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Bookkeeping should not be confused with Accounting. The process of Accounting begins where book keeping ends. We can say that a bookkeeper is the accountant just as a nurse is to the Medical Doctor. People often mistake bookkeeping for accounting and vice-versa, but people in the accounting industry know that they are two different term
Accounting can be defined as the systematic process of recording, classifying, selecting, measuring and communicating financial data of an organization to interested users to enable them make informed decision. on the other hand, Bookkeeping is the process recording of transactions on a daily basis in the appropriate books. It is an integral part of accounting. Bookkeeping is the process of recording data relating to accounting transactions in the accounting books.
There are two users of accounting information; the internal users and the external users. you can read our article on the difference between internal and external users of accounting information
In a more detailed explanation, I highlighted the difference between bookkeeping and Accounting.
1. Bookkeeping is the basis for accounting while accounting is the basis for business language.
2. The people responsible for book keeping are called BOOKKEEPERS while those for accounting are called ACCOUNTANTS.
3. Bookkeeping doesn't require any special skill while Accounting require skill and knowledge.
4. Bookkeeping is a recording phase while Accounting is a summarizing phase.
5. In Bookkeeping, Financial statements are not prepared for records while in Accounting, financial statements can be prepared for accounting records
6. Bookkeeping cannot help for decision making while accounting will help for decision making
6. Bookkeeping cannot give a complete picture of the financial status while Accounting will give a complete and clear picture of the financial status of a business organization.
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