Question 1
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(a) Explain the term bookkeeping.
(b) State four benefits of bookkeeping to an organization.
Observation
Few of the candidates demonstrated good understanding of the question while majority exhibited poor performance by mistaking financial accounting for bookkeeping.
Some of the suggested answers are:
(a) Bookkeeping is the systematic recording of financial transactions of an
organization in the appropriate books of accounts on daily basis.
OR
Bookkeeping is the process or activity of keeping accurate records of the money that is spent and received by a business.
(b) Benefits of Bookkeeping
(i) It helps to determine the profit or loss of an organization;
(ii) It minimizes the perpetration of fraudulent practices;
(iii) It is useful in maintaining the financial records of an organization;
(iv) It is used in controlling the finances of an organization;
(v) It provides basis for decision making;
(vi) It provides records for tax assessment;
(vii) It helps a business to comply with all relevant government regulations;
(viii) It helps to ascertain debtors and creditors balances;
(ix) It aids comparison of business performances;
(x) It helps to ascertain purchases and sales values;