Difference between bookkeeping and accounting

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on June 22, 2021

Those people, who have little knowledge about accounting, are often confused in understanding the difference between Bookkeeping and Accounting. Bookkeeping is a small part of Accounting. Bookkeeping represents the recording phase of an accounting system. So we can say that the process of Accounting begins where the process of Bookkeeping ends. Accounting not only includes maintaining accounting records but also the preparation of the following statements.
(1) Trading and Profit & Loss Account.
(2) Balance Sheet.
The main differences between bookkeeping and accounting are as under.

Accounting Bookkeeping
It represents Summarizing phase. It represents the recording phase.
It is the basis for business language. It is the basis of accounting.
Persons who practice accounting are known as accountants. Persons who practice bookkeeping are known as bookkeepers.
Only an expert can practice accounting as it requires several skills and knowledge. Anyone can practice bookkeeping as it does not require any skill or knowledge.
As an accountant personal judgment is essential. As the work of Bookkeeper is to collect data so his personal judgment is not essential.
Financial statements are prepared from the accounting record. Financial statements are not prepared from Bookkeeping records.
It provides data for managerial decision making. It does not provide data for managerial decision making.

Related posts:

  1. Single Entry System in Accounting
  2. Fund flow statement
  3. Q.1: Define the term ‘Management Accounting’. Discuss its features and importance.
  4. What Is Bookkeeping?
  5. What Is Process Costing?

Related posts:

  1. Single Entry System in Accounting
  2. Fund flow statement
  3. Q.1: Define the term ‘Management Accounting’. Discuss its features and importance.
  4. What Is Bookkeeping?
  5. What Is Process Costing?

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