What do you mean by Bookkeeping and Accounting?
Book-keeping and accounting are often used interchangeably but they are different from each other. Book-keeping provides the basics of accounting whereas accounting is a broader subject. Accounting includes design of accounting system, income tax work, audits, cost studies , preparation of financial statement and analysis & interpretation of these financial statements for decision making purpose.
Difference between Bookkeeping and Accounting
|Book-keeping makes the base for the accounting.||Accounting makes the base for business decision making.|
|Book-keeping means recording of transactions.||It is summarization of the recorded transaction.|
|Book-keeping is mainly clerical in nature and usually done by junior employees of the accounts section.||The work of accounting requires conceptual knowledge and analytical skill.|
|Book-keeping is done according to accounting concepts and conventions.||The methods and procedure of analysis and interpretation of financial statements vary from organization to organization.|
|You can not define the financial position of any business from the book-keeping records.||You could define the financial position of any business from the accounting records.|
|Financial statements are not the part of book-keeping.||Financial statements are prepared from the book-keeping records for the accounting purpose.|