Accounting Method

There are three methods for processing accounting data. Although the methods are different, the basis is the same, that is, transactions are recorded on a double-entry system. The differences between the methods are generally with regards to the collecting, processing and storing of the data.

Manual Method
1. Accounting operations are done manually without the assistance of mechanical or electronic devices.
2. The data processing is slow and much time will be dispensed to carry out the routine work of accounting.
3. In terms of efficiency and precision, the manual method is comparatively more likely to present inconsistent and/or erroneous accounting data. As such, this accounting method is better-suited for small enterprises like food vendors.

Mechanical Method
1. The mechanical method incorporates the usage of accounting equipment such as calculators and the cash register system.
2. Accounting tools are used to facilitate accurate calculation. The effectiveness of using accounting tools in data processing is dependent on the efficiency and precision of the person handling such accounting tools.
3. It is a more precise and time-saving accounting method in comparison to the error-prone manual method and is tailored to medium-sized businesses which have larger accounting workloads.

Electronic method
1. The electronic method is the more advanced form of data-processing commonly carried out using a computer.
2. The disadvantages and limitations of manual and mechanical methods have led to the gradual move towards electronic methods. With electronic methods, accurate business information and updates can be easily obtained.
3. This method is only suitable for large businesses because of the high costs of obtaining, installing and maintaining the hardware. However, as the use of computers is common to every business industry in this modern day and age, the integration of the electronic accounting method is not too far-fetched for present-day technology.