AccountsISC Class 11 · Computerised Accounting System

Accounting Information System and Accounting Software: ISC Class 11 Accounts

Updated 17 October 2026 · Fact-checked

An accounting information system (AIS) collects, records, processes, stores and reports financial data as information for decisions. In a computerised AIS the inputs are vouchers, the processing is automatic posting and summarising, and the outputs are ledgers, statements and reports. Accounting software may be ready-made, customised or tailor-made, and works with masters and vouchers under security and backup controls.

Vouchers go in, are posted automatically, stored, and come out as reports, while controls protect every stage.

Illustration drawn for QuestionBuddy.

Understand Accounting Information System, Accounting Software and the Processing Cycle

AIS. A system of people, records, procedures and tools that converts financial data into information for owners, managers, lenders and the tax department. Functions: collect, record, process, store, report and control.

Processing cycle. *Input:* vouchers entered through screens. *Processing:* validation, classification and automatic posting to ledgers, calculation of balances. *Storage:* data files and backups. *Output:* ledger accounts, trial balance, profit and loss account, balance sheet, stock and debtor reports, and graphs.

Masters and vouchers. *Masters* are permanent records created before transactions: account groups, ledgers, items, parties. *Vouchers* record transactions: receipt, payment, journal, contra, purchase and sales vouchers.

Types of software. *Ready-made (packaged):* bought off the shelf, cheap, standard. *Customised:* ready-made software modified to suit the business. *Tailor-made:* written specially; costly, takes time, fits exactly.

Modules. Ledger and vouchers, inventory (stock), payroll (salaries), bills receivable and payable, tax (GST) and bank reconciliation. Integration means one entry updates every related module.

Controls. *Input controls:* validation (debit equals credit, date within period). *Access controls:* passwords, user rights. *Backup and recovery:* regular copies kept off site. *Audit trail:* a log of who entered or changed what.

Choosing software. Check the needs of the business, cost, ease, reports, security, support, scalability and updates.

Output as information. Information is data made meaningful: a total of Rs 5,00,000 sales per month becomes useful when compared with the target.

Accounting Information System, Accounting Software and the Processing Cycle: key facts

Processing cycle: Input vouchers
Processing posting, validation
Output reports; Three stages.
Software types: Ready-made standard
Customised modified
Tailor-made written to order; Cost rises along the list.
Control check: Total debit = Total credit | Entry accepted only when equal; Built-in validation.

Input	vouchers
Processing	posting, validation
Output	reports

Ready-made	standard
Customised	modified
Tailor-made	written to order

How to answer Accounting Information System, Accounting Software and the Processing Cycle questions

Explain with the cycle and give one business example per point.

1Define AIS or the software term first.
2Describe in order of input, processing, output.
3Add controls or types as asked.
4Close with one line on suitability.

Accounting Information System, Accounting Software and the Processing Cycle in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Choosing software

Suppose a medical store with 15,000 items needs a billing and stock system, while a tailor needs only a daybook.

Which type of software suits each?

Try it first, then show the solutionSolution

The store needs inventory, billing and expiry tracking: customised or tailor-made software with an inventory module.
The tailor can use cheap ready-made software.

Answer: Store: customised or tailor-made; tailor: ready-made.

Memory hook: Bigger needs, closer fit.

Tricks to remember Accounting Information System, Accounting Software and the Processing Cycle

Short memory aids. Say each one aloud once, then use it on a question the same day.

IPO
Input, Processing, Output.
Use it when: Cycle.
R-C-T
Ready-made, Customised, Tailor-made: cost rises.
Use it when: Software types.
Masters first
Create masters before vouchers.
Use it when: Setup.

Accounting Information System, Accounting Software and the Processing Cycle: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Software type · 1 mark · MCQBoard level

Software written specially for one business to its exact needs is called:
(a) ready-made (b) customised (c) tailor-made (d) shareware

Try it first, then show the solutionSolution

Written to order: tailor-made.

Answer: (c) tailor-made

Example 2: Processing cycle · 4 marks · Short answerBoard level

Explain the data processing cycle in an accounting information system with the output reports. (4 marks)

Try it first, then show the solutionSolution

Input: vouchers entered.
Processing: validation and automatic posting.
Storage and backup.
Output: ledgers, trial balance, statements.

Answer: Vouchers are input; the software validates and posts them; data is stored and backed up; reports such as ledger, trial balance and balance sheet are output.

Example 3: Voucher validation · 4 marks · Short answerHarder board level

A software accepts a journal voucher only if debits equal credits. Which of these is accepted? (A) Dr Rent 5,000; Cr Cash 5,000. (B) Dr Purchases 12,000; Cr Creditor 9,000; Cr Discount 2,000. (C) Dr Bank 20,000; Cr Sales 18,500; Cr GST 1,500. Give reasons and the amount of the rejected voucher's imbalance. (4 marks)

Try it first, then show the solutionSolution

A: 5,000 = 5,000, accepted.
B: credits 9,000 + 2,000 = 11,000 against debit 12,000, rejected, imbalance Rs 1,000.
C: 18,500 + 1,500 = 20,000, accepted.

