book keeping and reference with accounting
Answers
Here's an basic concept for you.. ^_^
This note describes about the book-keeping and accounting. Bookkeeping is the recording of financial transactions. Transactions include sales, purchase, income, receipts and payment by an individual or organization. So, book-keeping helps to record these financial transaction in the form of journal, ledger, etc. Accounting is the process of systematic recording, analyzing, controlling and communication of the financial transactions. So, accounting also keeps the proper financial records of an organization and helps to maintain proper cash flow.
While bookkeeping and accounting are both essential business functions, there is an important distinction. Bookkeeping is responsible for the recording of financial transactions. Accounting is responsible for interpreting, classifying, analyzing, reporting and summarizing financial data. The biggest difference between accounting and bookkeeping is that accounting involves interpreting and analyzing data and bookkeeping does not.
Understanding Bookkeeping
Bookkeepers record financial transactions in chronological order on a daily basis. Because accounting software automates many of the processes, some bookkeepers in small organizations also classify and summarize financial data in financial reports. These bookkeepers are often referred to as full-charge bookkeepers. They make higher salaries than bookkeepers but lower salaries than accountants.
Understanding Accounting
Accountants analyze financial transactions in financial statements and business reports following accounting principles, standards and requirements. Accountants analyze and interpret financial data to report the financial condition and performance of the business to company leaders to help them make informed business decisions.
The Similarities
Bookkeeping and accounting can appear to be the same profession to the untrained eye. Both bookkeepers and accountants work with financial data. To enter either profession, you must have basic accounting knowledge. Bookkeepers in smaller companies often handle more of the accounting process than simply recording transactions. They also classify and generate reports using the financial transactions.
They may not have the education required to handle these tasks, but this is possible because most accounting software automates reports and memorizes transactions making transaction classification easier. Sometimes, an accountant records the financial transactions for a company, handling the bookkeeping portion of the accounting process.
The Distinctions between Accounting and Bookkeeping
Taking a few accounting courses and developing a basic understanding of accounting will qualify you for a job in bookkeeping. To work in accounting, you must have at least a bachelor's degree to become an accountant or, for a higher level of expertise, you can become a certified public accountant.
Accountants are qualified to handle the entire accounting process, while bookkeepers are qualified to handle recording financial transactions. To ensure accuracy, accountants often serve as advisers for bookkeepers and review their work. Bookkeepers record and classify financial transactions, laying the groundwork for accountants to analyze the financial data.
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