Many use the terms bookkeeping and accounting interchangeably, but the reality is that the first is the first step to the last, namely bookkeeping is a stepping stone of accounting. The scope of the two processes concerned, Accounting is much broader and more analytical than bookkeeping. Bookkeeping is only part of accounting, which creates the basis for accounting. Meanwhile, if you require a service of a trustworthy bookkeeper, we recommend you to call Richard Darcy Gold Coast Bookkeeper.
While bookkeeping emphasizes the recording of transactions so that the work is clerical. On the other hand, accounting is all about summarizing recorded transactions, which require a high level of subject knowledge, expertise, analytical skills, conceptual understanding, and so on.
Bookkeeping is more transactional and administrative in nature, relating to the recording of financial transactions. Accounting is more subjective, giving you business insight based on accounting information.
The complete and systematic recording process of a company’s or organization’s financial transactions by bookkeepers is known as bookkeeping. The purpose of bookkeeping is to reveal the true picture of income and expenses at the end of the accounting period.
Bookkeeping duties are carried out by bookkeepers who are responsible for recording daily business transactions such as cash in and out, items sold or bought on credit, expenses incurred, etc. in an orderly manner.
Bookkeeping records transactions in diaries such as purchases, sales, refunds, sales returns, cash books, journals, etc., and post them in the relevant ledgers, after which a trial balance is prepared.
On the other hand, Accounting is just a business language that provides information about the financial status of a company or organization. This is a complete procedure that starts with the recording of transactions and ends with reporting financial statements at the end of the financial year.
In accounting, an organization’s monetary transactions are systematically identified and recorded, then grouped, that is, similar transactions are classified into general groups and then summarized in a way that can be presented to users of financial statements.
The purpose of accounting is to provide users with a true and fair view of financial statements, namely investors, employees, creditors, suppliers, managers, government and the general public in such a way that is easily understood by them for certain finances.