Learn more about the differences between accounting and bookkeeping below. An accountant can be considered a bookkeeper, but a bookkeeper can’t be an accountant without proper certification. Bookkeeping is a direct record of all purchases and sales your business conducts, while accounting is a subjective look at what that data means for your business and cash flow strategies. The accounting reports help in ascertaining the financial position of an entity, however not bookkeeping records.Both accounting and bookkeeping play an important financial role in business, there is a difference between the two.Thus, these are prepared from the accounting process. Financial statements do not form part of bookkeeping.Whereas, the accounting methods and procedures for analyzing and interpreting the financial reports may vary from entity to entity. Bookkeeping is in accordance with the accounting concepts and conventions.Accounting starts where the bookkeeping ends and is thus broader in scope than bookkeeping. The Bookkeeping is the base for accounting.Bookkeeping is clerical in nature and usually is the junior staff performs this function whereas accounting requires skills of accountant and knowledge of various accounting policies.

Bookkeeping is concerned with the recording of financial transactions whereas accounting involves recording, classifying and summarizing financial transactions.

The difference between bookkeeping and accounting is as follows:. Question: There is a difference between the two terms bookkeeping and accountingĪns. Solved Example on Bookkeeping and Accounting Also, it enables management to prepare various types of reports. It is concerned with summarizing of the recorded financial transactions. Thus, accounting enables stakeholders to know the financial position of an entity for the period. Only financial transactions which can be expressed in terms of money are recorded. It is thus a broader concept than bookkeeping. It deals with common monetary measurement. Process of BookkeepingĪccounting includes recording, classifying, summarizing financial transactions in a proper manner. It involves the preparation of source documents for all the financial transactions of the entity. Whereas, Accounting involves classification, summarizing and reporting of financial transactions. It is because it is responsible for the proper recording of financial transactions. Accounting of an entity depends on its book-keeping system.īook-keeping is the basis for accounting. Most of the entities nowadays use computers for bookkeeping rather than recording them manually. Book-keeping is usually done by junior employees of the entity. While doing Bookkeeping, we need to follow the basic accounting concepts and accounting conventions.īookkeeping is clerical in nature. There is a difference between the two terms bookkeeping and accounting, let us understand what is bookkeeping and accounting, their processes and difference between the two. It requires skills and experience of an accountant. It also facilitates the interpretation of accounting information for both internal and external users for business decisions making. Accounting includes a design of accounting systems which book-keepers use for the preparation of financial statements, audits, cost studies, income-tax statements, etc.

Bookkeeping is an important part of accounting. Book-keeping and accounting are different from each other.

Bookkeeping and accounting classes