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June 1992

Microcomputers 101: understanding the basics. (refresher on the many uses of computers in business) (The CPA & the Computer)

by Feder, Leonard

    Abstract- Personal and desktop computers have become indispensable office equipment in accounting firms. These powerful machines have revolutionized business computing and information management by their variety of applications. These PCs are equipped with internal memory and disk capacity through the workings of the microprocessor chip, which determines the varying degrees of sophistication, speed and applicability of PCs. These PCs often house disk drives through which data are stored in floppy diskettes or in magnetic tape cartridges as back-up copies for security purposes. The basic PC would have a monitor, that can be either monochrome or colored, and is often attached to a printer, either of the dot matrix or laser-type. The PC can also be attached to a modem to facilitate inter-PC communication, the downloading of data, and provide online support when servicing clients.

Most business computers are IBM PCs or compatibles. These machines and their peripherals and software adhere to a set of standards originally developed by IBM. These standards are well-documented and well- understood. There are thousands of vendors and tens of thousands of software packages available for PC-compatible machines.

Using PC-compatible computers guarantees a business easy access to new hardware and software products as they are developed. A business need not be locked into a single brand or vendor and can always expand or replace computers and accessories as needed. Since PC compatibles have become so standardized, differences among competing brands can be subtle. Nevertheless, there are variations in computing speed, expandability, reliability, ease of repair, and occasionally compatibility.

Computing Speed

PCs are measured in terms of computing speed, internal memory, and disk capacity. Computing speed is measured in megahertz (MHz), or millions of cycles per second. This is the pulse rate of the computer, and relates to how fast it can perform calculations. The first IBM PCs operated at 4.77MHz. Today most PCs operate between 10 and 33 MHz.

There are several classes of PC-compatible microcomputers, denoted by the type of microprocessor chip (or CPU) on which the system is based. Manufactured primarily by Intel Corp., this chip is the "brain" of the computer. The chips currently used in most microcomputers, in order of increasing cost and sophistication, are the 8088, 80286, 80386SX, 80386, and 80486.

The original IBM PCs introduced in 1981 used 8088 chips. IBM's AT, a more advanced computer introduced in 1984, used an 80286. Systems based on the 8088 are generally underpowered for current applications. Even 80286 machines can be underpowered and sometimes incompatible with more sophisticated applications. 80386SX machines are usually well-suited for use as business workstations, while 80386 and 80486 based systems are best suited to tasks requiring unusually large computing power.

Memory Storage

Computers use memory known as RAM (random access memory) to hold programs and data. This memory is erased when you switch from one task to another or turn the computer off. RAM is not suited for long term storage.

Memory is measured in megabytes (MB), each slightly more than a million characters. Most modern PCs have one or two MB of RAM, which is enough for most applications. This RAM can always be expanded to four or more megabytes.

Disk storage is used for long-term storage of programs and data. Disks retain their data for years, even after the power is removed. They are slower than RAM--access times are measured in thousandths instead of millionths of a second. However, their low cost per megabyte and high reliability make them appropriate for mass storage of data.

Almost all PCs have a flexible or "floppy" diskette drive that uses small, square plastic diskettes to store data. These come in two sizes, 5 1/4'' and 3V2" (the 3 1/2" disk stores more data, typically about one million characters). A hard disk drive is a faster, larger storage device. While the diskettes that go into a floppy drive can be taken in and out, the hard drive generally has no removable parts. Hard drives can range in size from 20 to 1000 MB or more. Hard drives are usually 10 to 20 times faster than floppy drives.

Data Security

Although disks rarely lose data by themselves (they can actually find and correct their own occasional random errors), it can happen. Data can also be destroyed by users who inadvertently or maliciously instruct the computer to delete files. Disks can be damaged by extreme heat or magnetic fields. Computers are also subject to fire, theft, water damage, and other disasters.

For these reasons, most companies create backup copies of their data. These are usually saved on inexpensive 1/4" magnetic tape cartridges, similar to audio tapes. These can be stored in a safe or at another location. Some insurance companies require businesses to do this with important data.

A 1/4" magnetic tape backup is a peripheral that attaches to a computer to create back tapes and restore data if necessary. Backups can be set up to occur automatically every day, week, etc. For a moderately- sized system, a backup of 10 to 50 megabytes can take 20 to 40 minutes.

Computer Peripherals

Businesses generally use two kinds of printers, dot-matrix and laser printers. A dot-matrix printer forms characters from small dots created by a row of nine to 24 metal pins on a moving printhead. These printers are fast (often as high as 300 characters per second) and inexpensive. Their costs per page printed are also low. Although dot-matrix letter quality has improved in recent years, documents printed on most of these printers still look "computer printed."

Laser printers are more expensive. Their print is usually indistinguishable from and often finer than that of a good typewriter. Although laser printers have a higher cost per page, their speed and quality surpass that of most dot-matrix printers. Both types of printers can print graphics.

Printers connect to computers through "serial ports" or "parallel ports," which are standard connectors in most computers. Other types of printers include daisy wheels, ink jets, and thermal transfer.

Computer monitors are either monochrome (white on black, amber on black, or black on white) or color. Color monitors are more expensive, often two to five times the price of a similar monochrome monitor. Different people find the different kinds of monitors to be more or less straining to their eyes. Monitors can be equipped with screens to cut glare or reflections. Monitors connect to computers through video interface cards, which must be matched to the monitor type.

A modem is a device that allows the computer to communicate with other computers over a telephone line. Using a computer with a modem, a user can communicate with and download data from other computers, commercially available database services, and public computerized "bulletin boards."A modem connection can be used to provide online support without making clients wait for a service person. This way firms can help a client through a problem on his or her own computer screen.

Modems are rated by their speed in "baud." For example, a typical 2400 baud modem transmits about 240 characters per second over the telephone line. A faster modem will save time and money on telephone bills and connection charges to database services. Slower modems operate at 1200 baud, and faster ones at 4800 or 9600 baud. Powerful modems can compress your data to go as high as 14,400 to 19,200 baud on a normal phone line.

By Jonathan Firester, President, and Leonard Feder, Senior Consultant, both of Niederhoffer, Firester & Co., a computer accounting consulting firm in New York, NY.



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