(a) Outline two differences between…

Question 1 Report

(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

Answer

Answer Details

(a) Two differences between bookkeeping and accounting

Bookkeeping	Accounting
It is the routine recording and classifying of financial transactions in the books.	It is wider: it summarises, analyses, interprets and communicates the recorded information.
It is largely clerical and mechanical work.	It requires greater skill, judgement and analysis.
It ends where the trial balance is drawn up.	It begins where bookkeeping ends, preparing and interpreting final accounts.

(Any two.)

(b) One source document for each transaction

(c) Three purposes of source documents

They provide documentary evidence that a transaction actually took place.
They serve as the basis for making entries in the books of original entry.
They give the details of a transaction (date, parties, quantity, amount) for reference and checking.
They provide an audit trail and help in verifying and controlling transactions against fraud.

(Any three.)

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