- 5 Marks
Question
a) An efficient and effective coding system, whether manual or computerized should incorporate certain features.
Required: Identify and explain FIVE features of a good coding system.
(5 marks)
Answer
The requirements for an efficient coding system:
- Every number used in the code should be unique and certain, i.e. it should be easily identified from the structure of the code.
- Elasticity and comprehensiveness is an absolute must for a well-designed coding system. It should be possible to identify a code for every item and the coding system should be capable of expanding to accommodate new items.
- The code should be brief, meaningful and significant.
- The maintenance of the coding system should be centrally controlled. It should not be possible for individuals to independently add new codes to the existing coding system.
- Codification systems should be of the same length. This makes errors easier to spot and it assists computerized data processing.
- The coding system must allow for expansion.
- The likelihood of errors going undetected should be minimized.
- If the code consists of alphabetic characters, it should be derived from the item’s description or name (ie mnemonics should be used).
- There should be readily available index or reference book of codes.
- Existing codes should be reviewed regularly and out-of-date codes removed.
(Any 5 points for 5 marks)
- Tags: Accuracy, Coding Systems, Data Organization, Efficiency, Information Management
- Level: Level 2
- Topic: Introduction to management accounting
- Series: NOV 2017
- Uploader: Dotse