Q15 define the terms book keeping accounting and

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Q.15. Define the terms ‘Book Keeping, Accounting’ and ‘Accountancy’.
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4 Address: Plot No 420, Behind Shopprix Mall, Vaishali Sector 5, Ghaziabad 201010 M: 9999907099, 9818932244 O: 0120-4130999 Website: , Ans. The terms ‘Book keeping’ and ‘Accounting’ are often considered as same. But it is not so. The two terms are distinct from each other. Accounting is a wider concept and includes Book Keeping. Q.16. What is the meaning of Book Keeping ? Ans. Book keeping is a part of accounting being a process of recording of financial transactions and events in the books of accounts. Thus, Book keeping involves: 1. Identifying financial transactions and events, 2. Measuring them in terms of money, 3. Recording the identified financial transactions and events in the books of accounts,and 4. Classifying recorded transaction and events, i.e., position them into Ledger accounts. Q.17. Distinguish between Book Keeping and Accounting. Ans. Basis Book Keeping Accounting 1. Scope Book Keeping is concerned with indentifying Accounting is concerned with financial transaction; measuring them in money summarising the recorded terms; recording them in the books of accounts transactions, interpreting them and and classifying them. Communicating the results 2. Stage It is primary stage. It is the basis for accounting. It is a secondary stage. It begins where Book Keeping ends. 3. Objective The objective of book keeping is to maintain The objective of accounting is to Systematic records of financial transactions. Ascertain net results of operations Financial position and to Communicate information to the Interested parties. 4. Nature of Job This job is routine in nature. This job is analytical and dynamic in nature.
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5 Address: Plot No 420, Behind Shopprix Mall, Vaishali Sector 5, Ghaziabad 201010 M: 9999907099, 9818932244 O: 0120-4130999 Website: , 5. Performance junior staff performs this function. Senior staff performs this function. 6. Special skills Book Keeping is mechanical in nature Accounting requires special skills and and, thus, does not require special skills. ability to analyse and interpret. Q. 18. Define Accountancy. Ans. Accountancy is a systematic knowledge of accounting. It explains how to deal with various aspects of accounting. It educates us how to maintain the books of accounts and how to summarise the accounting information and communicate it to the users. In other words of Kohler, accountancy refers to the entire body of the theory and practice of accounting. Q.19.What are the Main Objectives and functions of accounting ? Ans. The main objectives of accounting are:- 1. Record of Financial Transactions and Events: The objective of accountancy is to record financial transactions and events of the organisation in the books of accounts following the principles of accounting in a systematic manner.
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