Topics in AccountsCharacteristics of Double Entry System Examples on the Principle of Double Entry System Advantages and Limitations of the Double System in Accounting Scheme of work, Financial Accounting, SS1, Third Term Scheme of work, Financial Accounting, SS1, Second Term Scheme of work, Financial Accounting, SS1, First Term Differences between Bookkeeping and Accounting Journal - Contents, Format, Characteristics and Advantages of Journal Bank Wire and Wire Transfer Chart of Accounts Meaning, Importance, Processes, Examples and Steps in Balance Sheet Reconciliations
Academic Questions in Accounts
Which of the following statement is true concerning bank wire?
A. Another name for bank wire is cash transfer
B. The term 'wire' in bank wire signifies a computer based programmed message sent to a bank customer in regards to their account information, transaction and other important financial notifications
C. The International Bank Account Number (IBAN) must always be involved when carrying out a bank wire process
D. The term bank wire has no significant relationship with wire transfer
E. Cyber criminals cannot utilize bank wire threats like CSRS, phishing and whaling to achieve their fradulent act
F. All the above statements are true
The following are recommendations to follow during the process of balance sheet reconciliation EXCEPT _____.
A. All balance sheet accounts should be reconciled periodically, quarterly or annually
B. Comparing the trial balance of both the payables and receivables with the respective aging schedule
C. Analysis of enteries and relocating them to a sub-ledger if need be
D. Comparing the general ledger trial balance of the account to another source; for instance, a bank statement
E. Analysis of the differences in both accounts and making appropriate correction to ensure the correctness of entered information
F. None of the above
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Although bookkeeping and accounting involves financial data; they are not the same thing.
In a large business organization, financial transactions occur on a regular basis and at a high rate; and as a result, an accounting personnel may not be able to efficiently enter all the business transactions. For this reason, the services of a bookkeeping personnel or bookkeeper may be required.
Bookkeeping can be defined as all the activities that have to do with the orderly classification and recording of financial data or business transaction.
Bookkeeping assist the process of accounting via the taking of an accurate record keeping.
Accounting covers the entire process and practice of managing the finances of an individual or an organization.
Note: In smaller organizations, a bookkeeper’s job may go beyond simple transaction recording, as they may also be involved in the accounting process of the organization. On the other hand, accountants may have to record financial transaction in addition to analyzing financial transaction.
Below are some of the differences between bookkeeping and accounting:
Bookkeeping: It deals with the orderly classification and recording of financial data.
Accounting: It covers the entire practice of finance management.
Bookkeeping: It is only a branch of accounting.
Accounting: It is financial management in itself. It has various subset or branches of which bookkeeping is just one of them.
Bookkeeping: Financial decisions cannot be taken on the basis of bookkeeping alone.
Accounting: Account records serves as the basis on which financial decisions can be taken.
Bookkeeping: It cannot be used to determine the status or strength of an organization.
Accounting: It shows the financial strength or status of any institution.
Bookkeeping: It is not necessarily required to make a financial statement of account.
Accounting: It is required in the making of a financial statement.
Bookkeeping: Journals and Ledgers are related to bookkeeping. Please read on Journals, its Characteristics and Advantages here.Accounting: Profit and Loss Account, Balance Sheet and Cash Flow Statement are related to accounting.
Bookkeeping: Single Entry System of Bookkeeping and Double Entry System of Bookkeeping.
Accounting: Financial Accounting, Cost Accounting, Human Resource Accounting and so on.
Bookkeeping: The bookkeepers record financial transaction in a chronological order (order of occurrence). The bookkeepers are therefore considered to lay the foundation on which accountants build on.
Please read on Balance Sheet Reconciliations here.
Note: Nowadays, softwares are present that can easily and efficiently carry out bookkeeping functions. The use of bookkeeping software can be expensive and slow while the amount of storage may become exhausted.
Accounting: They analyze financial transactions in order to give an accurate result and status of a business. Such reports will assist the business managers in making a more informed decision.
Please read on Meanings and Types of Business Structures here.
Some acountants may review the job done by the bookkeepers while also advising them on the right way to go about their job.
Bookkeeping: They earn lower salaries when compared to accountants.
Accounting: They earn higher salaries than the bookkeepers.
It brings accuracy into the recordings of the daily business transaction.
They provide the information on which financial accounts are prepared.
Aside from its importance in business organizations, it can also be used by nonprofit organizations and individuals.
It can also take record of liabilities, assets, loans. This function of bookkeeping can be crucial for many businesses.
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Amazing facts in Accounts
It is believed that Bookkeeping is the only English word to contain three sets of double letters repeatedly.please read our article on bookkeeping vs Accounting here
NOTABLE POINTS IN Accounts