ABSTRACT

CHAPTER ONE

INTRODUCTION

     1.1     Background of the study

From the earliest times man has looked for ways to make everyday tasks easier. There was a time in history when all calculations and computations that people did were done by hand. It was a time consuming and difficult way to perform these tasks. Scientists and inventors of the day took up the task of finding ways to complete these tasks. One of the leaders of this challenge was Charles Babbage.

Charles Babbage was an English mathematician and inventor who was looking for an easier way to compute. In the early 19th Century, he created the idea of a programmable computer. His work with early computing machines earned him the nickname of "Father of the Computer". While his work was a far cry from our computers of today, it was an important first step in the coming technology that we now enjoy.

Charles Babbage's programs for his Analytical Engine in the 19th century are often considered the founding of the discipline, though mathematicians' efforts remained theoretical only, as the technology of Babbage's day proved insufficient to build his computer. Alan Turing is credited with being the first person to come up with a theory for software in 1935,

The origins of software architecture as a concept were first identified in the research work of Edsger Dijkstra in 1968, and David Parnas in the early 1970s. The scientists emphasized that the structure of a software system matters and getting the structure right is critical. The study of the field increased in popularity since the early 1990s, with research work concentrating on architectural styles (patterns), architecture description languages, architecture documentation, and formal methods

Until 1970th-80th the most common used system in accounting was “general ledger”. It was a book with assigned pages for each account, such as cash, receivables, payables, stockholder equity. Everyday transactions were entered by hand into a journal. After each transaction entry had to be posted in a proper general ledger account on the assigned page (Hous). Next step was an input of the numbers from general ledger into financial statements and preparing tax returns. All these processes where inefficient, slow, and manual. Even a minor mistake or inaccuracy in these processes led to long time spent for recalculations (Hous).

Through the 20th century developments in computing, data modeling, and telecommunications influenced accounting processes significantly. The first mention of the term “systems” regarding accounting emerged in the 1920’s and was used widely in mass-media. At the same time many scholars considered that development of computerized accounting systems technologies had begun even earlier. For example in 1890s, to meet needs of cost accounting, calculating machines, such as Hollerith device, were created (Badua, Watkins 3). According to Badua and Watkins, some inventions went even in reverse directions when particular area of accounting facilitated the creation of specialized machines or technology.

Invention of accounting software revolutionized accounting processes. Multiple developments forerun present-day technologies. A countess Ada Lovelace computing machine was the first machine created and used for accounting. The IBM 9Pac was one of the first programming systems that preceded the invention of many modern accounting systems (Novinson). SAP software was created in 1973 and provided opportunities not only for automated financial transactions but also for supported executive decision making. Before the invention of Peachtree program, all accounting computerized programs were unavailable for broad public. Peachtree was the first program sold in stores and accessible for everyone (Novinson).

In 1983 company Intuit introduced a computerized computing program for personal finance Quicken. After that TurboTax for calculation of federal and income taxes and QuickBooks for small business accounting purposes were presented to wide public (Novinson). At this point of the development of accounting technologies manual journal entries were left in the past and computer technologies made profession of accountant easier. Accounting software gave an opportunity to professional accountants to do their job faster and more productive. At the same time owners of small businesses, who had limited knowledge in accounting area, could keep their financial statements in order to use an accounting software (Hous).                                                                                   

     Accounting computation is obviously not an easy task to fill and reckon manually. This problem prompted the need for the design and implementation of a computer accounting system of a Non-profitable accounting organization in which the accounting system would be computerized. Consequently, this will affect the prompt release of the result of the financial statement and improve the decision making of the organization. One indisputable face about our presence society is independence of electronic computing, so much of the work done in the past has been heavily laid on the manual computing system, and therefore taking the manual system into an electronic system will be a better approach.                    

In a large organization such as the Jireh Doo foundation, Makurdi the account system is the life wire of the administration not respecting the fact that it is a non-profitable organization.  It is through proper accounting, that the management can find out their financial performances and the information gotten help them in planning future routine strategies.

Jireh Doo foundation, Makurdi is a non-profitable organization, housing other groups, like the flower group, labour group, and catering group. They raise funds within themselves, from the sales of books, willingly, and through individual pledges.

