CS Executive · Corporate Accounting and Financial Management · Introduction to Accounting
Which of the following is the most accurate statement about the scope of accounting versus book-keeping?
Book-keeping is mainly the recording of transactions in the books, while accounting is wider and also covers classifying, summarising, analysing and interpreting them to give financial statements and decision-useful information. The options that reverse or equate the two are incorrect.
- ABook-keeping is mainly recording of transactions, while accounting also covers summarising, analysing and interpreting themCorrect
- BBook-keeping includes preparation of financial statements and their interpretation, while accounting is only ledger posting
- CBoth are identical in scope and differ only in name
- DAccounting ends with the journal entry, whereas book-keeping covers final accounts
Explanation
Book-keeping is the clerical activity of recording and maintaining books. Accounting begins where book-keeping ends and extends to summarising, preparing statements, analysing and interpreting results. The other options reverse or equate the two.
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