Answer: A and C are accepted; B is rejected with an imbalance of Rs 1,000.

Example 4: Choose the software · 5 marks · Long answerHarder board level

A business with 8 users needs a system costing: ready-made Rs 40,000 with Rs 6,000 per year support; customised Rs 1,10,000 with Rs 10,000 per year support; tailor-made Rs 2,50,000 with Rs 15,000 per year. Find the 5-year total cost of each and the average cost per year. (5 marks)

Try it first, then show the solutionSolution

Ready-made = 40,000 + 5 x 6,000 = Rs 70,000; per year 14,000.
Customised = 1,10,000 + 5 x 10,000 = Rs 1,60,000; per year 32,000.
Tailor-made = 2,50,000 + 5 x 15,000 = Rs 3,25,000; per year 65,000.

Answer: Rs 70,000 (14,000 a year); Rs 1,60,000 (32,000 a year); Rs 3,25,000 (65,000 a year).

Example 5: Audit trail · 4 marks · Short answerHOTS / competency

A user changes the amount of an entry after the books were checked. How can an audit trail and user rights prevent hidden changes? (4 marks)

Try it first, then show the solutionSolution

The audit trail records who changed what and when, so the change is visible.
User rights limit editing of closed periods to authorised persons.

Answer: The log makes every change traceable, and rights stop unauthorised editing of checked entries.

Where students lose marks in Accounting Information System, Accounting Software and the Processing Cycle

The slips examiners see most often, and what to write instead.

Mistake: Confusing masters and vouchers
Both are inputs.
Wrong working
Voucher = account list
Right working
Masters = account list; vouchers = transactions
Do this: Masters are set up once.
Usually costs: 1 mark.
Mistake: Describing only output
Skipping the cycle.
Wrong working
AIS prints reports
Right working
AIS collects, processes, stores and reports
Do this: Cover all stages.
Usually costs: 1-2 marks.
Mistake: No example for software types
Definitions only.
Wrong working
Tailor-made is special
Right working
Tailor-made: written to order for a hospital
Do this: Give an example.
Usually costs: 1 mark.

Exam tips

Use IPO in answers about processing.
Always list at least two controls.
Compare the three software types in a small table.

Practice questions on Accounting Information System, Accounting Software and the Processing Cycle

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
A permanent record such as the list of ledger accounts is called a:
(a) voucher (b) master (c) report (d) backup
Hint
Created before transactions.
Answer
(b) master
Q2 · 3 marks · Short answerBoard level
Define AIS and state any three of its functions. (3 marks)
Hint
Collect, process, report.
Answer
An AIS collects, records, processes, stores and reports financial data as information. Functions: recording transactions, processing them, reporting to users, safekeeping and control.
Q3 · 4 marks · Short answerHarder board level
A software package costs Rs 90,000 and annual support Rs 12,000. Over 4 years find the total cost and the cost per year; compare with a tailor-made package of Rs 2,00,000 plus Rs 10,000 a year. (4 marks)
Hint
Four years each.
Answer
Package: 90,000 + 48,000 = Rs 1,38,000 (34,500 a year). Tailor-made: 2,00,000 + 40,000 = Rs 2,40,000 (60,000 a year). The tailor-made costs Rs 1,02,000 more over 4 years.
Q4 · 4 marks · Short answerHarder board level
A software rejects a purchase voucher: Dr Purchases 36,000, Dr GST input 6,480, Cr Creditor 42,000. Find the imbalance and correct it for GST at 18%. (4 marks)
Hint
18% of 36,000.
Answer
GST = 36,000 x 18/100 = 6,480 (correct). Debits = 42,480; credit is 42,000; imbalance Rs 480. The creditor should be credited with 42,480.
Q5 · 3 marks · Short answerHOTS / competency
A business says it will stop taking backups because the cloud service is "very reliable". Evaluate, and name two other controls it must keep. (3 marks)
Hint
Single point of failure.
Answer
Backups are still needed because of deletion, corruption or account problems; a second copy gives recovery. Other controls: user passwords with rights, and an audit trail.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.IPO stands for?Show answer
Input, processing, output.
2.Which software is written to order?Show answer
Tailor-made.
3.What is a master?Show answer
A permanent record such as the list of ledgers.
4.What is an audit trail?Show answer
A log of changes.
5.Why backup?Show answer
To recover lost data.

Accounting Information System, Accounting Software and the Processing Cycle: frequently asked questions

Does AIS replace the accountant?

No.

Is a voucher a master?

No, it records a transaction.

Is integration useful?

Yes, one entry updates all modules.

What does GST module do?

Calculates and reports tax.