Bookkeeping and accounting are the business terms from which the MBA student has to go through quite often. The terms of business need to be vivid for the MBA students to relish its use in the future. The business students’ career is much bright, and hence they must grab the knowledge with keen interest. Mixing or confusing the terms can lead to negative consequences. There are various significant differences between accounting and bookkeeping. Let us go through these over here:
Accounting VS Bookkeeping
Scope
The act for identifying and determining financial transactions is papular as bookkeeping. It is indeed the measure of transactions in terms of money. After the identification, it includes recording the amount of it in the account books. Last but not least, it includes the steps of classifying these in the books with accuracy and precision. However, accounting is the business term that concerns the process of summarizing the transaction records. It includes the perfect interpretation of it and then allows the communication of its outcomes with the users.
Stage
Bookkeeping is papular as the primary stage. It initiates and accomplishes quite carefully. Various secondary steps link to it and majorly depend on it. However, accounting classified is the secondary stage. It cannot initiate until the process of bookkeeping accomplish.
Objective
The primary purpose of the objective of both accounting and bookkeeping varies. The accounting objective is to communicate the financial information with the parties who are interested in it. It ascertains the business operations’ net outcomes and determines the company’s financial position or organization. After doing so, it communicates all such valuable information with the other parties that reflect its interest.
However, the Bookkeeping objective is to focus on the maintenance of the financial transaction records. These records are made and kept with great care and hence can retrieve when required. It can be made through a manual approach or even with the use of digital devices.
Nature of Job: Difference between bookkeeping and accounting
Bookkeeping is the process that performs most frequently and routinely in the company, and it carries out in huge organizations and small companies on a routine basis. However, accounting is not a routine task. Indeed, it is analytical. The dynamic and analytical nature of accounting grants more value to it from a business point of view. When there is no bookkeeping in the company, it is not possible to carry out accounting with efficiency.
Performance
When it is about bookkeeping, then the junior staff of the organization or company invole in it. The junior staff records the transactions of each day in the book. However, accounting is not a task to perform by the junior staff. It is a critical and crucial task, and hence senior staff is involved in it. The senior staff performs all the functions of the accounting. Bookkeeping acts as the prime base for the process of accounting. Hence, both of them share a strong relationship.
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