This project is on a computer based accounting system using “Jireh Doo foundation, Makurdi” as a test case.  This accounting software attained some degree of flexibility.  It is intended to track all source of revenue (i.e. money coming in) and expenditure (i.e. liabilities).  It is a user-friendly accounting package, which manages the daily accounting operations and provides for the security of the information in the system, input data validation and restricts access to some vital management information.

This software is able to generate reports on demand and statements needed by management for its decision making while promoting the organization functional establishment.  This report ranges from individual donations statement of account, trial balance sheet, debtors & debts to profit and loss account within a specified data interval.  The report could be viewed on the screen or printed on paper as desired by user.

1.2     Statement of the problem

Before now, Jireh Doo foundation, Makurdi has been using manual method of accounting system.  This system is characterized with many problems which necessitated its computerization. Among these problems are:

1. In-concurrency of entered data: due to human error, the accountant, after entering the right data from the invoice to the appropriate journal, may come back to post-incorrect amount to the general ledger.
2. Inaccurate calculation: this is a situation where the necessary addition is not able to balance with the corresponding subtractions. This human error might be due to fatigue.
3. Fraud: manual accounting system is prone to fraud.  This is through the distortion of data in the account book, cause by unauthorized access to the book and its insecurity.
4. Poor documentation and distorted record keeping: this is a situation, where the account books cannot be stored for a long period of time.

1.3      Aim and objective of the study

This study has the aim of designing and implementing a computerized accounting package. This accounting system will attain some degree of flexibility, be able to produce the required report on demand, be reliably effective and accurate. This project is aimed at producing optimal solution to the problems inherent in manual system of accounting in Jireh Doo foundation, Makurdi.  The objectives include.

1. Ease (simplicity): having a computerized accounting system at Jireh Doo foundation, Makurdi the work of the accountant and his co-workers will reduced to a minimum.  The job becomes simpler and easier to tackle and can be accomplished within a short period of time.

• ii Effectiveness: the old system is intended to be computerized, so that it is operations could be performed faster and reports generated on demand for quicker decision making by the management.
• iii Accuracy: to be able to obtain at any point in time, an error-free and up-to-date financial state of the organization. An accurate and timely financial statement or information is a good tool for such decision-making.
• iv Redundancy: using the computerized accounting software saves the organization the burden of creating more than one file, for a particular item (i.e. of similar content).  The system should be able to detect existing entries and not produce copies unless the former to deleted.
• v Efficiency: this accounting package will reduce access time to stored data, as inquiring could be made and information gotten without stress.
• vi Neatness: using this software, a neat, tidy and error-free report will be obtained.  Also work free of mutilation and cancellations will be produced.  The output gives joy and contentment to one who uses it.

1.4      Significance of the study

To reveals the relevance of this computer software and its accessory as opposed to the manual accounting processing and data storage. Daily transactions are entered in their respective destinations and accounts balanced accordingly.  These entries are posted or transferred to the general ledger module, which is an integration of other subsidiary module.  The general ledger is the powerhouse of the system.

At the end of each accounting month/year, the financial statements are produced, neat and error-proof. These include income statement (income and expenditure account) and balance sheet.

The calculations necessary for the accurate and speedy as well as neat production of these statements are also taken into consideration.

To help the organization and the information users for efficient computation of the accounting system. Hence it is authentically narrowed to solve the problems of manual systems.

1.5     Scope of the study

This study will produce a computer based program that will be used for the accounting system of a non-profitable organization. This project is intended to cover the methods of fund raising and services rendered.  It deals with the entry of money or transaction made within the account department.

Thus, the package is poised to present an easy and efficient accounting system for Jiree Doo foundation, Makurdi. It saves the organization time in computing their accounting record.

It will cover how revenue is been generated from the sales of books, willingly, and through individual pledges and how resources are being expedited within the organization.

1.7      Definition of Terms

1. Account Payable: Amount you are owing salary earners.
2. Account Receivable: Amount made by pledges to be redeemed.
3. Invoice: A document prepared by a supplier, requesting payment for goods and services provided.
4. Debit: Money that is going out or being given out appears on the left-hand side of an account.  All applications of money are debit.
5. Balance Sheet: A financial statement that shows the financial position of a business at a particular date.
6. Expenditure: this is a payment of cash, or cash equivalent for goods and services, or charge against available funds in settlement of an obligation as evidence by an invoice, receipt, voucher, or other such documents.
7. Revenue:  this is an income that a business has from its normal business activities, usually from the sale of goods and services to the customers.