Accounting Statement Analysis

This article provides an analysis of the function undertaken by a bookkeeper and an accountant. It explains the differences between bookkeeping and accounting and advises Jacqui on the best person to hire for her business.

Running head: ACCOUNTING STATEMENT ANALYSIS 1
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ACCOUNTING STATEMENT ANALYSIS 2
According to (Klijn & Koppenjan, 2008) he argues that accounting and bookkeeping tend
to be the process of identifying, measuring, recording and interpreting economic information.
The information provided tends to be used in making judgment. Bookkeeping in general term
involves record keeping aspect accounting and hence more data is provided which accounting
principles are applied in preparation of financial statements. In our case, we are trying to develop
an analysis who is better between a bookkeeper and accountant for Jacqui. First, it important to
note that accountant and bookkeepers tend to share a common goals and support business in any
stage of their financial cycle.
For better decision making, it would be vital if we could provide an effective analysis of
the function undertaken by a bookkeeper and an accountant. To begin with will be bookkeeping
which is the process of keeping records of daily transactions in a consistent way. Hence, it is
comprised of posting debits and credits, production of invoices, competing payrolls and
maintenance and balance of general ledger and historic accounts. Naqi (2008) perceives that
bookkeeping main component is maintaining a general ledger. General ledger is the document
where a bookkeeper keeps records and amounts of sale or expenses receipts.
On the other hand, accounting in accordance to Jones & Abraham (2007) is the use of
high level process which uses financial data compiled by a bookkeeper to derive financial
models. This makes accounting more subjective compared to bookkeeping which involves large
transaction. Accounting involves preparation of adjustment entries, preparations of a firms
financial statements, analyzing of preparation cost and completion of income tax-returns. The
whole accounting process offers reports which bring key financial indicators together. Hence, the
results developed in accounting tend to be easily understood and one is aware on the flow of the
business. Hence, this means that in accounting one is able to predict the flow of the business.

ACCOUNTING STATEMENT ANALYSIS 3
In regards to advising Jacqui on the best person to hire. From the above discussion, its
evident that in bookkeeping there is some mediocrity when trying to make predictions about your
business. It’s also evident that the complexities in bookkeeping system depend on size of
business or number of transaction. Hence, some errors are likely to emerge. But in accounting
the results attained tend to be better because in accounting information is transferred from ledger
into statements which reveal the bigger picture of the business (Nor-Aziah & Scapens, 2007). On
my opinion, I would advise Jacqui to consider employing an accountant because they help in
preparing strategic tax plan, financial forecasting and also tax filling which is an added
advantage for an organization.

ACCOUNTING STATEMENT ANALYSIS 4
References
Nor-Aziah, A. K., & Scapens, R. W. (2007). Corporatisation and accounting change: The role of
accounting and accountants in a Malaysian public utility. Management Accounting
Research, 18(2), 209-247.
Jones, G., & Abraham, A. (2007). Education implications of the changing role of accountants:
perceptions of practitioners, academics and students.
Naqi, S. A. (2008). The process of accountability. International Business Management, 2(1), 1-
10.
Klijn, E. H., & Koppenjan, J. F. (2014). Accountable networks. The Oxford Handbook of Public
Accountability.