Differentiate between Book- keeping and Accountancy.
Answers
Explanation:
Differences between Bookkeeping and Accounting. ... In the simplest of terms, bookkeeping is responsible for the recording of financial transactions whereas accounting is responsible for interpreting, classifying, analyzing, reporting, and summarizing the financial data.
Answer:
What is Bookkeeping?
Bookkeeping is the process of recording, storing and retrieving of financial transactions of a business on a day-to-day basis.
Bookkeeping is said to be the basis of accounting, whereas accounting forms a part of the broader scope in finance.
The most important focus of bookkeeping is to maintain an accurate record of all the monetary transactions of a business. Companies use this information to take major investment decisions.
The bookkeeper maintains bookkeeping records. Accurate bookkeeping is critical for business as it gives a piece of reliable information on the performance of a company.
Bookkeeping process consists of the following steps:
Identifying a financial transaction
Recording a financial transaction
Preparing a ledger account
Preparing trial balance
What is Accounting?
Accounting is the process of recording, analyzing, summarizing and reporting of data of financial transactions of a business. Accounting helps determine the financial position of a firm to the investors and stakeholders.
It helps a business in the short and long term decision making and also conveys the credibility of a company to the market.
It is also known as the language of business.
The purpose of accounting is to provide a clear view of financial statements to its users, which includes investors, creditors, employees, and government.
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