![]() ![]() ![]() In the process of bookkeeping, business transactions and events are identified and recorded systematically. It is a field of knowledge that indicates the route to accounting.Īccounting is all about the preparation of financial statements and their presentation in the simplest possible manner, based on the information recorded, using the bookkeeping process by the bookkeeper. It is an action based on the knowledge of accountancy. Profession pursued or opted by the accountants. Nature of work performed by the accountants. Content: Accounting Vs AccountancyĪccounting is a systematic process that involves measurement, recording, classification, summarizing, presenting and interpreting the financial information of an organization.Īccountancy implies the systematic body of knowledge that prescribes accounting principles, conventions and techniques, which are to be followed during the accounting process. preparing and maintaining accurate financial records of the enterprise.Īccounting and Accountancy, two are commonly misconstrued by many students however there are subtle differences between the two which we will be discussing in this post. Who is an Accountant?Īn accountant is a professionally qualified person who performs accounting functions, i.e. On the contrary, the profession opted by accountants is termed accountancy. With the help of Accounting, we can determine the business' financial position.īookkeeper is the person involved in the bookkeeping.Īccountant is the person involved in the accounting.Accounting is a business language in which the economic activities of the enterprise are recorded and presented. With the help of the Bookkeeping, we cannot determine the business' financial position. The analysis is not needed for Bookkeeping.Īccounting analyses the data and provides company insights. The financial statements are prepared through the accounting process. The financial statement is not a part of the Bookkeeping. There are no special skill sets required for BookKeeping.īecause of the analytical and complex nature of accounting, it requires some special skills. The purpose of accounting is to assess the financial situation and inform the information to the concerned authorities. The purpose of bookkeeping is to maintain the records of each financial transactions fair and orderly. Weighing the impact of decisions pertaining to finances.ĭifference Between Bookkeeping and Financial Accounting Basis for ComparisonīookKeeping means a process in which recording, storing and retrieving a company's financial transaction on the regular basis.Īccounting means a process of recording, analysis, interpretation, and summarization of a company's financial data.Prepare ledger account and trial balance.Formulating and analyzing financial statements.The process of Accounting involves the following points: Preparing financial statements and reports.Prepare business plans and cash flow forecasts.There are various branches of Accounting: Accounting is also called the language of business. The main purpose of accounting is to offer its users a clear and true view of the financial statements that comprise government, employees, creditors and investors. Accounting helps the company in making short- and long-term decisions and take a company's credibility to the market. With the help of Accounting, investors and stakeholders can determine the financial position of a company. Accounting verifies the record of BookKeeping and makes its financial report. Preparing and managing the trial balance.Īccounting means a process of recording, analysis, interpretation, and summarization of a company's financial data.Preparing and maintaining general ledger accounts.Posting all debits and credits of a venue accurately.Identifying and recording financial transactions.The process of BookKeeping involves the following steps: ![]() Processing receipts, payments and other financial transactions.Managing accounts payable and accounts receivable.Processing a payroll system and maintain it.It is also important for all the financial sources such as government, financial institutions and investors.īookkeeping methods are of two types which are Single-Entry system of BookKeeping and Double-Entry system of Book Keeping. In a Business, BookKeeping plays an important role because it gives all financial data a systematic order. ![]() The transaction comprises of an individual or a company's sales, purchases, receipts, etc. Next → ← prev Difference Between Bookkeeping and Accounting What is BookKeepingīookKeeping means a process in which recording, storing and retrieving a company's financial transaction on the regular basis. ![]()
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