Page 17 - CA_ELG_Volume I_ELG-Sample

Paper 1 Principles and Practices of Accounting Theoretical Framework 1.7

1.5 Functions of Accounting

The main functions of accounting are as represented in Fig. 1.4:

Measurement Govt. Regulation and Taxation

Functions of
Decision–making Control
Accounting

Forecasting Comparison and Evaluation

Fig. 1.4 Functions of Accounting

TIPS & TRICKS

Objectives of Book Keeping – “CA”
C – Complete recording of transaction in a systematic and logical manner.
TIPS & TRICKS
A – Ascertain financial effect on the business.

1.6 Book Keeping vs Accounting

The difference between book keeping and accounting is presented in Table 1.1.

Table 1.1 Distinction Between Book Keeping and Accounting

Book Keeping Accounting

Concerned with recording of transac- Concerned with summarising of recorded
tions. transactions.

Constitute as a “base for Accounting”. Is considered as “Language of Business”.
Book Keeping process excludes Financial On the basis of Book Keeping records
Statements. Financial Statements are prepared in the
process.

(continued to next page)

Copyright © Veranda Learning Solutions | www.verandalearning.com/ca