Overwhelmed by the Complexity of Accountants? This May Help

Similarities and Differences between Accounting and Bookkeeping Many times, accounting is confused for accounting. Accounting is the systematic means of identifying, maintaining documents, classification, assessing and communicating financial information over a given amount of time so as to understand the losses and gains of a company whereas book keeping is a part of the procedure in accounting through record of financial transactions. Book keeping provides information essential for preparation of accounts. Both processes have their similarities and differences as outlined below. Similarities Records
Why not learn more about Accountants?
In both accounting and book keeping, records are very important. Book keeping demands daily noting down for simple accessibility when it comes to preparing reports and bookkeeping demands the documents for preparation and analyzing financial statements.
Why not learn more about Accountants?
Classification In the daily transaction records, they are classified into different books i.e. bank book that is used to document the deposits and withdrawals made, buy book for the records of all purchases made on credit, money book used for the purpose of documenting all cash payments such as trade payables like trade payables and petty cash purchases and money receipts like trade receivables and cash sales and finally the earnings book by which non-cash earnings are recorded together with customer’s key details and afterwards transferred into the client’s account. Differences Tools used Accounting makes use of the income statement, balance sheets and even cash flow statements as its main tools while in book keeping journals and ledgers are used. Financial statement preparation While book keeping does not require any preparation of Financial statements, accounting is largely the preparation of these financial statements such as balance sheets, profit and loss statement and cash flow statements. Management role The management is not involved in book keeping but they’ve A particular interest in accounting documents since it’s helpful in checking on the operation of an organization and making of future choices based on that info. Decision making Whereas information provided by book keepers cannot be solely used to make decisions, accounting information plays a major role in making decision making in a firm. Job role Publication keeper’s roles are largely to collect, document and Classify information relating to monetary transactions while accounting requires more skilled employees to translate and convey the consequences for decision making. Skills wanted Accounting is a bit complicated therefore it requires particular Skills while on the other hand accounting doesn’t require any specific skills because of its simple nature. Categories Accounting is classified to cost, management and financial accounting among other categories while reserve keeping is categorized into single entry and double entry. A lot of Individuals tend to confuse book keeping and bookkeeping to be the exact same thing. However, as we have seen in this paper that the two procedures Share some common characteristics and also have their differences which differentiate One from the other.

Categories: Foods & Culinary