Introduction To Accounting — Flashcards

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A business transaction is an exchange of goods, services, or any other activity for money or money's equivalent. It also includes exchange of money. It is an event of financial nature connected with b…

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A businessman cannot remember a large number of daily transactions. Written records help in knowing profit, amount payable to suppliers, and amount receivable from customers later.

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Book-keeping means maintaining proper records of business transactions. It is concerned with recording financial data in a significant and orderly manner.

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Accounting is the process of recording, classifying, and summarizing financial transactions in a systematic manner, and then interpreting the results. It helps in understanding profit or loss and fina…

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Accounting communicates the financial results of business to owners, creditors, investors, employees, government, and other users. Just as language helps people communicate, accounting helps business …

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No. Book-keeping is only the recording stage and has a limited scope. Accounting is broader; it includes recording, classifying, summarizing, interpreting, and communicating financial information.

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Book-keeping is the primary stage, mainly mechanical, and done mostly by lower level account clerks. Accounting is the final stage, involves analysis and interpretation, and is done by higher level qu…

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Book-keeping has a limited scope because it mainly records transactions. Accounting has a wider scope because it also classifies, summarizes, interprets, and communicates financial information.