Accounting and Bookkeeping
There is a significant
misconception among people that bookkeeping and accounting are one profession.
They may seem similar from afar, but they are many striking differences between
the two:
• While
bookkeeping is the foundation of a company, accounting uses the information
provided by bookkeeping for preparing reports and statements related to
finances.
• Bookkeeping
is just a segment of the accounting system, while accounting has a broader
perspective.
• Bookkeeping
is the source of input for accounting, whereas accounting makes decisions and
judgments based on that information.
• Bookkeeping
is a track record of all the financial activities and transactions in
chronological order. Accounting aims at obtaining the financial strength and
results of the operational activities of a business.