January 29, 2022

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Differences between Accounting and Bookkeeping

Differences between Accounting and Bookkeeping
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All the financial transactions in business are generally prepared by bookkeepers and accountants. The main purpose of this is to ensure that all business records are kept. Also, since profit is the major objective of a business, such records enable the accountant to compute it. However, Bookkeeping may look similar to accounting but there exists a huge difference between them. Here, we will discuss these differences.

Differences between bookkeeping and accounting

The differences between bookkeeping and accounting are based on certain terms. These are discussed below:

Officials: The official in charge of bookkeeping is a bookkeeper but that of accounting is an accountant.

Scope: Bookkeeping is smaller in scope and accounting is broader in scope

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Position: In a general setting, it is believed that a bookkeeper has a lower position while the accountant has a higher position in an organization.

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Definition: Bookkeeping is the collection and recording of financial data only. Accounting, in addition to the above, present and analyze these data to enable users to make an informed economic decision.

Qualifications: A bookkeeper does not need any qualifications to handle his job. A bookkeeper whose job is to record inventory, will simply do the same and provides reports as and when due. On the other hand, the accountant must be better qualified. A minimum of the higher level diploma is an important qualification. In addition, is meeting all requirements to be a chartered accountant.

Users: The primary users of bookkeeping information is the management and owner of a business. However, for accounting, aside from the above, the government, and the general public at large need accounting information.

Nature of Work: The bookkeeper job ended after recording the transaction of the business in the books of account. The accountant job continues even after analyzing and interpret financial reports.

Next, the significance of bookkeeping and accounting would be discussed.

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