PART 1

Will Gates is planning to create a computer-based accounting system for small businesses. His system will be developed from a database program and will be suitable for use on personal computers.

The idea underlying database software is that data needed for a variety of uses is entered into the database only once. The computer is programmed to arrange this data into any number of desired formats. In the case of Gates accounting system, the companys accounting personnel must enter the relevant information about each business transaction into the database. The program Gates plans to write will then enable the computer operator to have information arranged by the computer into the formats of the accounting cycle.

1. Identify the relevant information about each business transaction that the companys accounting personnel must enter into the database to enable Gates program to prepare the types of accounting records and statements described in the accounting cycle.
2. As described in the text, the accounting cycle includes steps. Indicate which of these functions can be performed automatically by Gates computer program and which must still be performed manually by the companys accounting personnel.