Often in deciding the final results of financial transactions do bookkeeping and accounting play different roles. These may, in fact, be referred to as two stages or phases of the same subject.
The primary or practical aspect is bookkeeping, and the final or theoretical aspect of accounting is accounting. From where bookkeeping stops, accounting begins.
In other words, it can be assumed that the foundation of accounting is bookkeeping, and the system dependent on bookkeeping is accounting.
Any fundamental distinction between bookkeeping and accounting is obviously not marked. The distinctions between bookkeeping and accounting are very narrow. Except, in reality, it is hard to establish a strong demarcation between bookkeeping and accounting practices.
Difference between Bookkeeping and Accounting
The differences between bookkeeping and accounting are as follows.
|1||The recording phase of an accounting method is bookkeeping||The summering process of the accounting system is accounting.|
|2||The foundation of accounting is bookkeeping||The foundation of business language is accounting.|
|3||A bookkeeper is named an individual responsible for bookkeeping.||An accountant is called the individual who is responsible for accounting.|
|4||From bookkeeping records, financial statements are not prepared.||From accounting records, financial statements are prepared.|
|5||Bookkeeping does not provide the whole picture of the business unit’s financial situation.||Accounting provides a complete picture of the business unit’s financial situation.|
|6||In order to comply with ledger formalities, bookkeeping does not help.||With the aid of accounting, ledger formalities can be completed.|
|7||For making managerial decisions, bookkeeping does not provide any information.||In order to make a managerial decision, accounting provides information.|
|8||There is no branch for bookkeeping.||Accounting has many branches, such as financial accounting, cost accounting, government accounting, and management accounting, etc.|
You may also read: