The Difference between Bookkeeping and Accounting

13

It is not an easy job to manage a business. As the owner of the business, you should monitor your business closely because it needs on hand management. The most important part of your business is the finance department because it determines for how long your business will last. This is the department where accounting and bookkeeping are done.

Bookkeeping – When we speak about bookkeeping we are talking about the process where systematic records of financial transactions of a business and showing how various transactions relate to each other. This is a mechanical process from the bookkeeper and it does not require any financial transaction analysis  but it records them. In the past, these records were kept in the books hence the name bookkeeping. Due to the changing technology the bookkeeping’s are performed using a software called bookkeeping software package. The names of books such as cashbooks, daybooks, ledger books, and journals are still used they are not forgotten. The main function of a bookkeeper is recording transactions in the journals and posting them to the ledgers bookkeeping is sometimes referred to as accounts clerk.

Bookkeeping is divided into two the single and double entry. If the transaction records are carried out in either the debit or credit side of a single account this process is known as the single entry bookkeeping. If two entries of the transactions are recorded on the ledger, one on the debt and the other on the credit side of the accounts book the process is called double entry bookkeeping. To know more about bookkeeping, visit  http://www.ehow.com/how_8561291_bookkeeping-clients.html.

Accounting- This involves the systematic recording from online accounting software, reporting and analyzing the financial transactions of a business. It will be true to say that the role of  bookkeeping revolves around accounting because the role of bookkeeping is to make financial records of business transactions. The system of bookkeeping used in a business will form some parts of the accounting system. It is in the accounting where preparation of statement concerning the assets,  also the operating results and liabilities is carried out. An accountant is a person who is responsible for accounting and accountancy is an occupation related to accounting. An accountant prepares the financial workflow in an organization. There are certain areas in accounting where accountants specialize in, these areas are auditing, taxes, and management. Bookkeeping and accounting job can be done by a single person in small businesses and companies.  In situations like this bookkeepers are also referred to as accountants.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s