Book-keeping & accounting

1. Explain the main difference between book-keeping and accounting: Book-keeping is the process of recording in chronological order the daily transactions of a business entity, while accounting is an information system which includes the process of recording, classifying, summarising, reporting, analysing and interpreting the financial condition and performance of a business, in order to communicate with stakeholders for busniess decision making.

2. Explain the main role of accounting: To classify and record monetary transactions and present the financial results of the activities of an entity, in other words, a scorecard that shows how the business is doing.

3. Define book-keeping: The recording of financial transactions.

4. Define accounting: The process or work of keeping financial accounts.

5. Explain how past performance can be analysed to provide a guide for future decision making: Information on past performance can used to future estimate the consequences of different alternatives.