Accounting VS Bookkeeping
Before going to explain the Difference Between Accounting and Bookkeeping we must know both term in details like as under:
What is accounting?
It is the measurement, dealing out, and communication of financial and non-financial information about economic bodies such as trade and firm. Accounting, which also known as the “language of business”, that measures the results of an firm economic activities and express this information to a diversity of users, that includees investors, creditors, management, and regulators. Professionals of accounting are known as accountants.
Accounting can be divided into different fields including external auditing, financial accounting, tax accounting management accounting, and cost accounting. Accounting information systems are planned to support accounting purpose and other related activities. This focuses on the reporting of an association financial information, including the groundwork of financial statements, to the outside users of the information, such as investors, regulators and suppliers.
Accounting has a number of subfields or subject areas, including:
- Financial accounting
- Management accounting
- Accounting information systems
- Tax accounting
- Forensic accounting
- Professional bodies
- Accounting firms
What is bookkeeping?
It is the recording of financial dealings, and is part of the method of accounting in business. Transactions include sales, purchases, receipts, and payments. There are several different standard methods of bookkeeping that includes the single entry and double entry systems. Although these may be viewed as “authentic” bookkeeping, any process for recording financial transactions is a bookkeeping process.
This refers generally to the record-keeping features of accounting, and also involves preparing source documents for all transactions, and other operations of a business.
Financial statements are tired from the examination balance, which may include:
- the income statement
- the balance sheet
- the cash flow statement
- the statement of changes in justice
- Single-entry system
- Double-entry system
NO. properties Accounting bookkeeping
- Accounting is the well known method of abbreviation, interpreting, and communicating financial dealing which were classified in the ledger account
- Bookkeeping is used to identifying, measuring, and recording the transactions of the firms.
2 Decision Making
the management can acquire critical business decisions that only depending on the data that provided by the accountants
It cannot acquire any decision on the bases provided data by bookkeeping
The main goal of accounting is to deal the financial condition and further communicate the information to the other relevant authorities.
The main purpose of bookkeeping is to keep and maintain the records of all financial transactions proper and organized way.
4 Preparation of Financial Statements
These are prepared through the accounting process
These are not prepared in this software
5 Skills Required
Due to its systematic and complex nature, It requires special skills for operations.
It does not need any skills.
It uses bookkeeping information to investigate and understand the data.
The bookkeeping process does not require any analysis