Difference Between Bookkeeping and Accounting
 |
| What is the difference between accounting and bookkeeping? |
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
What is the difference between accounting and bookkeeping?
In a more detailed explanation, I highlighted the difference between bookkeeping and Accounting.
- Bookkeeping is the basis for accounting while accounting is the basis for business language.
- The people responsible for book keeping are called BOOKKEEPERS while those for accounting are called ACCOUNTANTS.
- Bookkeeping doesn't require any special skill while Accounting require skill and knowledge.
- Bookkeeping is a recording phase while Accounting is a summarizing phase.
- In Bookkeeping, Financial statements are not prepared for records while in Accounting, financial statements can be prepared for accounting records.
- Bookkeeping cannot help for decision making while accounting will help for decision making
- 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.
Conclusion
Many people mistakenly use the terms "accounting" and "bookkeeping" interchangeably. However, it's important to note that there are actually some notable differences between the two. Accounting is a more advanced and complex field than bookkeeping.
Becoming an accountant typically requires a degree from a reputable accounting university, as well as professional membership with an accounting body. On the other hand, bookkeeping is a much simpler discipline. All that's required is a basic understanding of the rule of double-entry bookkeeping.
If you're interested in improving your knowledge of bookkeeping, there are many free online bookkeeping courses available that offer certificates upon completion.
