Accounting and bookkeeping are considered interchangeable terms; but in reality, both have a significant difference on the basis of job and work experience. A small business owner should know the difference between both terms because both people play an important role in your business organization. The accountants can perform the functions of bookkeepers, but the bookkeepers can’t perform the functions of an accountant because the bookkeepers don’t have knowledge of accounting.
Bookkeeping vs Accounting
A common person considers that the bookkeeping and accounting, both are the same things. In fact, both are different because the bookkeeping involves the procedure of recording the monetary transactions, while the accounting is a procedure to design financial statements.
• Bookkeeping is a procedure to record all business transactions in a chronological order. It is important to record all business transactions to support the work of accountants.
• The accounting is a proper information system to record and classify important financial transaction, interpret and analyze the financial data and prepare a report for the help of stakeholders. It proves helpful to make important decisions for your business organization.
It is a significant part of the accounting system because without bookkeeping, you can’t start accounting work. The bookkeeping is an important part of accounting because in this procedure, each and every financial transaction is recorded and the bookkeeper is often known as an accounting clerk. They are responsible for protecting the data and ensuring the … Read the rest