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How does the work of accountants differ from the work of bookkeepers?
AAccountants only record transactions in journals
BAccountants classify, summarize and analyze the data
CAccountants never prepare any financial statements
DAccountants replace the ledgers with trial balances
Answer & Solution
Correct answer: B. Accountants classify, summarize and analyze the data
1. Bookkeeping is the system used to record a firm's financial transactions, and it is a routine, clerical process.
2. Accounting is the broader concept: accountants take the bookkeepers' transactions and classify and summarize the financial information.
3. They then prepare and analyze financial reports, and they develop and manage financial systems and help plan financial strategy.
4. Recording transactions in journals is the bookkeeping half of the work, so the first option describes the wrong role.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.3 Basic Accounting Procedures_
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