Interested Parties Accounting vs Book-keeping

What is the purpose of book-keeping?

• to interpret the double entry records

• to prepare financial statements at regular intervals

• to record all the financial transactions of the business

• to summarise the financial position of the business

What are assets?

• items that are bought for long-term use by a business

• items that are expected to be turned into cash in the near future

• items that are owned by or owed by a business

• items that are owned by or owed to a business

Which tasks would be carried out by a book-keeper?

1 analysing business results

2 maintaining a cash book

3 preparing financial statements

4 writing up ledger accounts

• 1 and 2

• 1 and 3

• 2 and 4

• 3 and 4

Which task would be carried out by a book-keeper but not an accountant?

• comparing one year’s results with those of previous years

• interpreting the accounting records

• preparing financial statements

• recording transactions in the ledgers and cash book

What is the purpose of accounting?

• to ensure the cash book balance agrees with the bank statement

• to know how long trade receivables take to pay

• to prepare the financial statements of the business

• to write up all the ledger accounts

Which statement is correct?

• Accounting involves measuring profits and losses.

• Accounting is the recording of financial transactions.

• Book-keeping involves communicating financial data.

• Book-keeping requires the use of ratio analysis.

Which are examples of book-keeping?

1 entering details of a cheque received from a customer in a cash book

2 entering details of goods purchased on credit in a purchases journal

3 producing an income statement to calculate the profit for the year

4 recording details of credit sales in the account of a credit customer

• 1, 2 and 3

• 1, 2 and 4

• 1 and 2 only

• 3 and 4

Which interested party is interested in accounts to ensure a loan can be repaid?

• owner

• bank

• supplier/ trade payable

• customer/ trade receivable

which interested party would be interested in accounts and growth of a business for wage increases and promotions

• bank

• supplier/ trade payable

• owner

• employees

which interested party would be interested in accounts to see profits and the returns they will received

• employees

• banks

• owners

• members of a club