Question

Accounting starts where Bookkeeping ends. Elaborate on this statement by giving a proper explanation. (3 marks)
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Answer 1

Answer:

Accountancy:

Accountancy begins where book-keeping ends. It means, accountant comes with the picture where book-keeper has done his job. The accountant performs the following functions:

Checking the work of the book-keeper,

Preparation of trial balance,

Preparation of financial statements e.g. Profit & Loss account and Balance Sheet,

Passing ratification entries and making necessary adjustments.

Thus, accountancy is .concerned with classification and summarization of financial records and it is semi-analytical in nature. Its main object is to compile and analyse the business records. The accountant may or may not be an employee of the business. He has knowledge of book-keeping and accounting principal and practices.