Skip to content

CMA Foundation · Fundamentals of Financial and Cost Accounting · Accounting Principles, Concepts and Conventions

Which statement correctly distinguishes book-keeping from accounting?

Book-keeping is mainly the recording of transactions in the books, whereas accounting goes further by summarising, analysing and interpreting them and communicating results to users. Accounting therefore has a wider scope and builds on the records created by book-keeping.

  1. ABook-keeping includes interpreting financial statements, while accounting is only recording
  2. BBook-keeping is mainly the recording of transactions, while accounting also covers summarising, analysing and interpreting themCorrect
  3. CBoth are exactly the same activity with no difference in scope
  4. DAccounting is concerned only with cost data while book-keeping covers financial data

Explanation

Book-keeping is the clerical task of recording transactions in the books. Accounting starts where book-keeping ends and includes classifying, summarising, analysing and interpreting the data. The other statements reverse or confuse these roles.

Did you get it right without looking?

One question tells you little. A timed set on Accounting Principles, Concepts and Conventions shows your real accuracy, how long you take and where you lose marks.

Practise Accounting Principles, Concepts and ConventionsFree diagnostic mock

More Accounting Principles, Concepts and Conventions questions