Computer programs are the instructions that tell the electronics how to process data. The general term used for these is software.
Some application software is devoted specifically to an accounting task, for example a payroll package, a fixed asset register or a stock control package.
Other applications have many uses in business, including their use for accounting purposes. Packages of this sort that we shall describe are databases and spreadsheets.
One of the important facts to remember about computerized accounting is that in principle, it is exactly the same as manual accounting.
Accounting functions retain the same names in computerized system as in more traditional written records. Computerized accounting still uses the familiar ideas of day books, ledger accounts, double entry, trial balance and financial statements. The principles of working with computerized sales purchase and nominal ledgers are exactly that would be expected in the manual methods they replace.
The only difference is that these various books of account have become invisible. Ledgers are now computer files which are held in a computer-sensible form, ready to call upon.