Book-Keeping Versus Accounting

 

What is bookkeeping?

 Bookkeeping usually involves only the recording of economic events of a business the task of bookkeeping is to record the transactions primarily in the book of accounts and to classify the transactions recorded.

 What is the difference between bookkeeping and accounting?

 It is assumed that book keeping and accounting are the same and that there is no difference between them truly but there is a huge difference between them because of the accounting work starts where the bookkeeping work ends.

 The difference between bookkeeping and accounting are as follows:

 1. Bookkeeping is the recording step of accounting where accounting is a practical system

 2. The task of bookkeeping is to record the transactions primarily in the book of accounts and to classify the transactions recorded where the main task of accounting is to prepare an accounting statement from the transactions recorded in the book of accounts and to analyze and interpret the recorded accounts and provide the information obtained from it to the concerned user or party.

 3. The bookkeeping process involves the application of 2 steps of the accounting cycle, journalizing and ledger posting where the work of accounting begins where the bookkeeping work ends.

 4. Bookkeeping is carried out by junior staff where accounting is done by senior staff with skill of analysis and interpretation.

 5. Bookkeeping is the basic level of accounting where accounting is the language of business.

 6. Output of bookkeeping is an input for accounting where the output of accounting permits informed judgments and decisions by the users of accounting information.

 Many efforts go into gathering and processing information about a concern before the facts end up in an accounting report. Much of the work required is clerical in nature and can be performed by office workers, machines, and computers. The function of Book-Keeping is to properly record the financial transactions in the books of accounts.

Watch the following video for more detail with an example:

Thus we can conclude that Book-Keepers perform the routine, repetitive tasks of collecting and processsing financial information. Accountants are responsible for designing the systems within which Book-Keepers work.