The purpose of accounting: 

 Book-keeping: The process of recording financial transactions to make records.

 Accounting: The process of using book-keeping records to prepare financial statements. It provides information to monitor progress and aid in decision-making.

               The difference between the two:

·         A book-keeper can only perform book-keeping, whereas financial statements can only be made by an accountant.

·         Book-keeping is a continuous, day-to-day process, whereas accounting is performed periodically (at regular intervals).

Business profit & loss: This is the difference between the total income and total expenses in a business. It appears on the income statement.

Purpose of monitoring them: To measure the success of the business and thereby help make decisions for the future. It also helps the owners be aware of what happened in the business during that financial year.

Written by Caroline