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What is Book-keeping? How does it differ from Accounting?
Answers
Answer:
definition
Bookkeeping:
Bookkeeping is mainly related to identifying, measuring, and recording, financial transactions
Accounting:
Accounting is the process of summarizing, interpreting, and communicating financial transactions which were classified in the ledger account
Decision Making
Bookkeeping:
Management can't take a decision based on the data provided by bookkeeping
Accounting:
Depending on the data provided by the accountants, the management can take critical business decisions
Objective
Bookkeeping:
The objective of bookkeeping is to keep the records of all financial transactions proper and systematic
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Accounting:
The objective of accounting is to gauge the financial situation and further communicate the information to the relevant authorities
Preparation of Financial Statements
Bookkeeping:
Financial statements are not prepared as a part of this process
Accounting:
Financial statements are prepared during the accounting process
Skills Required
Bookkeeping:
Bookkeeping doesn't require any special skill sets
Accounting:
Accounting requires special skills due to its analytical and complex nature
Analysis
Bookkeeping:
The process of bookkeeping does not require any analysis
Accounting:
Accounting uses bookkeeping information to analyze and interpret the data and then compiles it into reports
Types
Bookkeeping:
Basically there are two types of bookkeeping - Single entry and double entry bookkeeping
Accounting:
The accounting department does preparations of a company's budgets and plans loan proposals
Bookkeepers and Accountants
Bookkeeping:
Bookkeepers are required to be accurate in their work and knowledgeable about financial topics. Bookkeepers work is usually overseen by an accountant
Accounting:
Accountants with sufficient experience and education can obtain the title of Certified Public Accountant (CPA)