I usually ignore things like grammar checkers, but Microsoft Word’s grammar checker happens to be pretty good at this distinction. I should add that we have lots of uses for both words, but today we’ll look at only one use. Here’s the rule:
Use “that” in restrictive clauses.
Use “which” in non-restrictive clauses.
Whatever that means, right?
Restrictive means the information is necessary. Non-restrictive means the information is added info; an aside or parenthetical remark.
Restrictive: The list includes an account that has been set up in the general ledger.
Non-restrictive: The list includes uncollected funds, which is what distinguishes this list from the collected balance.
I should add that you need to use a comma before this usage of “which” to show that the remark is parenthetical.
Here’s an example:
We set up an account that includes uncollected funds, which is what distinguishes it from a collected balance account.
A good exercise is to watch for this construction in your daily reading. You will see a lot of people using “which” when they should use “that.” They’re being pretentious. Don’t you be pretentious.