(a) Outline two differences between bookkeeping and accounting (b) List one source document used for each of the following transactions: i. sales ii. purcha...

(a) Outline two differences between bookkeeping and accounting

(b) List one source document used for each of the following transactions:
i. sales
ii. purchases
iii. cash deposit
iv. salary
v. returns outwards

(c) State three purposes of source documents

Answer Details

(a) Two differences between bookkeeping and accounting are:

1. Scope: Bookkeeping is concerned with the recording of financial transactions, while accounting involves the interpretation and analysis of financial information to make business decisions.
2. Complexity: Bookkeeping is a relatively straightforward process that involves recording financial transactions in a systematic manner, while accounting requires more specialized knowledge and skills, such as financial analysis and reporting.

(b) One source document used for each of the following transactions are:

1. Sales - Sales invoice
2. Purchases - Purchase invoice
3. Cash deposit - Deposit slip
4. Salary - Payslip
5. Returns outwards - Credit note

(c) Three purposes of source documents are:

1. Evidence of transactions: Source documents serve as evidence that a financial transaction has taken place, and provide a record of the details of the transaction, such as the date, amount, and parties involved.
2. Recording of transactions: Source documents are used to record financial transactions in an organized and systematic manner, which helps to ensure that transactions are accurately recorded and can be easily tracked and analyzed.
3. Verification and reconciliation: Source documents are used to verify and reconcile financial transactions, which helps to ensure that there are no errors or discrepancies in the accounting records. This is important for ensuring the accuracy and reliability of financial information, which is essential for making informed business decisions.