What is the Difference Between Bookkeeping and Accounting?

What is the distinction among bookkeeping, accounting, and accountancy? When an individual says they are an accountant, are they genuinely a bookkeeper? Does it seriously matter?

Bookkeeping

Bookkeeping is the approach of systematically recording the financial transactions of a business enterprise, so as to show how the transactions relate to every other. Bookkeeping is largely a mechanical method and does not involve any analysis of the financial transactions, but rather the recording of them.

Traditionally, the records had been kept in a book, hence the name bookkeeping. These days, bookkeeping is ordinarily performed applying a bookkeeping software package, but the names of the books (daybook, cashbook, journal, and ledger) are still made use of.

A bookkeeper's function is primarily one of recording transactions in the journal and posting to the ledger, and is at times referred to as an accounts clerk.

There are two varieties of bookkeeping: single entry and double-entry. In single entry bookkeeping, the record of each and every transaction is carried to either the debit or credit column of a single account. In double-entry bookkeeping, two entries of every transaction are carried to the ledger: 1 to the debit side, and one to the credit side, of the corresponding account. This is so the two entries can be used to check every single other.

Accounting

Accounting is the systematic recording, reporting, and analysis of economic transactions of a organization. As bookkeeping involves creating a economic record of business enterprise transactions, it is correct to say that the role of bookkeeping is encompassed inside the scope of accounting, and the bookkeeping program made use of by a small business would form component of the accounting method.

Accounting also includes the preparation of statements concerning assets, liabilities and the operating outcomes of a company.

Accountancy is the occupation associated to accounting, and an accountant is the individual who does, or at least is responsible for, the work. Accountants regularly specialize in a certain region of accounting such as taxes, auditing, or management.

In a small organization, all of the bookkeeping and accounting tasks might properly be performed by a single person. In this scenario, that person would typically be referred to as an accountant.