References:

For references, you might explore academic journals or industry publications like the Journal of Accountancy, Accounting Today, or the Harvard Business Review. Additionally, online resources such as the official websites of accounting software providers or accounting forums could offer valuable information and discussions on accounting software selection, features, and best practices.