Information and communication technology (ICT) in accounting (A Level) flashcards

Topic 2.9: Information and communication technology (ICT) in accounting

EPOS

Electronic Point of Sale: a till system that records each sale, usually by barcode scan, and updates the inventory record at the same time.

Audit trail, and how it differs from an audit

The ability to trace a transaction from its source document through the records to the financial statements, and back. The trail is the record; the audit is the examination that uses it.

Spreadsheet vs accounting package

A spreadsheet is a flexible model the user builds. An accounting package follows fixed accounting routines and posts double entry to the ledgers automatically.

What-if analysis, and why assumptions sit in their own input cells

Changing one assumption in a model to see its effect on the results. With inputs in their own cells, only one cell changes and every formula updates from it.

Aged debtors list: what it is and what management learns from it

Trade receivables listed by customer and by how long amounts have been owed. It shows whom to chase, whose credit to stop, and a basis for the allowance for irrecoverable debts.

The four aspects of ICT's advantages and disadvantages in 2.9.2

Audit trail, financial, technical and human aspects.

An ICT system has one-off costs of 8,400 and a net annual saving of 5,600. Payback?

8,400 ÷ 5,600 = 1.5 years. Net saving = annual savings − annual running costs.

Why might the EPOS inventory record be higher than the shelf count?

Unscanned loss: theft, damage, or an item sold but not scanned.

Does ICT guarantee accurate accounting information?

No. It guarantees accurate arithmetic, not accurate information: input and formula errors still flow through.

Sales tax charged to customers 4,830; sales tax paid to suppliers 2,915. Amount payable?

4,830 − 2,915 = 1,915. The package draws both totals from entries already posted.