Question

• How is the job of the bookkeeper different from an accountant? • What's the purpose of accounting journals and a ledger?

Answer 1

Bookkeeping:
1. Bookkeeping is the primary stage.
2. The basic objective of bookkeeping is to maintain systematic records of financial transactions.
3. It is performed by junior staff
4. It does not require a higher level of knowledge than that of an accountant.
5. The bookkeeper may or may not possess analytical skills.

Accounting:
1. Accounting is the secondary stage. It starts with bookkeeping ends.
2. It is to ascertain net results of operations and financial position and to communicate information to the interested parties.
3. It is performed by senior staff.
4. The accountant is required to have a higher level of knowledge than that of a bookkeeper.
5. An accountant is required to possess analytical skills.  

Purpose of journal:
1. It provides chronological records of transactions in the order in which they occur.
2. It provides explanation of the transaction.
3. It records both the aspect of the transaction.

Purpose of the ledger:
1. It provides complete information about all accounts in one book.
2. It enables to ascertain what are the main items of revenue and expenses.
3. It helps the preparation of final accounts.
4. It enables ascertain what are the Assets and liabilities.