Question

distinguished between book keeping and accounting

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Answer 1

Accounting is the process by where a company's financials are recorded, summarized, analyzed, consulted and reported on.

Bookkeeping is the recording part of this process, in which all of the financial transactions of the business (consisting of income and expenses) are entered into a database.

Answer 2

Explanation:

Bookkeeping:

• Bookkeeping deals with identifying and recording financial transactions only
• Data provided by bookkeeping is not sufficient for decision making
• Not done in the case of bookkeeping
• No analysis is required in the bookkeeping
• The person concerned with bookkeeping is known as a bookkeeper
• Bookkeeping does not show the financial position of a business
• No high-level learning required

Accounting:

• Accounting refers to the process of summarising, interpreting and communicating the financial data of an organisation.
• Management can take important decisions based on the data obtained from accounting
• Financial statements are a part of the accounting process
• Accounting analyses the data and creates insights for the business
• The person concerned with accounting is known as an accountant
• Accounting helps in showing a clear picture of the financial position of a business
• High-level learning required for understanding and analysing accounting concepts