What is the difference between Accounting And bookkeeping.
In Accounting or financing language, the term accounting and bookkeeping are almost used interchangeably because they both deal with business accounts. However both concepts are different but if someone asks about the difference between accounting and bookkeeping it becomes taught to describe because both support the business finance in different stages and ways. Let's take a look at the difference between Bookkeeping and accounting.
What is Accounting?
Accounting is high level work that uses the financial information that is accumulated by the bookkeeping and business owners. Accounting is the process of systematically recording, communicating and measuring about business finance and financial transactions. It determines the business finance position & health and Position of the stakeholders. It plays a vital role in decision making for a short and term period and passes the reliability of the company in the market.
The main purpose of accounting is to provide a clear view of the finance with the full insight for the business users like owners, stakeholders, employees, government and etc that’s why it’s more subjective in comparison to bookkeeping. In accounting, an accountant converts the information into ledgers and then into statements that present the business financial situation and how business is going.
What is Bookkeeping?
Bookkeeping is the essential key to building a successful business. Bookkeeping is a process of the classification and recording of each transaction of the business consistently.
It's said to be basic accounting. The importance of bookkeeping is that it maintains each record of the monetary transaction. Businesses use this information for business financial statements and investment decisions.
The complexity of the bookkeeping is dependent upon the business size and how much financial transaction is done weekly, daily or monthly. All the sale purchase transactions are recorded in the bookkeeping book.
To be a successful bookkeeper we don’t need any formal education. We can become experts in bookkeeping easily. Bookkeepers always work under the eye of either accounting or business owners. Keep in mind bookkeepers can’t call themselves accountant.
The bookkeeping process contain:-
- Identifying a financial transaction
- Recording a financial transaction
- Preparing a ledger account
- Preparing trial balance
What Is the Difference Between Bookkeeping and Accounting?
We hope this short information helps you to understand the difference between bookkeeping and accounting. To get tailor-made accounting and bookkeeping service contact risians accounting and auditing firm in dubai, leading firm in dubai who has practically working experience in different industries, shops, malls and Projects.