Difference WikiAccounting

Difference Between Bookkeeping and Accounting

Main Difference

The main difference between Bookkeeping and Accounting is that Bookkeeping is the method of recording regular business transactions, whereas Accounting is the process of recording monetary transactions relating to the business.

Bookkeeping vs. Accounting

Bookkeeping is the process of recording the consistent business transaction probably, whereas accounting is the process of fiscal recording transaction connecting to the business. Bookkeeping is more transactional and executive with monetary recording transactions, while accounting is giving business perceptions manufacturing on secretarial information. Bookkeeping is not much broader and investigative, whereas accounting is much broader and investigative. Bookkeepers are qualifying to handle the complete bookkeeping process, while Accountants are qualifying to supervise the whole accounting process.

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The main object of bookkeeping is to save the records of all commercial transactions appropriately and systematically, whereas the main objective of accounting is to measure the economic situation and provide the information to the related consultants. Financial statements are not arranging in the bookkeeping process, while financial statements are organizing in the accounting process. The bookkeeping process does not necessitate any exceptional ability, whereas accounting requires outstanding skills. In bookkeeping, process management cannot take the decision, while in the accounting process, management can make a critical decision.

Bookkeeping is an action of recording the monetarist transactions of the corporation in an organized way, while accounting is a sound recording of the monetarist matters of an association for a specific period. Bookkeeping does not imitate the monetary situation of an association, whereas accounting openly displays the fiscal condition of the individual. Bookkeeping is the division of accounting, while accounting is considering as the language of business. The types of equipment of bookkeeping are journal and ledgers, whereas types of equipment of accounting are the balance sheet, profit & loss account, and cash flow statement.

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Comparison Chart

BookkeepingAccounting
Bookkeeping is the method of recording the business transaction.Accounting is the method of fiscal recording transactions to the business.
Meanings
It is the subsection of accounting.It is considering as the language of business.
Part of Financial Statement
NoYes
Tools
Journals and ledgersBalance sheet, cash flow statement and profit and loss accounts
Objective
To keep the records of the financial transaction.To measure the financial situations.
Requirement of Skills
NoYes
Handling By
BookkeepersAccountants

What is Bookkeeping?

Bookkeeping is the procedure of recording business transactions; probably, it is an essential step in the accounting process. It is placing the groundwork for the accountants by recording the monetary transactions. In the bookkeeping process, the financial information containing in the ledgers and journals. Bookkeeping is posting debits and credits and also issuing customer invoices, and it is a vital element to construct a monetarily practical business. Bookkeeping maintains balancing subsidiaries, general ledgers, past accounts, and annual budget, and also manages petty cash funds. It is frequently developing the payroll on time.

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Bookkeeping is the activity of protecting complete documents of every separate financial transaction of the individual. The persistence of the bookkeeping is to release the accurate image of earnings and expenses after the accounting period. The whole task of bookkeeping is performing by bookkeepers who are regularly completing business transactions, and they are correct in their work and expert about financial topics. There are two types of preparing the bookkeeping methods, first is the single entry system, and the other is the double-entry system.

Bookkeeping does not need to arrange the financial statement; bookkeeping only maintains the journal ledger, and it is a primary document of bookkeeping because all sales and purchases need to record in journal ledger. The difficulties of a bookkeeping method often depend on the scope of the business and the amount of the transactions. Bookkeeping accomplishes the monthly settlement of every bank account, and it also sustains an organized accounting substantial system; the bookkeeping system provides accounting and managerial supports when it is requiring.

What is Accounting?

Accounting is the procedure of recording financial transactions relating to the business, and Accounting is an upper-level method that is consuming financial information. The whole system of accounting is extra particular than bookkeeping, Accounting is organizing adjusting entries, and also arranging financial statements of an organization, the accounting process is recording expenditures that are still not in proceedings, Accounting is examining costs of an action, and also finalizing income tax returns. The accounting process is supporting the professional holders in accepting the influence of financial verdicts.

Accounting has an extensive range of bookkeeping. Accounting is describing as the organized development of recognizing, understanding, and cooperating financial information. Accounting is a professional language which is providing material about the fiscal position of the association. Accounting is a comprehensive system which is starting from the recording of transactions and is finishing on the reporting of the financial statements at the ending period of the fiscal year. The parts of the accounting process are balance sheets, profit & loss accounts, and cash flow statements. In the accounting process, the decisions are taking on the sources of accounting records.

The primary purpose of accounting is to measure the monetary condition of the business and to deliver an accurate and reasonable view of the financial statements to its customers. Accounting openly shows the fiscal situation of the singular. The accounting process is handling by the accountants, and these accountants are eligible to manage the complete accounting process. There are some further divisions of the accounting process, and their names are financial accounting, cost accounting, management accounting, etc.

Key Differences

  1. The bookkeeping keeps records of the business transaction, whereas the accounting keeps records of the financial transaction.
  2. The task of the bookkeeping is performing by the bookkeeper; on the other hand, the job of the accounting is performing by the accountants.
  3. The bookkeeping process is not having a financial statement; conversely, the accounting process has a financial statement.
  4. The bookkeeping is not much broader; on the flip side, the accounting is much more comprehensive.
  5. The bookkeeping process does not need special skills, whereas the accounting process needs some extra skills.
  6. Bookkeeping tools are journal and ledger; on the flip side, accounting tools are balance sheet, profit and loss accounts, and cash flow statements.

Conclusion

The bookkeeping process is working as a platform into the business, and bookkeeping is the first stage of accounting. Bookkeeping is acting as a base of the accounting, because, the bookkeeping is an intimate part of the accounting. That’s why if the records of bookkeeping are managing correctly, then the accounting process will also be perfect and accurate.

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